What is a Bitcoin Saving Account with Interest?

How to earn Bitcoin on a crypto interest account

Bitcoin Saving Account with Interest

  • There are possibilities to earn a yield with a Bitcoin savings account paying interest.
  • A Bitcoin interest account is different from onchain staking rewards.
  • There are certain risks associated with saving interest accounts an investor should be aware of before depositing Bitcoin or any other cryptocurrency.

No Financial Advice, Information only. Do your own research

What is a Bitcoin Saving account with interest?

A Bitcoin savings interest account is a financial service offered by some cryptocurrency platforms and banks, allowing users to earn interest on their Bitcoin holdings. Here’s how it typically works:

  1. Deposit Bitcoin: You deposit your Bitcoin into a savings account provided by the service.
  2. Earn Interest: Your deposited Bitcoin earns interest over time. The interest rate can vary significantly depending on the provider, market conditions and compounding terms.
  3. Interest Payment: Interest may be paid out at regular intervals (like monthly or yearly) and can be in Bitcoin or another currency.
  4. Access and Liquidity: Some accounts offer easy access to your funds, while others might require a lock-in period during which you can’t withdraw your Bitcoin.

Key Features and Considerations:

  • Interest Rates: These can be higher than traditional savings accounts due to the higher risk and volatility associated with cryptocurrencies.
  • Risk Factors: Unlike traditional bank accounts, Bitcoin savings accounts are usually not insured. The risk of hacking, regulatory changes, or the platform’s solvency can affect your investment.
  • Regulatory Environment: The regulatory status of such accounts can vary by country, affecting their legality and the level of protection offered to consumers.
  • Compound Interest: Some accounts offer compound interest, where you earn interest on your initial deposit as well as on the interest that accumulates over time.

Advantages and Disadvantages:


  • Potential for higher returns compared to traditional savings accounts.
  • Offers a way to generate income from Bitcoin holdings without selling them.


  • Higher risk due to cryptocurrency volatility and security concerns.
  • Lack of insurance and regulatory protections common in traditional banking.

Before opening a Bitcoin savings interest account, it’s crucial to thoroughly research the platform, understand the terms and conditions, and consider the risks involved in such investments.

Bitcoin Interest Account VS Staking Rewards

Bitcoin Ethereum Litecoin and Ripple Symbols

The blockchain has no built-in yield for Bitcoin, Litecoin, or Ripple like it is for Ethereum and other proof-of-stake consensus blockchains.

When comparing Bitcoin interest accounts and cryptocurrency staking rewards, it’s essential to understand the fundamental differences between the two and their respective risks and benefits.

Bitcoin Interest Accounts:

  • Mechanism: Users deposit Bitcoin into a 3rd party service savings account. The platform then uses these deposits for various purposes, like lending to other users, and shares a portion of the earnings as interest with the depositors.
  • Interest Rates: You can earn up to 7% APY with the best Bitcoin APY interest accounts from Nexo and YouHodler.
  • Risk Level: Generally higher risk due to the volatility of Bitcoin’s value and potential security risks associated with the platform.
  • Accessibility: Usually, Bitcoin can be deposited or withdrawn at any time, though some accounts might have lock-up periods.
  • Regulation and Insurance: Often less regulated, and deposits are usually not insured.

Staking Rewards:

  • Mechanism: Staking involves holding funds in a cryptocurrency wallet to support the operations of a blockchain network. It’s prominently used in Proof of Stake (PoS) and similar consensus mechanisms. Users “lock” their coins to become validators in the network and receive rewards for this service.
  • Rewards: Staking rewards are given for validating transactions and maintaining the blockchain. These rewards can be a fixed rate or vary based on how many coins are staked and the total number of staking participants. Ethereum staking rewards are the most common.
  • Risk Level: Staking risks include the potential for the value of the staked coin to decrease. Additionally, some networks have a slashing mechanism where some staked coins can be lost due to validator misbehavior or network issues.
  • Lock-Up Period: Many staking mechanisms require the coins to be locked up for a certain period, during which they cannot be traded or used.
  • Currency Specificity: Staking is specific to certain cryptocurrencies that use Proof of Stake or similar mechanisms. Bitcoin, which uses Proof of Work, cannot be staked traditionally.


  1. Returns: Interest rates on Bitcoin saving accounts can be more predictable than staking rewards, which may fluctuate based on network conditions.
  2. Risk Profile: Both have unique risk profiles. Bitcoin interest accounts carry the risk of platform security and regulatory changes while staking risks are more related to the underlying blockchain’s performance and staking penalties.
  3. Liquidity: Bitcoin savings accounts may offer more liquidity depending on the terms. Staked assets typically have a lock-up period.
  4. Passive Income: Both methods provide passive income but through different mechanisms.
  5. Environmental Impact: Staking is generally considered more environmentally friendly than Bitcoin’s Proof of Work, though this is not a direct factor in earnings or risk.

Choosing between a Bitcoin interest account and staking rewards depends on individual risk tolerance, investment strategy, and preference.

How much can I earn with a Bitcoin interest account?

There are many different payout models for Bitcoin interest accounts. For example, many companies offer a yield between 3-8% APY for your deposited Bitcoin.

However, remember to compare before you deposit.

To achieve the highest APY, you usually need to reach the highest loyalty level and option to receive the payout in the native token of the platform.

In addition, some platforms with tier levels (BlockFi, YouHodler, Binance ,etc.) have a maximum quota per interest level.

Bitcoin Saving interest account and Risks

As for any investment, there are risks associated with a Bitcoin interest account.

When you deposit your Bitcoin into an interest account, you give up the private keys to a 3rd party, and this transaction makes your Bitcoin exposed to that 3rd party and all risks connected to that 3rd party company.

Some of the risks are

  • The company can be a fraud or a Ponzi scheme
  • The company can run bad business and go bankrupt
  • The company can get hacked 
  • The company might not be able to adopt to the incoming new crypto regulations

Is Bitcoin Interest Account Risk Worth it?

There is no easy answer to such a question because there are too many personal aspects to consider to be able to answer it.

Still, you should always research and be aware of the risks. Several Bitcoin lending platforms have gone bankrupt (CRED, BTCjam, Celsius).

Read more about how to minimize risk and diversidy your investments in our article about crypto risk management.