Cryptocurrencies have rattled the financial market in such a way that almost every type of investor wants to invest in the asset despite its overall price volatility. The aim of generating profits in the short-term is the main reason why every type of trader or investor inclines towards cryptocurrencies. However, there is a new investment area that has taken the light due to better return offering capabilities and low risk. This includes a cryptocurrency savings account.
A cryptocurrency saving account is somewhat similar to a normal same account with a bank where an individual owns a small amount of interest on the amount deposited. However, in the case of a cryptocurrency savings account, an investor has to deposit cryptocurrency coins over which he or she receives a substantial amount of profit as compared to a traditional savings account. Though cryptocurrency saving accounts are not backed by a dedicated bank in terms of reliable returns and safe investment, if an individual possesses the necessary knowledge and skills, he or she can easily earn a great number of returns.
There are various types of cryptocurrency savings accounts available like BlockFi, Gemini, Linus, and Celsius that an individual can park their funds in. Comparing and selecting the best among them in terms of overall safety and better returns can prove to be a difficult process for a beginner. Dedicated companies make their services available for selecting the best cryptocurrency saving account. They even help in making the procedure of account opening and investment hassle-free. Bitcompare.net is one such platform that makes the comparison between different cryptocurrency saving accounts easy and even serves as a one-stop solution for investment.
An investor may feel averse to invest and park their valuable funds in a cryptocurrency savings account. Therefore, it becomes very essential to understand the pros and cons of a cryptocurrency saving account before investment. Various aspects make a particular type of cryptocurrency saving account a reliable and safe form of investment. Some of these are as follows:
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High-interest rate
The first and the most crucial aspect which defines a good cryptocurrency saving account is the returns it can deliver to an investor. A cryptocurrency saving account that can offer higher interest rates is considered to be more desirable and accepted widely by investors of every type. Accounts like BlockFi, YouHodler, and Celsius are known for offering substantial returns that can range from 8% to even 12%. This makes investment in such accounts more lucrative as compared to a simple bank saving account.
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No minimum fund requirement
A good cryptocurrency savings account can also be identified easily if there is no underlying clause of minimal fund requirement. A bank savings account offers lower interest rates and even imposes an obligation to park minimum funds every month for continuity of the account itself. A cryptocurrency savings account that does not require a minimum balance must be selected as it offers flexibility to an investor and does not cause an unnecessary burden.
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Zero deposit fees:
Certain cryptocurrency saving accounts also charge a hefty amount to investors for depositing funds. This reduces the overall attractiveness of such accounts. Investors therefore must look for a good and reliable savings account that accepts deposits both in terms of cryptocurrency coins and legal tender of a particular province with no requirement for deposit fees. The process of opening an account must be safe, easy, and completely convenient.
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No lock-in-period
Another key aspect that makes particular cryptocurrency savings account lucrative is no lock-in period of the invested amount. Every investor invests money into a savings account for earning returns on their liquid funds. A normal savings account or any other type of bank account for that matter requires locking of funds for a certain period.
This may range from 1 to 5 years depending upon the type of account and the percentage returns on the same. At the same time, the feature of zero lock-in-period proves as a key aspect of a good and reliable cryptocurrency savings account. Cryptocurrencies are considered to be volatile in terms of price fluctuations. A particular type of savings account that can allow investors to deposit and withdraw the same at any time is considered to be a lucrative and better option for the overall safety of invested amounts.
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No compulsion to opt for cryptocurrency coins as a type of investment
A good cryptocurrency savings account can also be easily identified if it allows an investor to invest money in the form of the legal tender of a particular country like US dollars. The savings account must give requisite flexibility to an investor to buy cryptocurrencies through actual legal tender i.e. money instead of accepting only cryptocurrency coins. Moreover, the returns must also be deposited in terms of the same legal tender as invested making it very easy for the investors to collect interest monthly or quarterly.
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Security and reliability
The most crucial feature of a good cryptocurrency savings account is ensuring the safety of the invested amount. A reliable cryptocurrency savings account is easily identified if it can offer security to an investor in terms of the amount that is used for purchasing cryptocurrency coins or deposited directly.
Some accounts tend to accept actual legal currencies like US dollars for investment but invest the same in non-reliable cryptocurrencies that are known for their price fluctuations and volatile nature. The promise of better returns can be shattered if opted for such an account and can even lead to erosion of the invested outlay.
Conclusion
Good cryptocurrency savings account with all the above-mentioned features may prove to be a fruitful form of investment. The chance of earning substantial returns with zero risks of capital erosion makes a particular account better than the other options available. Other key aspects like compounded interest rates and the availability of a large number of currencies for investment can easily make a particular cryptocurrency saving account attractive for parking funds. Ensuring complete precaution and availability of the above-mentioned points while selecting a particular cryptocurrency savings account is mandatory.