Staking cryptocurrency and holding funds in a traditional banking savings account are both ways to earn a return on your money, but there are some key differences between the two.
Higher rates - Higher profits
One key difference is the potential for higher returns. With staking, you can earn a higher annual percentage yield (APY) on your cryptocurrency compared to the interest rates offered by most traditional savings accounts. For example, on CoinSmart, you can earn up to 12.53% APY on your staked Polkadot tokens, compared to the 0.01% APY that many traditional banks offer on their savings accounts.
Be patient when staking
When staking cryptocurrencies, we should keep in mind that the funds will remain locked and will earn compound interest over the years in the native crypto which is being staked. The exposure to cryptocurrency volatility will still be in place.
The idea is that if you are a long-term holder and believe in the cryptocurrency you are holding, you might as well earn more of that crypto in the meantime and the same is applicable to the traditional markets.
Here is a step-by-step article on how to stake your crypto: How do I Stake my cryptocurrency
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