Best Ethereum (ETH) Savings Accounts in 2024

With Ethereum being the second most valuable cryptocurrency in the market, there are many people who are constantly looking for ways to earn interest with it and build an income. One popular method of doing this is via ETH savings or growth accounts. Let’s take a look at how this can be achieved, and highlight some of the best services that offer this.

What is an Ethereum (ETH) Savings Account?

An ETH savings account is an account where users deposit their Ethereum and subsequently earn interest on it, acting as a form of passive income.

What are the Top Ethereum Savings Accounts?

Let’s take a look at the top ETH savings accounts on the market, and give a brief overview of them.

Ledn

Ledn is a fantastic choice for people looking for an ETH savings account. Via its Growth Accounts, users can earn interest on their assets, with the knowledge and peace of mind that they are working with a highly reputable and transparent company with improved safeguards for their assets. Unlike many of its competitors, Ledn is radically open about its activity, by publishing its monthly open book reports, and its biannual proof of reserves. Alongside this, Ledn even offers competitive rates.

Pros:

• Highly transparent company.
• Competitive ETH rates (currently, 3% APY)
• Open a Growth Account quickly and with ease.
• Ring-fenced structure to mitigate credit risks.

Cons:

• Limited to only four cryptocurrencies, including ETH.
• ETH Growth Accounts do not give the same voting privileges as staking.

Nexo

Nexo was once a prominent name in the crypto financial sector. Recent incidents have impacted Nexo's ability to offer its services in certain jurisdictions. Despite this, Nexo's crypto savings accounts have attractive interest rates.

Pros:

• Competitive ETH savings account rates.
• Compound interest offered.
• Automatic earnings.

Cons:

• Limited geographic availability
• Unclear how yield is generated

YouHodler

YouHodler is a financial platform that offers a variety of services in the crypto space, including crypto-backed loans, multi-currency wallets, and crypto conversions. One of its notable features is its crypto savings accounts.

Pros:

• Weekly payouts for saving accounts.
• Fixed and flexible options available.

Cons:

• The best rates are reserved for premium members who place the most money into the platform.
• High deposit fees for some payment methods.
• Lacking transparency.

Crypto.com

Crypto.com has grown to become one of the leading platforms in the cryptocurrency sector. Beyond its range of trading tools, wallet services, and payment solutions, the platform also offers an Earn feature, which functions similarly to savings accounts for cryptocurrencies.

Pros:

• Relatively high-interest rates for several assets, including ETH.
• Flexible and fixed-term savings options available.
• Daily interest and weekly payouts available.

Cons:

• To get the best interest rates, you need to hand over significant amounts of money to Crypto.com.
• Lack of transparency.

Uphold

Uphold, founded in 2014, is a digital money platform that offers a variety of services, ranging from cryptocurrency trading to fiat currency conversions and more. While Uphold is known for its versatility in supporting a vast range of assets, its approach to savings is slightly different from other platforms, as it focuses on staking, rather than standard savings accounts.

Pros:

• Competitive staking rates.
• Weekly rewards paid out.

Cons:

• Rates are determined by the blockchain that offers its staking capabilities.
• Charges a premium for staking services, which can be handled cheaper without a third party.

BlockFi

BlockFi used to be one of the leading blockchain and crypto services on the market. However, problems with its risk management, along with various other factors, caused it to become insolvent and get tied up in legal procedures. At the time, it was well-known for its savings accounts.

Pros:

• A well-known company in the industry.

Cons:

• No longer functional.
• Highly opaque in its practices.
• Embroiled in legal proceedings.

Gemini

Gemini is mostly known as a crypto exchange, however the company offers several other features. One of which used to be its Earn service, which was a protocol that functioned similarly to a savings account. Sadly, as of recently, Gemini Earn is no longer accessible. Not only this, but many members of Gemini Earn actually lost money due to mistakes made by the company, along with Genesis, who partnered with them to provide this service. Thankfully, the company has announced a remuneration plan that aims to make users "nearly whole" in the future.

Pros:

• A reputable cryptocurrency exchange and ecosystem.

Cons:

• Saving services are no longer accessible.

Coinbase

Like Gemini, Coinbase is known primarily for its crypto exchange, yet it also provides a wide array of tools. Similarly, Coinbase had its own savings protocol, named Coinbase Earn, but recently halted its activity due to an ongoing investigation with the SEC.

