DeFi vs traditional banks: a comparison for European savers

A bank deposit account and DeFi lending both pay interest on money you set aside, but they work in different ways. Here they are side by side, with the alternatives people ask about most, and with sources.

Bank deposit account or stablecoins: where to keep your money in 2026?

They are different products. A bank deposit account is a claim on a bank: the bank sets the rate, often fixed for a term, and a national scheme such as Italy’s FITD covers it to €100,000. Stablecoins lent in DeFi earn a variable rate the market sets, with no lock-up but no deposit cover, in dollars and with different risks.

What really changes between DeFi and a bank?

Who stands between the saver and the borrower. A bank takes your deposit, lends it on to households and companies and keeps the difference between the two rates. In a DeFi lending market, borrowers pledge collateral and pay interest to whoever supplied the money, at a rate the market sets, minus the fees of the vault.

The gap shows in the ECB’s statistics. In August 2026, euro area banks paid households 0.29% on overnight deposits and 2.18% on new deposits with an agreed term, and charged 3.60% on new loans for house purchase and 3.77% on new loans to companies. That difference, the spread, pays for the bank’s costs and its profit.

DeFi lets savers lend into the same kind of lending markets banks use, at a rate the market sets: fewer middlemen between the saver and the borrower, and the risks of lending directly.

Bank deposit account and DeFi lending, side by side

Aspect	Bank deposit account	DeFi lending through unflat
Who holds the money	The bank: your deposit is a claim on it	Non-custodial: your money stays in a wallet only you control
Who sets the rate	The bank; on a term deposit it is usually agreed for the whole term	The lending market, not unflat: variable
Lock-up	A term on a term deposit; none on an account without one	No lock-up
Fees	Vary by account and product	No unflat fees; third parties may charge fees
Deposit guarantee	National scheme (FITD in Italy), €100,000 per depositor per bank	None: not covered by deposit guarantee schemes
Main risk	The bank failing, beyond the €100,000 covered	Smart contracts, losses in a lending market, a USDC de-peg, the EUR/USD rate
Rules	EU banking rules, supervision by the ECB and national authorities	MiCA for stablecoins such as USDC and for crypto-asset service providers
Currency	Euro	USDC, a dollar stablecoin
Transparency	Published financial statements	Deposits, yield and cover are public on the Base blockchain
Access	Branch or online banking	A mobile app, in English, in the whole EU

Sources: FITD, EUR-Lex, ESMA, unflat, October 2026.

What are the alternatives to a bank deposit account?

The four people ask about most are Italian postal bonds, Italian government bonds (BTPs), money market ETFs and lending stablecoins. They differ in who holds the money, who stands behind it if things go wrong, how long it is tied up and how much its value can move. None is best in every case: it depends on when you need the money and how much risk you accept.

Option	Who holds the money	Who stands behind it	Rate, with the latest figure	Lock-up	Costs	Main risk
Term deposit account	The bank	The FITD in Italy, €100,000 per depositor per bank	Fixed, set by the bank; euro area average on new deposits with an agreed term: 2.18% (August 2026)	The term you choose	Vary by bank	The bank failing, beyond €100,000
Postal bonds (buoni fruttiferi postali)	Cassa Depositi e Prestiti, through Poste Italiane	The Italian State	Set by CDP for each series, rising with the years you hold them	Redeemable early, but no interest before the minimum period	None to buy or redeem, apart from taxes	Losing the interest if you redeem early
BTPs	Your securities account at a bank or broker	The Italian State, which issues them	Fixed coupon; gross yield at the 13 October 2026 auction: 3.69% at 3 years, 4.24% at 7 years	Until maturity; before that you can sell on the market	Bank or broker fees	The price falls if rates rise and you sell early
Money market ETF	Your securities account; the fund holds short-term securities	Nobody: it is an investment	Follows short-term euro rates; €STR at 2.44% (14 October 2026), before the fund’s costs	None; sold on the stock exchange	Fund and broker fees	Its value can fall
Stablecoins lent through unflat	A wallet only you control	Nobody: there is no deposit cover	Variable, set by the lending market	No lock-up	No unflat fees; third parties may charge fees	Smart contracts, bad debt, a USDC de-peg, the EUR/USD rate

Source: ECB (bank rates for August 2026, €STR of 14 October 2026), Italian Ministry of Economy and Finance (auctions of 13 October 2026), Poste Italiane and CDP, FITD, unflat, October 2026. Taxes differ from product to product and are not in this table.

