So, you might be wondering, what exactly is a crypto savings account, and how is it different than a regular cryptocurrency wallet or platform?
The main and primary difference is the interest it generates.
Typically, cryptocurrency like Bitcoin does not generate interest, as the coin does not natively generate those simply by holding funds in an account. The coins may appreciate in value, but the amount of coins will never change.
Most cryptocurrency wallets, whether they are hardware, offline, or even hosted/custodial wallets (such as a hot wallet hosted at an exchange), do not earn interest. You need to move your currency to a crypto savings account or interest account specifically for that. Crypto savings accounts are relatively new, and new platforms with competitive rates often arrive.
(one exception to this rule is Proof of Stake (POS) coins, like ETH 2.0)
These accounts earn crypto on crypto (or pay in-kind). Over time, you will see the amount of coins in your account growing, in addition to potential appreciation in value. This is key in why interest is the killer app for crypto.
These accounts earn interest in a very similar manner to a traditional savings account at a regular bank. The funds you deposit are eligible to earn interest, paid out on a routine basis, potentially locked up for a certain term (although many platforms do not have any lockup terms), or may require a minimum balance to earn interest. The bank, and in this case, the platform that hosts your savings account, lends out your deposit in return for interest on the loan to other users, businesses, or institutions.
Compare the best bitcoin interest rates for crypto savings accounts, and start earning on your crypto.