13 Best Places To Earn Interest on Crypto

Crypto Savings Accounts Vs. Regular Savings Accounts

There are some key differences between crypto-based savings accounts and regular savings accounts with a traditional bank. Perhaps the biggest difference is the plethora of risks you take on with crypto savings accounts that don’t exist with standard savings accounts. These two types of interest accounts do not have the same risk profiles, so it’s important to understand that.

FDIC Insurance

The most important difference between these two types of interest accounts is the fact that assets held by traditional banks are covered by federal insurance through the Federal Deposit Insurance Corporation.

Being covered by FDIC insurance means the federal government is guaranteeing your deposit. FDIC insurance allows consumers to place their money in the bank without worrying that they will lose it. It protects customers in case the bank fails, and it covers each customer up to $250,000 per ownership category.

Many companies that offer crypto-based savings accounts do not offer any insurance and those that do offer a different kind of insurance than what the federal government offers to customers of standard banks. Generally, insurance offered on crypto savings accounts protects against situations like cyber theft, but it does not protect against the failure of the company offering the account or against any failures relating to the lending activities it does to support the interest it pays out.

Withdrawal Restrictions

Some crypto savings accounts may have withdrawal limits. On the other hand, standard savings accounts don’t limit how much you can take out at a time, but there was a federal regulation limiting the number of withdrawals to six in a month. However, that regulation was lifted in 2020 amid the pandemic.

Compound Interest

Most standard savings accounts pay compound, rather than simple interest. This means that with the typical bank, interest is paid on the total balance each month, including the interest that was paid last month. However, most crypto savings accounts pay only simple interest, which means it is paid only on the original balance. There are some crypto interest accounts that pay compound interest though, so you’ll have to read the fine print.


It’s important to understand the difference between yields and interest rates. The interest rate is the percentage paid on a deposit, while the investment yield is the amount of earnings from the deposit over a set period.

Key Access

Instead of a bank account number, cryptocurrency investment is tied to public and private keys. Some crypto savings accounts may require you to give them access to your private keys, which are the keys tied to the cryptocurrency you own. The public key is used to encrypt the digital currency, while the private key is used to decrypt it. If you don’t own the private keys for your cryptocurrency, it means you don’t technically own it. Instead, it’s owned by the digital wallet or company that operates the savings account. On the other hand, the money in a standard savings account is always yours outright, which is made clear by the fact that you can withdraw as much as you want whenever you want without limits.

Crypto Savings Accounts Vs. Crypto Wallets

It’s also important to understand the differences between crypto wallets and crypto savings accounts.


The biggest difference between the two is that a crypto saving account pays interest, while a wallet does not. As the name suggests, a crypto wallet merely holds your cryptocurrency, while a savings account makes small payments based on a given interest rate.


Both crypto wallets and savings accounts must have protection against hackers. In many cases, these two types of accounts share similar standards for security.

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