A bank deposit and an RWA product may display an annual percentage rate, but the number alone does not make them substitutes. They differ in the contracting party, legal protection, currency, access to funds, and what happens after the operator becomes insolvent.
Legal protection
A bank deposit is a liability of the bank and may be covered by a deposit guarantee scheme within the limits and under the rules applicable in the relevant jurisdiction. A tokenized RWA product is generally not a deposit. The holder may have an ownership interest, a claim against the issuer, or a right defined by contract. You need to read the documents for the specific structure.
Rate and possibility of loss
The interest rate on a bank deposit is determined by an agreement for a specified period. The expected APR of an RWA product may change with the market. RWA adds issuer, custodian, stablecoin, smart contract, and foreign exchange risk. A higher rate is a signal to analyze the source of the risk.
Liquidity
Breaking a bank deposit early may mean losing interest. With RWA, exiting may depend on a redemption window, token liquidity, settlement of the underlying assets, or a lock-up period. “Online access” is not the same as guaranteed liquidity.
Fair comparison
Calculate both options in the same currency and for the same period. Deduct fees, currency conversion costs, and taxes. Then assess a stress scenario: a stablecoin price decline, a frozen redemption, or the insolvency of the relevant entity.
RWA may provide access to assets unavailable through a typical bank deposit, but it requires more analysis. Start with the RWA glossary, check the profile quiz, and compare products in the RWA centre. This material is for educational purposes and does not replace financial, legal, or tax advice.