Last Updated on October 4, 2022 by
With digital currency overtaking the traditional currency, you don’t just want to hold your cryptocurrency; you also need a reliable saving scheme and platform to help you realize your cryptocurrency saving goals.
You need a reliable platform that can enhance your cryptocurrency savings and off you your desired returns.
In this article, we will be exposing you to some savings plans and how you can benefit greatly from them. Seat tight!
What Is Crypto Savings Account?
A crypto savings account is a financial arrangement that allows crypto investors to make returns while holding their cryptocurrency assets passively. In plain terms, a crypto savings account let you to deposit and store your assets while you receive yields on your savings.
Cryptocurrency saving accounts are acutely similar to traditional saving accounts as your assets are lent to trusted institutions and corporate borrowers to trade. However, you are liable to standard rates of return, depending on the assets you buy. A crypto savings account offers you the possibility of earning returns in a different cryptocurrency asset.
How do crypto saving accounts work?
The question of how Crypto Savings work is frequently asked as it is often mixed up with how traditional banking works. Firstly, it is important to emphasize that crypto banks are not completely different from traditional banks.
Just like traditional banks, you will be required to open an account, deposit funds, and start receiving a percentage of interest, called APY (Annual Percentage Yields). However, interests vary in terms of deposit funded, type of cryptocurrency, and when to receive APY. A case in point is CoinRabbit that offers 8.25% APY on a monthly basis.
A significant difference from traditional banks is that, with crypto banks, you can earn with a different cryptocurrency asset. However, crypto savings accounts are not without their inherent risks – they are generally susceptible to volatility, which might reduce the value of your asset, making you run at a loss. Among other risks is the lack of access to withdrawals at comfortable volition and also crucial security concerns.
Crypto Savings Accounts are attached to what is known as Centralized finance or CeFi. In other words, centralized finance are central authorities that play the role of a third party or mediator between an individual and the access to cryptocurrency. An edge CeFi gives is that it easily generates income through a percentage acquired through borrowing or lending. But, what must be particularly emphasized is that they come not without their risks.
CeFi platform’s risks
Firstly, CeFis are prone to a lot of security threats. This is because users do not possess overwhelming control of the exchanges that ensue. Users passively relinquish their personal information, including passwords and crypto addresses, to ensure that they are well secured. However, the reverse could be the case as crypto exchanges could be subjected to extreme and monumental security breaches.
In addition to their vulnerability to hacking and seizures, they are also not backed by governmental institutions or insurance companies that could provide remedies in the event of a breach or security concerns. In contrast to traditional banks that are under the exclusive regulations of FDIC and the likes, CeFi does not enjoy such privileges, making them extremely insecure against unforeseen circumstances.
Why is the interest higher than that of traditional banks?
Even in the light of their vulnerabilities, crypto banking still ranks as one of the safest ways to invest in cryptocurrency. Besides the amazing possibilities of securing periodic interests while simultaneously keeping your assets, Crypto savings accounts, with their astute bank models, have proven to be highly sustainable in the case of downward volatility with their attractive interests that hugely dwarfs what traditional banks ordinarily offer.
With a CoinRabbit’s Crypto Saving Account, you can earn an 8.25% APY, a figure that is at disparate odds with traditional offerings. Crypto Banks make significant returns than traditional banks, largely owing to the bank model they have adopted. Out of precautionary measures, Crypto banks lend out less than their deposits while making lenders pay a collateral.
So if you are holding a stablecoin like USDT or USDC, our crypto savings account would be of great help to you to increase the amount of your assets. This would give your holdings a skyrocketing boost and increase your earning power.
How to open a crypto saving account on CoinRabbit?
- Navigate to CoinRabbit Earn Page
- On the right side, there’s a Calculator to help you calculate your crypto yield; enter the amount of Stablecoin you like to deposit and choose your asset
- You’ll be shown your Monthly reward; click “Start Earning”
- On the next page, you will “Verify” your phone number, confirm you have read the terms and conditions, and press “Confirm”
- You’ll then deposit your stablecoin and begin to earn interest.
