Coinbase confirmed it will release a new crypto savings account that would give its consumers a 4% APY (Annual Percentage Yield), the actual amount of return earned on a savings deposit or investment you make on the new crypto account.
(Photo : Photo illustration by Chesnot/Getty Images)
In this photo illustration, a visual representation of the digital Cryptocurrency Bitcoin is displayed next to the home page of the application of the Coinbase cryptocurrency exchange platform on April 14, 2021 in Paris, France. Coinbase, America's leading cryptocurrency exchange, arrives on Wall Street on Wednesday April 14 as part of a 'direct introduction'.
On the other hand, APY also increases its value more as compound interest is added periodically to the total invested amount of crypto. This simply means that each interest payment becomes larger based on the higher balance.
The giant digital currency exchange platform announced that the new savings account is not SIPC-insured or FDIC-insured. Aside from this, Coinbase also stated that the account offers functions just like the features offered by other crypto lenders and exchanges.
Coinbase's New Savings Account
According to CoinDesk's latest report, the digital currency's new savings account seems to aim for banks since the offered APY is 50x higher than traditional bank savings accounts.
(Photo : Photo illustration by Chesnot/Getty Images)
In this photo illustration, a visual representation of the digital cryptocurrency Bitcoin is displayed in front of the Coinbase cryptocurrency exchange platform logo on April 14, 2021 in Paris, France. Coinbase, America's leading cryptocurrency exchange, arrives on Wall Street on Wednesday April 14 as part of a 'direct introduction'.
Also Read: Dogecoin Price Prediction Rises to 18% in 24hrs a Day Before Coinbase Launch
Although this is the case, the 4% APY of Coinbase's new savings account is still lower than other crypto exchanges, which offer around 8%.
However, Coinbase's Senior Product Manager Thorsten Jaeckel explained that the company is offering lower yelled since it doesn't lend to unidentified third parties.
"Pre-enroll today to earn interest on USD Coin (USDC), with rates more than 50x the national average of a traditional savings account," said Coinbase via its official blog post.
"Best of all, your USDC is guaranteed by Coinbase, giving you peace of mind while you earn interest," added the crypto company.
Its APY is based on the consumer's lent USDC (USD Coin). The company's senior product manager also explained that the new savings account is geared towards retail users. Aside from Coinbase, Ethereum money market's creator, Compound Labs, also did the same thing.
Should You Invest In Coinsbase?
Forbes reported that if you only have a $225 budget, your best bet is Coinbase. This company, which is one of the largest crypto exchanges in the United States, has been seeing massive revenue increases for the past years.
Just in 2021's Q1, Coinbase is already valued at $1.8. This massive rise took place after investors flocked to its platform to cash in on the rising cryptocurrency prices.
For more news updates about Coinbase and its upcoming products, always keep your tabs open here at TechTimes.
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Written by: Griffin Davis