How do you choose between a deposit account, BTPs, postal bonds, a money market ETF and stablecoins?

Start with three questions. Do you want someone to stand behind your capital (the FITD for a deposit account, the State for postal bonds and BTPs)? Can you leave the money untouched until a set date? Do you accept that its value moves, with market prices or the exchange rate? If the first answer is yes or the third is no, stablecoins do not fit that money.

On unflat the difference comes down to three facts: no lock-up, no unflat fees, and money in a wallet only you control, with every transaction signed by you. The other side: no deposit cover, value held in USDC and so tied to the exchange rate, and a variable rate. What can go wrong and what unflat does about it is in Where your money sits on unflat, and who can move it and in the security section of the home page.

Is unflat a bank? Is my money covered like a bank deposit?

No. unflat is a technology platform and is not a bank or a financial intermediary. Funds deposited through unflat are not covered by deposit guarantee schemes (FITD or equivalent) and are subject to risk, including loss of principal. Never deposit money you cannot afford to lose.

A bank deposit is different. In Italy, the FITD covers deposits at its member banks to a limit of €100,000 per depositor, per bank, term deposit accounts included. Every EU country has an equivalent scheme under Directive 2014/49/EU. It pays out when a bank fails; it does not cover investments. Whether anything covers stablecoins lent in DeFi, and what unflat has in its place, is answered in Where your money sits on unflat, and who can move it.

How is the rate set, compared to a deposit account?

On a bank deposit account the bank sets the rate and states it before you open the account; on a term deposit it is usually agreed for the whole term. In a DeFi lending market nobody fixes it in advance: it moves with how much borrowers want to borrow, so it is variable and can fall.

Morpho Protocol is one of the largest DeFi lending markets (the largest is Aave). On unflat, Savings earned about 5% a year so far in 2026, variable. That is the average annual yield of unflat Savings (USDC) without cover, from 1 January to September 2026, after the vaults’ fees; past rates do not predict future ones.

Is DeFi as safe as a bank?

No, not in the same way: the risks are different. A bank deposit has a public deposit guarantee scheme behind it; DeFi has no equivalent. What it has are mechanisms that reduce some risks, not all of them: collateral on every loan, a public record and published code audits.

1. Collateral on every loan. If a loan gets too close to the value of its collateral, a liquidator repays it and takes the collateral (Morpho docs). A sudden crash can still leave bad debt.
2. Public record. Deposits, yield and cover are public on the Base blockchain.
3. Audits. Morpho publishes its security audits, and Sherlock reviewed the unflat app’s code in July 2026. An audit lowers the chance of a bug; it does not rule one out.

The risks remain: smart contract bugs, bad debt in a lending market, the vault curators’ choices, a USDC de-peg and the EUR/USD exchange rate. unflat offers optional cover from OpenCover · Nexus Mutual, off by default: it is discretionary, not insurance, and does not cover a USDC de-peg.

Currency and rules: what changes for a European saver?

Two things, especially if you think in euros. A deposit account is in euros, while DeFi lending runs mostly on dollar stablecoins such as USDC and USDT, so the exchange rate enters your savings. And the rules differ: banks follow EU banking law, stablecoins follow MiCA, the EU Markets in Crypto-Assets Regulation.

Savings on unflat are held in USDC, a dollar stablecoin, so their value in euros moves with the exchange rate. More in why unflat uses USDC.

MiCA (Regulation (EU) 2023/1114) has applied in full since December 2024. It sets rules for crypto-asset issuers, including e-money tokens (stablecoins tied to one official currency), and for crypto-asset service providers. Taxes depend on your country and the product; this article does not cover them.

How do you move savings from a bank to unflat?

You open an account, add money by card or bank transfer through MoonPay or Coinbase (or send USDC), move it to Savings and watch interest accrue in real time in the app. No lock-up, network fees on Base currently paid by unflat, and you withdraw whenever you want.

unflat never holds your money: it stays in a wallet only you control. The app shows card and bank transfer fees before you confirm. How it started: the story behind unflat.

DeFi does not replace the bank for everything: your current account stays where it is. For savings you don’t need day to day, it is one more option to weigh, with different risks.