Getting started trading cryptocurrency can be a very daunting yet exciting experience. However, one aspect of trading which is often overlooked and sometimes results in a shock for new users are the fees.Remember, cryptocurrency exchanges are businesses, and they are in business to make money via fees. While the fees will vary from exchange to exchange we can outline for you the basic types of fees that you may need to pay. Simply put, there are three main types of fees that you should be aware of:
- Deposit fees
- Withdrawal fees
- Trading fees
Let’s start with deposit fees. This will depend if you are depositing crypto or cash and the menas of doing so. If using crypto, then there should be no charge from the exchange to deposit it. The network fees will be paid by the sender (which may be you), but this is standard for any crypto transaction, there should not be a fee to receive the deposit into your account.
Cash deposits are where things might get a little bit trickier. Depending on your location and the location of the exchange and the means via which you deposit, then you may incur fees. If you wish for simple cash deposits with minimal or no fees, look at creating an account in your country. This way you will be able to connect it to your bank account and deposits should be instant and free. Depositing between countries via wire or credit card may attract extra unwanted fees.
Next, let’s look at withdrawal fees. Again, it will depend on whether you are wanting to move cash or crypto off the exchange, but either way expect to pay a fee. The cost for withdrawing crypto will depend on the network being used and prices will vary depending on the demand at that time. Try to avoid withdrawing small amounts of tokens which have high network fees. And always look for ways to minimize this cost. For example sending $USDT on the Ethereum network may cost you up to $20 on many exchanges, however sending the same $USDT on either Binance Smart Chain or Tron will most likely cost less than $1 and confirm faster.
If you wish to withdraw cash to your bank account, then this will depend on your individual situation, but expect to pay something. Again, look for ways to minimize this cost. Cash withdrawals to a local bank account should incur negligible fees.
Finally, we have our trading fees. This is the amount you will pay, usually a percentage of the transaction each time you complete a trade. There should be no fee for placing a bid or listing a token for sale, the fee should only be upon completion of the trade. This fee does vary from exchange to exchange and in this highly competitive market it is good to shop around for the best deal with trading fees. Some exchanges will offer reduced fees if you hold their native token (BNB, KCS) and some may reduce fees if you trade a certain volume each month. As a rough guide, you will pay about 0.25% per trade. While this might seem to be a small amount, if you trade frequently or with volume it can add up quickly.
For a good list of exchanges and their fees, visit www.comparebitcoinexchange.com
Remember to always trade safely and be informed about the costs and risks associated with cryptocurrency trading.