Do you wish to increase your investment returns as you explore the world of cryptocurrency? A crypto savings account could be a sure way to do that.
What is A Cryptocurrency Savings Account?
As the name implies, a cryptocurrency savings account is a type of account that allows you to deposit your cryptocurrencies and earn returns over time. For instance, if you own a BlockFi cryptocurrency savings account, your cryptocurrency can fetch you almost 8.6% APV, which accumulates every day and is disbursed monthly. Unlike traditional savings accounts, crypto savings accounts offer high-interest rates (about 4-8% or more). Nonetheless, it is important to note that your rate of return will be dependent on the type of cryptocurrency you have, be it Bitcoin, Ethereum, Litecoin, or some other type of crypto.
How Do Cryptocurrency Savings Accounts Earn Money?
You may be wondering why the return rates on crypto savings accounts are high and how these accounts earn money. Well, it’s not rocket science. Just like every other financial institution, companies that offer cryptocurrency savings services lend the cryptocurrency in your savings account to investors and trusted borrowers who use them for a stipulated period. In return, the borrower pays interest on the crypto asset that was lent to them.
Is It Advisable To Save Money In A Crypto Savings Account?
The primary aim of cryptocurrency savings accounts is to help investors earn money on their assets while they hold them. Theoretically, that sounds like a great idea, but practically it’s a bit risky. This is because crypto-based savings accounts are highly exposed to the Volatile cryptocurrency investment market.
So while the idea of getting 4-10% returns on your crypto asset may seem very exciting, you must understand that these returns are not guaranteed. Crypto savings accounts do not offer the same safety that traditional savings accounts offer. So before you invest, try to learn about the pros and cons of cryptocurrency savings accounts and discover where you can get the best returns. Some top crypto savings accounts include Linus, Outlet Finance, Coinbase, Gemini, Crypto.com, Hodinaut, YouHodler, Celsius Network, Nexo, and Ledn.
