- Today, we are talking about
crypto-based savings accounts.
So we are just gonna go ahead
and jump right into the top companies
that are offering
crypto-based savings accounts.
But you'll wanna stick around
because I'm also going
to cover the differences
between crypto-based savings accounts
and regular savings accounts
and how these differ
between a crypto wallet.
(light music)
Hey guys, welcome back
to The College Investor,
Investing and Personal
Finance for Millennials.
So we scoured the internet
for the top crypto-based savings accounts,
and here's what we found.
So Crypto.com, Outlet Finance,
YouHodler, CoinLoan, BlockFi.
All of these different companies offer
crypto-based savings accounts
with really high interest.
So you're going to see for Stable Coins,
for Crypto.com, that's between 6 and 12%.
Bitcoin is a little bit lower at 4.5%.
And then you can see beneath BlockFi,
we have Linus, Celsius
Network, Nexo, and Coinbase.
These are going to be the top
crypto-based savings
accounts that we found
that are offering high yields.
Okay, so I also wanted to show you
what these crypto-based savings accounts
and their websites look like.
So when you go on to Crypto.com,
you can see up to 8% on your crypto
and up to 12% for stablecoins,
so you're going to see a
couple of different variables
on how much interest you can earn
based upon how long you're
keeping your Bitcoin stablecoin
inside of these accounts.
So, I mean...
Looking at this, you can
see just the different types
of tokens and crypto earn that they accept
and that you guys can use.
Same thing with Outlet Finance,
although Outlet Finance,
what's interesting about this
is it really does look like
a traditional savings account website,
a modern version of it.
It says you can earn 6%
on every dollar you save.
And it's really easy to look at.
I mean, the way that they have set up
their dashboard screenshot here,
this looks very much like a
traditional savings account.
And then let's go over to YouHodler.
So this one, it says you can earn crypto
up to 12% in a year,
and then you can start earning interest
using different types of cryptocurrency.
So they have stablecoins,
they have USDC, the TrueUSD,
all of these different types,
and they offer different rates
for the different types of currency
that you are going to be operating with.
So those are the top
crypto-based savings accounts
that we found,
but you might be wondering
what's the difference
between a crypto-based savings account
and a traditional savings account.
One major difference is
that those crypto-based savings accounts
aren't FDIC insured.
So you can lose money in
these savings accounts.
In fact, I almost like to think of this
as more of an investing
account than a savings account.
Another major difference is
you lose access to your keys.
In a crypto savings account,
your crypto keys are
lent out to other users
who can then use the crypto.
Another major difference is
the crypto savings accounts
offer really huge interest yields.
I mean, we saw it, it
was between 4.5% and 12%,
and that's way more
than what you could earn
on a traditional savings account.
In fact, with traditional
savings accounts,
you're looking at less than 1%,
high yield savings accounts
are hovering at 1% or more.
So the fact that you can earn up to 12%
on these accounts is huge.
Now, a reason why these
interest rates are so high
is that the banks have
to attract investors
to come use their savings accounts
and invest their cryptocurrency.
So they are going to
attract those investors
by offering higher interest rates.
Another major difference
is you may face withdrawal restrictions.
With a regular savings account,
you can withdraw up to six times
within a month from that account.
With the crypto-based savings account,
there's actually no
standardized guidelines,
so it's kind of all up in the air
in terms of how often you can
withdraw within the month.
Another major difference is
the interest may not compound.
So with a traditional savings account,
you're earning interest,
and then the next month you're earning
interest upon interest, that
compound interest method.
With a crypto-based savings account,
you're only earning interest
on that principle balance
that you deposited into the account.
So you're not able to get
that compound interest,
which, I mean, everybody
loves compound interest,
that is the way to wealth.
So that's just not a feature
in crypto-based savings accounts.
Next, you might be wondering
how these crypto savings accounts compare
to your crypto wallet.
Well, a crypto savings
accounts yields interest,
as we talked about before,
crypto wallets, you're just
kind of parking your money
in your wallet much like
you would traditionally,
and you're not earning any
interest on that money.
The next difference is
you don't own your keys
in a savings account.
We talked about that with the difference
between traditional savings accounts,
banks are going to lend out those keys
so that other people can use the crypto,
that's how a bank traditionally operates.
And with a crypto wallet,
you're keeping your keys.
That is your domain.
When you're using a
crypto savings account,
it's just the opposite.
And another major difference
with the crypto-based savings
accounts and the crypto wallet
is that the savings account
security is just a lot better.
So crypto wallets, kind of
a weak form of security.
I mean, what happens
if you lose your phone,
you have the potential
to lose all your money.
Yes, there's things like
two-factor authentication,
but even still, there's definitely a risk
of you losing that money
inside of a digital wallet.
And in contrast, crypto
banks have set up a lot
of redundancies and cyber security
to help keep your crypto safe.
So the savings accounts
is the better way to go.
So all of these savings accounts,
savings accounts really
have one thing in common.
They are really just investing accounts.
They are high-risk, high-reward,
so you could do extremely
well in these accounts
and earn that really high yield,
or you have the potential to lose it all.
Cryptocurrency investing is really
highly volatile right now.
It's still pretty new.
So you wanna make sure that
you are doing your research,
and even though the advertising
on these different company websites say
that there are guarantees
that you'll earn money,
there really is no guarantee.
So do your research first.
For more information on crypto,
saving, investing, and more,
be sure to visit thecollegeinvestor.com.
