Blog Crypto Crypto Savings Accounts or Staking: A Short Guide

Crypto Savings Accounts or Staking: A Short Guide

date September 23, 2022 time 4 min read 58 views

When it comes to your finances, it’s essential to understand the key terminology and for businesses like MyConstant to be accurate. So, we’ll get straight to the point: Crypto savings accounts are unlike traditional bank savings accounts. 

In fact, they shouldn’t be called crypto savings accounts at all. When people talk about crypto accounts, they’re usually talking about staking – which we’ve covered a few times before.

Differences Between Crypto Savings Accounts and Staking

The aims of both terms are very similar: 

Staking and savings accounts earn interest (albeit at different rates) and help you make the most of your money. However, how they achieve those aims is very different. When you stake your coins on a platform like 

MyConstant, you’re lending them to us so that you can earn money back (in the interest payments we discussed earlier). 

There are some key differences between traditional savings accounts and crypto staking accounts.
There are some key differences between traditional savings accounts and crypto staking accounts. (Source: Unspalsh)

Meanwhile, when you open a savings account with a bank or financial institution, you put your money into a savings account to earn interest. They won’t lend out your money for you, and you’ll only be able to withdraw it when you want to use it.

The key point to understand here is the risk element. Traditional savings accounts are more secure and protected by regulations designed to preserve your money. The interest rates may be lower, but you’ll have peace of mind knowing that you’ll be able to access your money whenever you want to.

With staking, there’s more risk involved. By lending money through a platform, there’s a small chance the borrower will not be able to repay the loan. Conversely, you will earn higher interest than most savings accounts.

Why You Should Stake Crypto

If you’re willing to take on a little risk with your investments, then crypto staking could be a good option for you. Let’s take a look at the benefits you could enjoy if you decided to lend out your cryptocurrency instead of keeping it in your wallet:

High-interest rates: You’ll earn more interest than you would in a traditional savings account. Most platforms offer at least 5% annual interest, and some offer much more. That’s significantly higher than what you can get from a bank or financial institution.

Flexibility:  You can choose between flexible staking, where you can withdraw at any time, or locked staking, where you select your term. For example, MyConstant offers up to 18% APR for locked MCT staking for 180 days and up to 15% APY for flexible staking on USDT or USDC. The choice is yours.

Ease of access: If you have crypto, you can open a staking account with it in just a few clicks. Go onto a platform like MyConstant or Binance, and stake the crypto of your choice. Once you pass your KYC, you can start staking in seconds and as often as you like.

Support projects:  Not all of the coins available on the platform will support staking, but many of the most popular ones will. You can decide which projects to support based on your interests and values.

Passive income: One of the best benefits you can get from staking is passive income. Your coins are working for you while you’re off doing other things. As long as you pass your KYC requirements and stake regularly, you’ll earn a steady stream of interest payments every single month.

The benefits of staking are clear. You could earn up to 18% APR with MyConstant by locking in your tokens for 180 days. And you can still earn interest even if the value of your tokens falls. So if you’re looking for a way to make some extra money, you may want to consider opening an account on a crypto-staking platform.

Types of Crypto Staking

Now that you know the benefits of crypto staking, it’s essential to understand the different types. The reality is there are dozens of ways to stake crypto, each with its own features. Let’s take a look at some of the most common types of staking:

Staking is a great alternative to crypto savings accounts.
Staking is a great alternative to crypto savings accounts. (Source Unsplash)

Fixed-term: One of the most common types of staking is “fixed-term” staking. This is typically referred to as “locked staking.” When you lock in your assets for a set amount of time, you place a certain amount of confidence in your investment. In return, you earn a higher interest rate than you would if you held your coins in a wallet. This is a great way to earn passive income without actively trading your coins daily.

Flexible: Another popular type of staking is “flexible” staking. This is a more flexible version of fixed-term staking. While “fixed-term” allows you to earn a fixed interest rate in a certain amount of time, “flexible” will enable you to change your mind anytime. You put the crypto in and withdraw whenever you want.

As we mentioned earlier, there are many types of staking products that carry varying degrees of risk and reward. Ensure you understand the products and be comfortable with the level of risk before investing.

Start Staking MCT Today

As you’ve seen, staking is a great alternative to crypto savings accounts. So why not take a look at our new native MCT token

It allows you to convert between multiple cryptocurrencies and access all kinds of other financial products, including investing and staking—all with a single coin. This way, you can experiment with different projects and ways to earn money.

Perks include:

  • Up to 18% APR from staking
  • 20% more interest from MyConstant investing products 
  • 20% reduction in borrowing fees on MyConstant 
  • 50% discount on NFT fees through MyConstant 
  • 50% discount on crypto swap fees on MyConstant 

It’s now available on PancakeSwap for US users, and everyone else can access it directly through MyConstant. Sounds good? Sign up today to start benefiting from your new knowledge acquired in our crypto savings accounts guide.

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George Schooling

George Schooling

Borrow against your multi-crypto portfolio in minutes from just 6% APR

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