Pros:

• A publicly listed company with a strong reputation.

Cons:

• Its Coinbase Earn savings service is no longer operational.

KuCoin

KuCoin is a crypto ecosystem with a focus on trading. While KuCoin is mostly known for its exchange, it does have the ability to offer ETH saving accounts. Unlike Coinbase and Gemini, KuCoin’s earning tools are still accessible and open to the public.

Pros:

• Well-established company in the crypto space.
• Fixed and flexible earning options available.
• Staking services provided, alongside.

StormGain

StormGain is a crypto ecosystem that offers a range of tools for a wide array of users. Their earning options are focused on Bitcoin mining and altcoin staking, which includes ETH staking.

Pros:

• A range of crypto tools available, alongside savings tools.
• Relatively competitive rates.
• Internationally minded, available in many countries around the world.

Cons:

• Focus on staking, rather than savings accounts.
• Best interest rates are reserved for VIP members.

CakeDeFi

CakeDeFi, currently known nowadays as Bake, is a DeFi saving service. This makes it strikingly different from the other cryptocurrency companies listed, as these have all had a CeFi focus to them. Bake provides staking and yield farming options, rather than standard savings accounts.

Pro:

• Decentralized protocol, offering an increased level of transparency.
• Focus on smart contracts and decentralized networks, rather than custodial actions.
• Easy to use.

Cons:

• Limited to staking and yield farming.
• Limited fiat options available.
• Rates are dictated by the ETH network, due to the nature of staking.

How Does an Ethereum Savings Account Work?

ETH savings accounts work very similar to any other crypto savings account. You essentially hold your assets in an account that is created either at an exchange or lending service platform, or within a decentralized application. Over time, you will earn interest on the assets put there. The amount you earn will depend on how much digital assets you add to the account, and for how long you keep it there.

Why Use an ETH Savings Account vs Staking or Fiat Accounts?

Let’s take a look at some of the major reasons why people opt for an ETH savings account, vs traditional loans or ETH staking.

Liquidity Concerns with Staking: At the moment, there is an estimated 20% of circulating ETH which is staked on its platform, with this rate expected to rise significantly by December 2024. Such an intense increase threatens the network's liquidity, which could impact the dApp space and overall Ethereum ecosystem. However, Ethereum savings accounts offer an enticing alternative that avoids such an issue. Unlike staking, which risks locking away a vast portion of ETH, savings accounts ensure asset fluidity. In such a turbulent time for DeFi, these savings accounts offer a reliable avenue for Ethereum owners to earn returns without the complexities and potential pitfalls of the staking sector.

Higher Interest Rates than Traditional Banks: Crypto savings accounts can often offer higher interest rates than those that you find in traditional finance. This is true of both Ethereum, and many other digital assets. This is partially because they are managed by projects or platforms that have less overhead costs than banks, as they usually operate with a smaller team and without physical branches. Plus, the volatile nature of cryptocurrency means that there are more opportunities to offer greater interest to end users.

Easier Access to Digital Currencies: For many people, gaining access to cryptocurrencies, including ETH, is easier than obtaining fiat. This can sound counter-intuitive at first, considering that cryptocurrency is often viewed as a tool only for the technologically savvy. However, some nations have unstable fiat currencies, and further impose restrictions on fiat bank accounts. They can also prevent citizens from working with fiat from other countries. For instance, if a country has poor international relations with the US, then using the US dollar may be tough for members of that nation. This means many will turn to cryptocurrencies like ETH, or even stablecoins like USDC as a means of accessing more financial instruments.

Flexible Withdrawal Options: Some ETH savings accounts, such as Ledn’s Growth Accounts, offer flexible withdrawal terms. This means that people can access their assets sooner rather than later in case they need them, even if they initially intended to have them locked away for longer. This is something that is not possible with ETH staking, as the period by which you hand your asserts over are determined by smart contracts, with no possibility of human intervention to change the terms. Just bear in mind that not every savings account provider will have this level of flexibility, and so it is important to carefully look for what the agreements within an ETH savings account state, before using one.

Important Factors to Consider When Comparing ETH Savings Accounts

There are several significant elements to keep in mind when trying to find the perfect ETH savings account for your needs. Let’s highlight them here.

