What are bitcoin savings accounts? Bitcoin savings accounts allow you to earn interest on bitcoin and other crypto assets, typically at a much higher rate than traditional savings accounts.
In today’s banking market, you’re lucky if you can find a traditional savings account that pays out more than a few percent. Most banks currently have interest rates lower than 1%, which is far less than the rate of inflation — meaning saving money is actually losing money.
That’s because inflation reduces the value of your savings, as prices go up. For example, if you have $100 in a savings account that pays a 1% annual interest rate, you’ll have $101 in your account after a year. However, if the inflation rate is 5%, you’d need $105 in your account to have the same buying power.
Fortunately, there’s an option that has seen significant growth over the past several years: bitcoin savings accounts. Our editors have rated and reviewed the best options below.
Best Bitcoin Savings Accounts
Rather than holding bitcoin in cold storage, you can put it to work for you, earning significant interest by depositing your bitcoin into these platforms.
We at Bitcoin Market Journal have done the legwork for you, rating the best bitcoin savings accounts on trust rating, longevity, and number of supported assets.
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While Nexo does have lock-up times, they’re typically less than a day. Plus, the platform guarantees its assets. This is a very appealing feature when it comes to using Nexo, as it also offers high-interest rates on its bitcoin and altcoin currencies. (BMJ Score: 4.5)
Celsius Network offers some of the best bitcoin savings account rates on the market. Users have the option to select from a range of altcoins in addition to bitcoin. Plus, Celsius pays out on a weekly basis and gives users the option to earn more interest if they choose to use the platform’s native token. (BMJ Score: 4.5)
BlockFi is a great bitcoin savings account if you’re looking for an option with no minimums. WIth high-yield accounts, this is a great way to get your foot in the door of investing in the world of bitcoin and altcoins. Even if you only have a few bitcoin available, BlockFi is a solid option. (BMJ Score: 4.0)
Gemini allows you to open a bitcoin savings account with them for as little as $5. Interest on your savings compounds daily, and you can redeem your assets at any time. They also offer an offline, air-gapped cold-storage system to prevent malware and theft from hackers. (BMJ Score: 4.0)
Those using CoinLoan will enjoy its high yields on their investments. These yields apply to bitcoin, traditional altcoins, and stablecoins. Users can withdraw their funds at any time, but why would you when CoinLoan has rates as high as 10.3%. (BMJ Score: 3.5)
If you decide to invest through YouHodler, you have the option to withdraw your money whenever you want. Plus, the platform offers plenty of protection for those who choose to invest in their high-yield options. However, the minimum investment for the site is $100 USD. (BMJ Score: 3.5)
Coinbase is most well-known for its exchange platform, but its savings account is worth checking out. If you open a new account with them, you get a $10 bonus. However, Coinbase charges a range of transaction and withdrawal fees depending on the method, quality, and location. (BMJ Score: 3.5)
Hodlnaut offers no lock-ups or withdrawal limits, and it comes with an impressive APR of 12.73%. You can deposit and withdraw money from your savings account at any time, and their app offers a variety of free tools, including interest calculators and loan calculators. (BMJ Score: 3.5)
Ledn allows you to earn up to 9.5% annually on Bitcoin and USD Coin. Ledn also offers bitcoin-backed loans with 12-month loan terms and a 12% simple interest rate. (BMJ Score: 3.5)
Even though crypto.com has some of the best rates on the market, you’ll have to meet certain criteria to get them. If you don’t have a lot to invest, you might find that you have better success with other platforms. Yields for cypto.com use daily interest, so if you want higher yields, you’ll want to stay invested for at least a quarter. (BMJ Score: 3.0)
Our Top Picks: Nexo and Celsius are our top choices for best bitcoin savings account, due to their relatively long track records, large number of users, and high customer satisfaction.
Whether you want to invest for a few weeks or a few years, there’s no shortage of choices. Just pick a platform, invest your bitcoin, sit back, and watch it grow.
Tips for Bitcoin Savings Accounts
While the idea of earning high interest rates on your bitcoin is enticing, there are some things you need to know about bitcoin savings accounts:
Watch Out for “Too Good to Be True” Rates
It’s common to find bitcoin savings accounts that advertise 10% interest or more. However, fly-by-night operations are common; avoid the lure of high interest rates until the company has been in business for several years. Even then, look for online user reviews and invest carefully.
Watch Out for Fees
Many crypto savings accounts come with hidden fees. For example, some companies will charge you a fee to withdraw crypto from your account. Some institutions also charge setup fees and monthly maintenance fees.
Watch Out for Lock-Up Periods
A lock-up period refers to a window of time in which you’re not allowed to redeem or sell your cryptocurrency. Lock-up periods range greatly for bitcoin savings accounts. Some accounts offer no lock-up periods, and others enforce multi-day lock-up periods. Read the fine print.
Watch Out for Crypto Regulations
Government attitudes toward crypto are evolving, and depending on the regulation in your country, you could stand to lose a large portion of your crypto investment. Most reputable companies do their best to stay on top of the fast-changing laws, but invest carefully.
For example, in September of 2021, China completely banned crypto mining and trading. While we probably won’t see total bans in the US or Europe, it’s still important to keep your eye out for new regulations and how they might affect your investments.
While all bitcoin savings accounts operate online, not every account operates everywhere. For example, if you’re in a country with strict bitcoin restrictions, such as China, you may have trouble logging into your savings account. This can be tough if you’re trying to withdraw money or make a transaction.
Additionally, some crypto firms don’t even work in all US states. For example, Crypto.com and BlockFi aren’t available to New Yorkers.
Bitcoin May Not Be for Everyone
Because bitcoin is highly volatile, opening a bitcoin savings account isn’t for everyone. Your cryptocurrency is exposed to the same risks it would if it were sitting in your wallet, even with the high APRs.
Additionally, crypto investing comes with a learning curve, as you’ll need to get familiar with all of the technical processes that come with buying, investing, and saving. (Join our daily newsletter to help you make sense of it all.)
Bank Savings vs. Bitcoin Savings Accounts
A bitcoin savings account is different from a traditional banking account. Here are some of the main things to keep in mind:
Bitcoin is Volatile
As mentioned, the price of bitcoin is extremely volatile, which means its value can plummet overnight. It’s not uncommon to see the value of bitcoin drop by thousands of dollars in a matter of days. Our philosophy is to buy and hold for the long term, not watching the day-to-day swings.
No Deposit Insurance
Bitcoin savings accounts aren’t insured by the Federal Deposit Insurance Corporation (FDIC). This means that if a fund or a company goes bankrupt, there’s no guarantee you’ll get your money back. Don’t put more into bitcoin savings accounts than you’re willing to lose.
Hacks and Theft
There’s also the risk that the company’s custodial provider (i.e., where the assets are stored) gets hacked. If you own a crypto savings account, there’s the possibility that theft could occur if the platform experiences a hack. With established companies, these are rare, but they do happen.
As you can see, there’s a lot to think about before opening a bitcoin savings account. While the high APRs are a major selling point, consider the potential risks and limitations before opening an account.
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