What Is A High Interest Savings Account | Traditional Vs. Cryptocurrency Savings Account
Which Bank Gives a High-Interest Rate on a Savings Account?
How to SkyRocket your earnings with High-Interest Rate Savings Account using Cryptocurrencies
What is a high-interest savings account? Well, the financial products of today – whether you’re a customer, investor, or somewhere in between, are sick and tired of cash savings rates from the big corporate banks. Rates from 0.01%-maybe 0.09%? No thanks! The centralized banks describe a high-interest savings account as getting 1% APY. But usually only if you hold thousands of dollars in your account. It’s crazy! The best “high interest” online savings accounts from your “trusted” banks are only around an infuriating 1% APY. Let’s examine a traditional vs cryptocurrency savings account and how you can get started today.
For the record, inflation for 2020 is roughly 3% while your spending power of every dollar has dropped by an astonishing 4.8% just in 2020.
This means if all you do is leave your money in a “savings account” you’ve essentially lost 7-8% of your money every single year and it’s only growing as the Fed keeps hitting the “print” button.
Where can I get a decent savings rate anymore? If you’re a holder of cryptocurrencies like bitcoin, possibly in a cryptocurrency savings account, where some accounts are paying8.6% APY!
Yes, you read that correctly. 8.6% APY in a crypto savings account!
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If you think that sounds too out there, so did I. However, I’m going on 10 years being in the crypto space and I feel very confident with the information I share with you because I’ve “been there done that.”
You see, the first Bitcoin tip I received was from the world-class Silicon Valley Tech investor and strategist, Michael Robinson. Michael is responsible for my success in getting into Cryptocurrency way back in 2010. He’s made me a lot of money through his recommendation over the years. So, when he came out with his list of recommended Crypto banks, I trusted yet verified, and well…here I am.
Finding any Crypto Bank You Can Trust is Difficult
I trusted his list of High-Interest Rate Banks (for lack of a better word) and became super excited. I’ve earned over $4,000 in interest payments in 6 months with my investments so yeah…I’ve been extremely excited. For many people, this is a life-changing income and opportunity.
So, six months ago I researched and opened cryptocurrency savings account on Blockfi.com, where I’ll earn 8.6% in crypto interest paid monthly to my account. I will share the benefits as well as the risks.
Yes, it is. The market is only about 11 years old. However, I could go on for much longer than this report to describe how Michal Robinson, Myself, Microsoft, The Winklevoss twins, Mike Novatz, and several other well-known and respected people and companies see this is as the natural evolution of currency.
Bitcoin increased by 317% in 2020
Bitcoin, Ethereum, and other cryptocurrencies are very volatile. However, over the last 5 years, you could have earned almost 7,000% on your BTC Investment. But, this kind of volatility can make them very hard to hold long-term.
For example, this year alone Bitcoin has traded down to $5,750 and closed out 2020 at around $29,000! Roughly a 317% increase. It kind of kicks the major bank’s standard savings butt.
With BlockFi, you can earn interest in Bitcoin, Ethereum, and others.
The Birth of the Stablecoin
Have you heard? There is a stable, dollar-for-dollar way to earn your money and have it payout compound interest every single month!
These are called Stable coins. There are various “stable” currencies that trade on a 1-to-1 basis with the US dollar. These are the currencies we want to hold and earn interest on.
We call this your crypto savings account. Each person in your family could have one if you so desire.
Even though these currencies are pegged to the US dollar (i.e. 1 stable coin = $1 USD), this doesn’t mean that you have no risk. Market forces can make a stable coin worth less than a dollar, in a similar way to how money market funds have occasionally “broken the buck.”
All of this is to say: just because this account has the words “savings account” next to it, doesn’t mean it’s the same as an FDIC, U.S. dollar savings account at a regulated bank.
You need to ultimately decide if the risk is worth potential 8% returns on a very liquid asset. Here’s how I’m thinking about this new class of accounts.
How do Crypto Savings Accounts Work?
Earn 8.6% or more with your Crypto Savings Account Total Passive Income
1. Decide How Much Money to Invest
To be very upfront, my risk tolerance is pretty high but at the same time, I do my research. It’s important to steer clear of “too good to be true” promises. This is why I firmly believe I will try it myself before I ever recommend something.
I opened my customer account to figure out what I needed to know to decide how much money I should add. I looked into the founders, the location, and the federal oversight.
