What is a Crypto Savings Account?
A crypto savings account is just like any other savings account that earns interest, however, it's based on crypto assets. Like a traditional savings account, a crypto savings account accrues compounded interest over a given period of time.
The most important things to look out for when choosing a crypto savings account is the interest rate, the frequency it compounds, withdrawal fees, the security of the platform and the wallet in which your funds are stored and whether there is a minimum term it needs to be invested.
Should you have a crypto savings account?
Anyone that holds, or is thinking of holding crypto assets should at-least consider a crypto savings account. It can be a simple, secure way to earn passive income on assets you have, or plan to have. Everybody's individual circumstances differ and if it suits you and your needs, it's worth considering the many savings accounts available today.
Are my crypto assets secure in a savings account?
Each platform varies quite a lot in regards to how they secure digital assets. It's very important to understand how each platform differs as it can be risky to store your assets with a platform that doesn't offer sufficient digital asset security.
Lending platforms that offer third party custody solutions such as Gemini Custody or BitGo are very good options. They have insurance on the assets they custody and institutional grade infrastructure to store them in a secure way.
Good quality custody solutions offer cold storage which provide storage that is never connected to the Internet.
You should always look for a platform that offers regulated, insured, cold storage custody to ensure your crypto assets are as secure as possible. So far, Nexo offer that.
Is there a minimum time I need to invest?
Each provider offers different terms in regards to how long you need to invest. Some offer flexible terms which means you can withdraw your funds at any time. Some offer 1 month, 3 month and even 12 month options. Generally speaking, the longer you leave your assets in a fixed term contract the higher your interest rates.
One thing to be aware of is that some providers will allow you to withdraw your funds on a flexible basis, however, they could have onerous withdraw fees, or even refuse to pay the interest you have accrued up to that point. It's important to read their terms and conditions to make sure you clearly understand. Or better still, you can ask us directly in the chat on the bottom right.
What currencies do crypto savings accounts support
You can find options in almost all currencies. The most popular are Bitcoin, Ethereum and stablecoins like USDC, DAI, TUSD, Tether and GUSD. Other currencies like Litecoin, XRP and others are slowly being supported as well. Generally, if there's a market to borrow in a certain currency, there's a market to lend.
Is there a maximum amount that you can invest in a crypto savings account?
Usually, yes. Each provider differs in this regard, however, most have a cap of around 1 million USD. If you need a larger capacity than this, they will usually provide, however, you may need to provide additional identification and a lower interest rate.
How long does it take to open a crypto savings account?
This usually depends on the amount you're investing and the country which you reside. If it's less than 10 BTC and you're from the UK, US, Australia, Singapore, or other low-risk country, you can be approved immediately. If you're looking to invest a larger amount and you're based somewhere that is considered higher risk, it could take longer and they may require more identification.
How is the interest paid to me?
Depending on the provider, it's usually paid into the wallet of your savings account. You're usually paid in the same currency as the currency you’re earning interest on. For example, if you have one Bitcoin in a savings account, you’ll receive interest on that Bitcoin, which will be paid in Bitcoin in your savings account. The frequency of the interest payment will vary per provider, however, it’s usually monthly.