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Between Crypto saving account and Crypto wallet which should you chose?

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Avatar for Fexonice1
Written by   801
8 months ago

Recently, I was thinking about how I could spend on my BCH without having to touch the initial balance for possible future value increases. I realize that no matter how high the value of a coin in USD any amount of it you sold for fiat currency is a reduction in the number of the coin. This means, should the coin value go down again you found out that you didn't gain anything much because 1 BCH will always be 1 BCH. Going by these permutations, I decided to research how I can spend on my crypto without depleting the initial balance. The only option that I could find was the use of a Crypto saving wallet, in which I can save my coins and earn interest on it which I may have to spend without selling any of my initial balance. I know this is not new to some people but some of us have not heard about it or don't know how it works.

Although I have been aware of crypto-saving wallets or accounts, I haven't done proper research about it to know its features and how to take advantage of it. The knowledge I gained from my research formed the basis of this article.

What are crypto savings wallets

Crypto savings wallets or accounts are quite different from normal hardware wallets in many ways. They are wallets or accounts operated by cryptocurrency lending companies which we can also refer to as crypto banks. They allowed you to earn interest on your crypto saved in them. They have quite some advantages over the normal hardware wallets. The biggest difference in using crypto savings wallets that I think you should be aware of are as follows.

You earn interest on your savings

When you use a crypto savings wallet you earn interest on your savings at a percentage provided by the operating company. This interest helps your asset to increase in value, not only in USD but also in number. In a hardware wallet, the number of your coins doesn't increase over time. But with crypto savings wallets, the number of coins you own will increase over time as long as the crypto bank remains in operation. You earn interest on your chosen asset, and your interest gain is added to your coins according to the plan of your savings.

Additionally, most of the crypto savings wallets work on compound interest. This means your interest has a chance of growing exponentially over time. You are not required to do anything manually to earn interest on your asset apart from transferring your coins to the savings wallets.

Transfer of key Ownership

As it is often said in the crypto space, "not your key, not your money", as in the case of use in exchange platforms, the same applied to crypto savings accounts. Most of us don't really understand what those words mean. When you send coins to a crypto saving account you give up access to your keys. That allows the exchange to lending your crypto to other individuals. The interest you earn for your savings comes from lending the coins. This is actually an investment of your coins. A choice that doesn't seem to look right with some people.

The danger here is that should anything happens to the operating company and they run out of business, your valuable assets are gone with them since you don't have the key to your crypto.

Crypto savings wallets double security could be an advantage

Crypto savings wallet operators take security to the next level with built-in redundancies to secure crypto keys. Most also have insurance protection for their investors. I cannot say exactly how these security features benefit individual users. The only thing I understand is that should there be a case where the borrower of your savings with them fails to repay, your assets could still be recovered.

This is one of the enticing features of using crypto savings wallets over the normal hardware wallets since Losing your phone could mean losing all your money. Even if you have multi-factor authentication on your wallet, you could lose everything if you don't have your wallet keys or seed phrases.

Should You use a crypto Savings wallet or account?

This depends on what you are looking for. If you looking for a way to earn interest on your crypto and to be able to spend without touching your initial coin balance, a crypto-based savings account is the best fit. You can expect to earn interest right from day one of your savings. The interest yield is usually in a percentage provided by the operating company according to your saving plan.

Some of the major crypto saving wallet operators offer a fantastic interest rate as high as 12% on their native token should you decide to receive your interest in other currency different from your coins.

Note, that saving crypto is different from staking crypto. While the former allows you to gain on volatility, the latter fleeced or lock up your asset until the period of staking is completed. This is a little bit outside of the context of this article.

Should you decide to try out a crypto-saving wallet, I would advise you to tread with caution. As they say, "don't put all your eggs in one basket". What I mean is that, don't send all your crypto to a saving wallet. A wallet that you have the key and seed phrases should have more of your asset.

Some examples of crypto saving wallets


Nexo has a flexible saving feature (less than 24 hours), as well as third-party guarantees from its crypto assets. That makes it an attractive option with very high yields up to 12% APY in Nexo token and 4%-8% in other cryptocurrencies. However, it does not explicitly state how much you should invest in achieving the highest return rates.


Ledn is a crypto lending platform that works as a crypto savings account. It has a few different options for earning interest on your cryptocurrency, and you can get up to 12.50% on USDT and 6.10% on BTC and other Crypto.


Gemini is known as a strong crypto investment and trading option for the past few years, and their platform is actually the backbone of several others.

However, Gemini was late for the cryptocurrency saving game. They recently launched Gemini Earn, where you can earn interest on your crypto holdings. You can earn up to 7.4% interest, including 2.05% on BTC, by transferring your crypto to Gemini Earn.


Coinbase is best known as a digital wallet. But it also acts as digital crypto savings account for other customers. You can receive 1.25% APY on US Dollar Coins (USDC).

Unlike the other companies on this list, Coinbase does not borrow out your coins. Instead, this is a way to get a small amount of interest while you wait to make a trade in the platform. Also, if you deposit $100 Fiat currency or more, you will receive a $5 bonus.

My pick

Coinbase has proven to be a safe crypto hub for cryptocurrency investors and traders over the years. The platform is specially designed for trading since there are several trading options on the platform to earn on your crypto. Saving on a coinbase wallet seems more secured based on platform credibility, but the interest rate on your savings is lower than others.

I am quite familiar with Nexo, I still have some savings in there. Fixed-term on your crypto savings yields up to 5% APY while a flexible saving gives 4% APY. The flexible term saving allows you to withdraw your coins at any time, but on a fixed term, you can only be able to withdraw your money at the end of the fixed period.

These two are my best pick. You can always do your research to choose what best suits your interest. And again, learn to tread with caution.

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Avatar for Fexonice1
Written by   801
8 months ago
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Very educative piece. Please do one on staking. I think I'll be going with Nexo, too. Thank you.

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7 hours ago

So far nexo is my fave :)

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8 months ago

I have Coinbase installed , but as far as I remember, I still don't have some savings in there. Maybe I will try, if I earn a reasonable amount this month. Thanks for the informative article. :)

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8 months ago

I only tried Nexo, you can also add Celcius Network. However, I can't trust my assets on those lending platforms because it doesn't have any keys or seed phrases. I'm afraid to lose my assets.

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8 months ago

I haven't heard of this before and I am just reading and understanding it from your end. I think Luno and Roqqu also have crypto saving wallet but I don't understand how it works. This has given me insight about it. Thank you

$ 0.01
8 months ago

Luno or the other name you mentioned are exchanges, you wouldn't earn a high percentage of interest there. These ones I explained here are lending platforms. You borrow them your Crypto and receive interest for it.

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8 months ago

Sir , can one open a savings account on Coinbase without doing account verification?

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8 months ago

No, account verification is very important for your own safety

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8 months ago

Oh! Okay

Thank you sir🙏

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8 months ago