How to Get the Lowest Crypto Exchange Fees?

Crypto exchanges play a vital role in the evolution and widespread adoption of cryptocurrency. These digital marketplaces facilitate the buying and selling of thousands of crypto assets, making it easier than ever to become a trader. However, beginner investors soon realise that cryptocurrency exchanges charge fees for various actions within their platform. 

Crypto exchange fees can significantly impact your profitability when trading. That’s why many traders do whatever they can to seek out the lowest fees possible. To help you out, we’ll show you how to reduce the fees you’ll need to pay when trading through a crypto exchange. After reading this article, you’ll have a greater understanding of which fees you’ll need to pay so that you can keep more of your hard-earned digital wealth. 

Which Crypto Exchange Fees to Expect

When trading through a cryptocurrency exchange, your fees can quickly add up. But what fees are actually involved when buying and selling crypto assets? Here are the most common fees you can expect to pay when using a crypto exchange: 

• Deposit fees – When you add funds to your account, you may incur a deposit fee. Depending on the exchange you use, this can be applied as a percentage of the amount you want to deposit or as a flat fee. Some exchanges also impose minimum deposit amounts, meaning you will have to deposit a predetermined value of funds each time. 

• Withdrawal fees – Each time you want to cash out your assets, you will also need to make a crypto withdrawal fee. Withdrawal fees are the main form of revenue for most crypto exchanges. Again, some exchanges charge a flat fee, whilst others charge dynamic ones. This means that the amount you pay depends on various factors, such as network conditions. 

• Trading fees – Whenever you buy or sell cryptocurrency through a crypto exchange, you will be charged a trading fee (also known as a transaction fee). Typically, these charges can be separated into two categories – Maker fees and taker fees. 

Maker fees apply to cryptocurrency orders that do not match with an existing order right away. Conversely, taker fees are for orders that do immediately match with an existing order.

Makers are adding orders to the order book, increasing liquidity, whilst takers are removing them and subsequently decreasing liquidity. Because of this, a maker fee is usually lower than a taker fee. Other factors that can influence these fees include each trader’s average trading volume, market conditions, and the type of crypto transaction. 

The Best Ways to Ensure Low Crypto Exchange Fees

As you can see, you’ll face a fee for nearly any action you make through a crypto exchange. These fees can be frustrating and may even prevent you from reaching your investment goals. After all, when it comes to crypto trading, we want to make money rather than spend it. If you want to reduce costs when trading, check out our list of the top ways to get the lowest exchange fees possible: 

Choose a Low-Cost Crypto Exchange

The most obvious way to reduce exchange fees is to find a low-cost option. There are tons of different exchanges to choose from, each with varying fees and features. It’s generally not a good idea to pick an exchange based on its fees alone, as you may be putting yourself at risk. The best crypto exchanges will opt to charge minimal fees without neglecting other features, such as security measures. 

One crypto exchange that has established an excellent balance between fees and features is Binance. For starters, this exchange does not charge users any deposit fees. Withdrawal fees through this platform are also fairly low but can change due to factors such as network congestion. Binance charges 0.1% for both maker and taker fees.

Furthermore, this platform is extremely easy to use, has robust security, and supports a wide range of crypto assets. Due to this, Binance is a top-tier option for anyone who wants to cut down on fees when using a centralised cryptocurrency exchange. If you’re interested in using a different crypto exchange, we recommend checking its fee schedule and structure beforehand so that you don’t experience any unpleasant surprises when trading. 

Opt for a Decentralised Exchange 

More experienced crypto traders also have the option to slash fees when trading by using a decentralised crypto exchange rather than a centralised one. Decentralised exchanges are marketplaces that facilitate peer-to-peer (P2P) transactions. Since decentralised exchanges do not require the participation of an intermediary, they have much lower fees than their centralised counterpart. 

However, decentralised exchanges are much more complicated and can be tricky for beginners to navigate. Users must know how to use crypto wallets that can interact with smart contracts in addition to understanding security-related concepts. With this type of exchange, you’ll be on your own. If you’re not careful, you can commit errors that can lead to a loss of funds. 

Try a Crypto Brokerage

If you want to avoid exchanges altogether whilst still having an optimal crypto trading experience, you can try out a crypto brokerage. Brokerages exist to assist traders through advanced trading tools and tailored resources. They are best suited for beginner traders due to their accessibility but can benefit traders of all experience levels. 

Unlike crypto exchanges, brokers provide a personalised experience for traders. The role of a brokerage is not to facilitate transactions but rather to help their users build confidence in a safe environment. One common feature of brokers is a demo account that enables traders to practise trading using dummy funds. Brokers can also guide their users towards success by assisting them in implementing new trading strategies and refining their skills. 

To save money when finding a brokerage, we suggest joining a free-to-use crypto platforms. Bitcoin 360, for instance, enables users to connect with a broker at no extra cost. Relying on such platforms rather than finding a broker alone can also save you plenty of time so that you can get started with trading as soon as possible. Overall, using a broker is a great way to dodge cryptocurrency exchange fees without sacrificing your user experience. 

Plan Your Transactions 

To further cut down on crypto trading fees, you can carefully plan out your transactions. Since many exchanges implement fees on a per-transaction basis, the more transactions you make, the more fees you’ll pay. This structure can be detrimental for many users, especially those who participate in short-term trading strategies such as day trading. 

Although, in some cases, you cannot avoid regular fees, it’s still possible to adjust your transaction schedule to save some money when trading. For example, planning ahead when making deposits and withdrawals can be highly beneficial. Once you’ve established your budget, you can make a large deposit that covers your transactions for a long time rather than regularly updating your account with smaller amounts. 

Additionally, engaging in long-term trading strategies can also lower most trading fees. HODLing, which means to “hold on for dear life”, refers to holding onto assets for an extended time period. Strategies such as these eliminate the need to make regular withdrawals, deposits, and transactions. This can save you a lot of money in the long run, meaning you can even extend your trading budget. 

Whatever strategy you decide to use, carefully planning out your transactions and being tactical with fees can really pay off over time. 

Summary

To conclude, when buying and selling cryptocurrency through an exchange, you can expect to encounter a range of different trading fees. The most common include deposit, withdrawal, and trading fees. Reducing these fees is actually simpler than it appears, with the first option being to seek out a low-cost crypto exchange. More experienced traders also have the option to try P2P selling through a decentralised exchange. Alternatively, you can join a crypto brokerage to receive an unmatched, tailored trading experience. 

Most importantly, though, you should aim to plan out your transactions to reduce how often you’ll incur a fee. This can take some practice and may be time-consuming, but it is undoubtedly worth it if you want to get the lowest fees possible. Good luck, and we hope you have a profitable cryptocurrency trading experience!