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Crypto savings accounts are still a relatively new phenomenon, as cryptocurrency itself is fairly new. As you learn about crypto savings accounts, you will realize why they are growing in popularity and better understand how they let you earn interest on Bitcoin.

What Is a Crypto Savings Account?

A crypto savings account is what you likely assume it is. You can use it to store your cryptocurrency savings and, in return, you earn interest.

While your cryptos are in the account, the custodian or platform offering the account may use it to make a profit. They then give you a portion of that profit in the form of interest. This is very similar to a fiat savings account, although many of the processes are different.

How You Earn Interest on Bitcoin With a Savings Account

With a crypto savings account, you don’t have to put in any effort to earn interest on your Bitcoin. You simply earn interest by having it sit there.

The platform that holds the cryptos will use various strategies to generate a profit and pass it on to you. Some methods are riskier than others, so it is always best to carefully research the platform you choose to use. Common methods include arbitrage, lending and trading.

Further information: Earn interest on Bitcoin

Many Crypto Savings Accounts Have Lockup Periods

Before you start saving your Bitcoin and earning interest with a crypto savings account, make sure that you understand your chosen account’s lockup period. Most platforms offering these accounts require you to lock your cryptos up for a certain amount of time to take advantage of their interest rates. In many cases, there is no option not to lock up your cryptos. If there is, you will usually earn slightly less cryptos.

Additionally, many platforms do not let you choose how long to lock up your cryptos. They will simply have a requirement. You can either accept it and use their services or look somewhere else.

Some of the best companies offer no lockup or the ability to choose how long of a lockup period you want. In the latter case, you can expect to get a better interest rate if you choose an extended lockup period.

What to Look for in a Crypto Savings Account

Some of the things you should look into when choosing a crypto savings account are fairly obvious, while others may require extra thought:

  • Lockup Period: Always confirm that you are willing to lock up your crypto for the given period required. It’s better if you can choose a lockup period that matches your needs.
  • Interest Rate: A higher interest rate is always better, as you will earn more.
  • Fine Print on Interest Rate: When you look at the interest rates, make sure to read the details. For example, some companies will have their own token and only give you the advertised interest rate if you hold some of those tokens or receive interest in it. This can be very misleading as that leaves you with less crypto to invest as it will be tied up in their token.
  • Compounding Interest: Compounding interest refers to how frequently your interest gains so far are added to your balance. This may be once a year, month, week or day. Your profits will increase most quickly with daily-compounding interest.
  • Reputation: Cryptocurrency is not regulated like fiat. As such, make sure that you choose a reputable company.

Haru Earn Plus Offers Crypto Savings Accounts

An excellent option for your crypto savings account is Haru Earn Plus. With this account, you get to choose your lockup period, anywhere from 15 to 365 days. The longer your lockup period, the higher interest you will earn. (If you want no lockup period, consider Haru Earn). You get a competitive interest rate and daily-compounding interest to help your cryptos grow quickly.

Learn more about Haru

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