Some background: I first invested in Bitcoin (BTC) in 2010, so I was relatively early and had built up a sizable portfolio of crypto assets over the last six years. I chose to make an initial deposit of $10,000. At the time, BlockFi did not have the ability to do ACH transfer so I bought USDC (Stablecoin) in my Coinbase account then transferred it over. Coinbase is one of the most trusted crypto exchanges in the United States but they do not offer these high yield rates.
Great news, you can deposit US dollars directly into BlockFi and immediately purchase a stable coin now without having to do this game the system. But it will take roughly 7 business days for the transfer to complete so be patient. sitting in my Coinbase account.
After making the initial deposit, and having a few more weeks to learn, I’ve added a large portion of my holdings.
If You’re Confused it’s because Your Learning & It’s New!
If this sounds confusing, stay with me. It will be easier to just do it and follow along.
If you choose to invest, you’ll choose a dollar amount (for those in the US) that you’re comfortable with. There are generally no minimum deposit or minimum balance requirements; however, some services have minimum withdrawal requirements (BlockFi is 0.003 BTC and 0.056 ETH which is approximately $35 at current prices).
To begin, it’s generally advised to start with an initial investment was $100. I need to mention I cannot actually recommend or advise you on any of this tho. You must make this decision on your own or speak with your financial advisor (who likely has no idea what cryptocurrencies are yet).
Most of the time you can do one free transfer per month. However, the fees are silly small so it’s not a big deal. In a normal savings account or credit union, the law prohibits you to transfer more than 3 times. This is not the case with this account. Again, you’re just charged a small fee…like pennies on the thousand (th) dollar haha.
2. Open a Crypto Savings Account
For myself, I highly recommend BlockFi. There are others but frankly, they make me nervous. They seem “off.” I’m not saying they are illegal, but I just don’t feel as comfortable. BlockFi is considered a financial institution and is located and SEC approved in the United States. That helps a lot.
They also have security insurance for their company which you can read about on their website as well.
It seemed to have a decent range of coins available, and generally better deposit rates than other competitors I researched. Setting up your account is a breeze, and they use the same bank-level encryption that every other financial institution uses to protect your holdings.
Your Traditional Savings Accounts do not have anything on BlockFi. The growth potential is tremendous. My high yield savings account has never felt so good.
3. Transfer Dollars Into Your Crypto Savings Account
The next step is to transfer your crypto (if you have it) or your US dollars into your account. Here are your options:
As I mentioned, BlockFi now offers ACH (checking account) transfer. It will take roughly 7-10 business days. The bank is very slow and then BlockFi holds to confirm it for a couple of days. As mentioned, Crypto is high risk and they need to ensure the money you said you had wasn’t stopped before you already invest it.
It’s also important to note that when you deposit dollars, you’re purchasing Blockfi’s USD stablecoin which is called Gemini (GUSD)
4. Select Which Currency You Want to Invest in and Hold
Once you purchase your stablecoin (or Bitcoin, Ethereum, etc), you may trade this into any other currencies within the platform. If you’re after just replacing your savings account, avoid the urge to day trade crypto. Short-term capital gains alone are a bear as well as the platform his good fees and will eat up profit potential.
In this example, I’m trying to offer you as stable of an ROI as I can get that closely mimics traditional savings accounts, but with a higher return.
Also, the stable coins offer the highest interest rates as you can see here:
I chose USDC as my preferred currency because of the 8.6% and “stability” of the coin. The more you learn and the more comfortable you get with the others, you can easily exchange your USDC and buy Bitcoin, for example.
If you’re just adding U.S. dollars to your Blockfi account, then you might as well stick with Gemini.
5. How do I Earn the Interest on My Crypto Savings Account | High Yield Compound Interest
Once you’ve deposited money in your account, you don’t need to do anything else. You are now locked into earning true passive income! Congratulations!!
Interest will accrue daily and is deposited in your account monthly which causes the infamous compound effect. It’ll look something like this:
6. Traditional Savings Accounts vs Crypto Savings Accounts
The first thing everyone knows is that your dollar through an accredited and certified bank can carry a federal insurance policy of $100,000. Cryptocurrency does not. The Federal Government can barely say the word Bitcoin yet but they sure like to tax it.
So, first, your savings account is FDIC insured. If someone or something “breaks the bank” the Fed has said they will back you up. (They are really good at printing money, aren’t they?)
Second, the U.S. dollar is the world reserve currency. It is backed by the U.S. government. However, the U.S. government does not back any of our stable coins in BlockFi or another platform…yet.
Third, a stable coin tied (or pegged) to the U.S. dollar is not at all the same as a dollar. You may read this article about Tether’s backing.