The Interest Rates on Your Ethereum Holdings: Your interest rate determines how much you can theoretically earn with your assets. Each provider will have different methods of calculating this, and so the spectrum of interest rates on the market can be very wide-ranging. Some will even offer higher rates for people who reach a certain criteria. It is good to compare these against each platform. However, this is just one factor, and so it should not be the only factor you look into.

Fees for Deposits and Withdrawals: Some platforms have fees set for depositing and withdrawing ETH to and from your accounts. Withdrawal fees are especially common, and can sometimes be steep depending on whether you aim to access your assets prematurely. Keep this in mind and see if you can find the appropriate details for this. It is also worth keeping in mind that these fees are separate from the standard transaction (or gas) fees that you will pay for sending ETH somewhere. These are also worth factoring in, although they are largely unavoidable due to the nature of the Ethereum network requiring some fees to be paid to facilitate transactions. To mitigate the costs of these in particular, you should aim to deposit or withdraw your money at times when the network is not congested (meaning that it is inundated with other people’s transactions).

Your Chosen Platform’s Reputation: While interest rates and fees are important to keep in mind, they are only two pieces of the entire puzzle. Another extremely significant element that you need to keep in mind is the reputation of your savings account provider. Take a look at their history, and research whether they have faced any legal complications, or have any unusual skeletons in their closets. The best services are transparent and open about their activity.

Ethereum Savings Account Risks

Like every crypto endeavor, there are some inherent risks that come with having an ETH savings account. While this is considered a good alternative to earn interest on your digital assets, they still come with some potential pitfalls.

First off, digital assets savings accounts are currently not guaranteed or covered by any government deposit insurer or investor protection against losses anywhere in the world.

For starters, if the value of the ETH you hold in a savings account begins to deplete significantly and unexpectedly, then it could be hard to access your finances and take them out of the account, if you wanted to convert to fiat or a stablecoin like USDC. Different providers have different rules for early or premature withdrawals, and some are more flexible than others. If this is something that worries you, then keep an eye out for services with more open plans in this regard.

Another risk is that the company you choose could become insolvent or defunct in some way. If this happens, it could mean that your asset holdings become much harder to reach, as the service may choose to turn off withdrawals, or may not even have the assets to give them back to you anymore. The best way to avoid this risk is to extensively research the service you are looking at, and see if they have a good reputation and a dedication to transparency, such as by revealing their proof-of-reserves and open book reports. At Ledn, they adhere to both of these factors, as well as ensure that their Growth Accounts are ring-fenced, meaning that the credit risk that could potentially impact Growth Account assets is mitigated.

Should You Use An ETH Savings Account?

ETH savings accounts are a fantastic choice for many people, but they are not for everybody. In truth, you will only benefit from one if you own a sizeable amount of ETH, and you are comfortable keeping that money kept away for a prolonged time, with no intention of touching it. In other words, you need to be in a good enough financial position that you actually have digital assets to save, which you might not immediately need. With this in mind, it helps to work with a service that offers open terms, which as Ledn’s Growth Accounts. This means you can withdraw them significantly easier than with other savings accounts, and with staking.

You should also only consider an ETH savings account if you believe that the Ethereum network is worthwhile, and will stay relevant over time.  Holding ETH is typically seen as a sign that you support the cryptocurrency and the team behind it, and that you are optimistic about its future, regardless of any volatility concerns. This means you are mentally and financially prepared for the asset to fluctuate in value regularly. If you are skeptical about ETH, or feel that it is lacking as an asset, you may want to reconsider the idea of opening such a savings account– there is a chance that those doubts could grow, and leave you feeling financially vulnerable if you were to continue. Having some level of surety is important for peace of mind (even if disaster does not strike).

Conclusion

ETH Savings accounts can offer more flexibility and competitive rates vs. ETH Staking. With this guide, you should hopefully have gained some clarity and perspective. For those who support Ethereum, and have ETH that they wish to earn interest off, opening an account is a good idea that can potentially help to place people in better financial positions. Ledn’s ETH Growth accounts are one of the several services you should take a look at and seriously consider, as their reputation, competitive rates, and account structure make them the perfect choice for many crypto fans, enthusiasts, and traders.

Sponsored by 21 Technologies Inc. and its affiliates (“Ledn”). All reviews and opinions expressed are based on my personal views.