Fourth, big institutional banks have billions (with a B) to invest in securities. I would love to hear from anyone that knows how to analyze this. That said, Big Institutions are just getting started seeing Bitcoin as a safe haven and solid investment for additional cash reserves to hedge inflation and the plummeting dollar.
7. How Much To Invest
It’s important you understand the risks. As I mentioned, I’m a high-risk taker. If you’re not, then go small, get your feet wet, learn more about crypto and the companies and tech that are most certainly our future.
I wouldn’t suggest putting your emergency fund money in an account like this, or any money that you think you can’t live without. It will take time to access it as well as a possible tax transaction once you “sell” your stable coin (it will be taxed, your interest is taxed, even tho it will look like $1 for $1.
The risk of you losing money is unlikely, but it’s still possible. Only you can answer, is it worth the risk anyway?
Which Bank gives you the best high-interest rate so you earn that compound interest?
By now you’ve figured out we recommend BlockFi. A truly revolutionary bank that not only gives you the awesome interest rates we’ve been discussing (8.6% APY for USDC coin), but you also can borrow against your holdings. Essentially you’re taking a loan out from yourself and paying the bank around 5.9%APY on your money. It’s a super awesome deal.
Imagine buying a house, car, vacation, and just making some minimum payment essentially to yourself. Now, if you fail to pay, the bank just casually takes your crypto as payment. Let’s not do it that way shall we? ?
Open a BlockFi Account Now and Earn $10 Free Bitcoin and Start Receiving 8.6% APY on your Money
Central Bank, Financial Crisis, and your Crypto Savings Account – Does it Make Good Financial Cents?
Holding digital assets is a weird thing for 90% of the global population. We are still very early in this. Those “Holders” of Bitcoin understand this. Those just entering and buying their first tokens see the process, the annual percentage yield, and overall cryptocurrency savings and are running to help protect their wealth.
For me, this works best for long-term cryptocurrency holders. It also works great for personal finance for those persons that want to increase their rate of return over a period of time on their liquid assets.
I would put a significant amount of money behind this account if my principal was insured against loss and theft in similar ways to the US banking system.
Don’t Sell Your Cryptocurrency, Get a Loan using Your Own Collateral | Crypto-Backed Loans
One of the issues the last 10 years that coin holders have had is the inability to access all the cash you may have tied up into your crypto assets. However, BlockFi now allows you to take out a loan using your cryptocurrency investment as collateral.
Zero Soft or Hard Credit Pull for a Crypto Collateral Loan!
No Credit pull! There is not any hard or soft credit pull. No High-Interest Rates! There are just different rates for the amount you want to borrow versus the amount of crypto you hold on the lending platform. I believe the highest is 9.7% and goes down to 4.9% depending on your crypto holdings aka collateral.
When you take out a loan against your collateral this is now locked savings account basically. Meaning, while you may have to pay interest on your loan, your crypto could see another 300% or more run-up during the year. Who won that deal? Pretty cool huh!?
Using Your Crypto as Collateral is a non-taxable event
Plus, because you didn’t sell your crypto to use your cash, it’s also considered a non-taxable event because you didn’t physically sell your crypto holdings. (Please consult your tax advisor for clarification).
What other savings wallet allows this kind of incredible flexibility?
Market prices fluctuate so if one day you have $10,000 value in Bitcoin, it corrects 30-50% and you have a loan for $7,000, BlockFi alerts you and you need to add more money into the account or risk liquidating your assets.
Is Opening a Crypto Savings Account A Good Idea? | Final Thoughts
It’s probably obvious at this point that I’m a huge advocate for fighting back. The loss of our spending power on the dollar (and all country currencies across the globe)…
…the never-ending printing of money and high loans the USA is taking on…
…the desperate need for a store of value that protects my wealth which I consider better than Gold…
(I can’t really put a bar of Gold in my pocket and spend it on gas)
…means I highly recommend starting a crypto savings account.
I get to start earning compound interest at 8.6% (WHAT!?), the opportunity to dollar cost average your way into Bitcoin and other cryptocurrencies…
…the inevitable digital currency revolution that is taking place and will only advance as countries spend everything they have on pork they didn’t have to begin with.
Protect your wealth. No one else will.
Start Today. Use the link below to get an extra $10 in Bitcoin for your first $100 you deposit. And, that $100 will be worth $108.60 in 12 months. My Savings Accounts have NEVER paid me that…EVER.
Here’s a YouTube video you may find helpful. She is not correct about all the information she shares but I believe it’s helpful enough for me to share it here with you: