The crypto world is growing so fast that it’s hard to keep up. New crypto tokens, trading platforms, and exchanges are popping up, seemingly, by the day – each with its own rules, fees, and features.
With so many options available, choosing the right platform for investing needs can be daunting. Fortunately, we’re here to help.
In the article below, we’re taking you through a detailed crypto exchange fee comparison for some of the top platforms. By the time you’re done reading, you’ll have a much better idea of what to expect from each exchange, and you can feel confident choosing one that’s the perfect fit for you.
But, first, let’s start at the beginning.
What Are Exchange Fees?
To conduct an effective crypto exchange fee comparison, we first need to briefly define exchange fees. These are the fees investors must pay whenever they deposit, withdraw, buy, sell, or trade different cryptocurrency tokens. These fees may seem small on the surface, with most exchanges charging .02% to .6% per transaction, but these fees can reduce your profits if you’re not on the right platform.
Exchange fees are generally charged whenever an action is taken on the exchange. The most common fees an exchange will charge are:
- Withdrawal Fees – when an investor wants to pull crypto out in the form of fiat currency or transfer to another type of token
- Deposit Fees – when an investor moves money or crypto assets into a digital wallet or exchange platform
- Trading Fees – these come into play anytime an investor buys or sells crypto on the exchange
- Loans – these fees are less common but are charged on crypto lending platforms whenever a user borrows against collateralized crypto assets. These fees are another story for another day.
Let’s focus on the three most common exchange fees.
As mentioned, withdrawal fees come into play whenever an investor wants to take money out of the exchange. This may occur when they’ve made a profit or want to invest in a different cryptocurrency.
When users withdraw funds, they can usually do it in one of two ways. They can either withdraw fiat currency, like U.S. dollars, into their bank account, or they may want to move crypto assets to another location. This could mean moving their assets to another platform, another wallet they own or transferring to another person’s wallet.
You might be wondering, “why can’t I just keep my crypto on the exchange?” Well, the answer is: you can. However, some investors believe this exposes your crypto to a higher risk of being hacked or stolen. Therefore, most crypto users opt to keep their assets or funds in non-custodial crypto wallets. Using a third-party wallet means most investors will need to withdraw and deposit funds regularly.
Withdrawal fees can be structured very differently from exchange to exchange. Some exchanges will offer a certain number of free withdrawals. Others will offer free withdrawals into their particular wallet but charge you for withdrawals into a wallet provided by another platform.
Generally, withdrawal fees are structured on a “per currency” basis. Each currency will have its own flat withdrawal fee. For example, a particular platform may charge you .0035 ETH to withdraw your Ethereum assets. If you were to withdraw ALGO on that same platform, you might only be charged .1 ALGO. Each currency has its own withdrawal rate, corresponding to its own dollar amount based on the token’s value, while other platforms like FTX offer free withdrawals.
Naturally, if an exchange is going to charge a fee when you withdraw, they’ll also charge when you deposit. Many exchanges offer a number of methods to deposit money to their platform. Typically, investors can use bank transfers, charge a credit card, or use ePayment methods like PayPal and Apple Pay.
Money being deposited directly from a bank transfer is usually free of charge. But debit or credit transactions typically come with a fee ranging anywhere from 2% to 5%. If you choose to use an ePayment platform like PayPal, you may be charged 2.5% or more. It’s important to check your exchange’s policy to see how much it could cost you to add funds.
Trading fees can take on several different forms. While it seems like they can be complicated, they aren’t too difficult to understand. The important thing is to pay attention to how your particular exchange structures your fees.
Trading fees are generally structured in one of three ways:
- Percentage Fee – fees are charged as a percentage of the overall trade amount. Users can lower these fees if they trade with the platform’s utility token or execute a high volume of trades.
- Flat Fee – exchanges charge a fixed fee per trade. For example, a platform may charge a fee of $.99 for transactions under $10 in value and $5 for anything over that.
- Lower Rates – Similar to percentage fees, some platforms may lump their trading fees into the spread investors receive per trade. Compare the total amount of crypto you receive per dollar to what you would get on other sites. Online crypto tools are available to help you research the market rate and keep your chosen exchange honest.
Just being aware of these fees puts you ahead of the game. Now that you know what the most popular exchanges are charging, it’ll be much easier to keep your costs reasonable.
What Are Average Exchange Fees?
Fees for the major exchanges are generally tiered and priced on a “maker-taker” fee schedule. We’ll get into more on that later, but for now, just know that whether you’re viewed as a “maker” or “taker” in the market will affect the amount of your exchange fees.
Currently, “makers” can expect to pay anywhere between .02% and .5% of a transaction, on average, for their exchange fees. “Takers,” on the other hand, can expect to pay average exchange fees ranging anywhere from .07% to .5% of their transaction.
Leveraging online tools and researching how much crypto your dollar should buy you is all well and good, but how do you know if you’re paying too much in exchange fees? Unfortunately, given the large number of different exchanges, there aren’t too many fees that are standardized across platforms.
For example, one exchange may charge more for deposits but offer cheaper withdrawals. Another may seem to offer reasonable fees, but you may find you start to lose a lot of money due to the platform’s spread. Knowing what exchange fees should cost on average is another tool in your toolbelt to ensure you’re getting the best value from your exchange.
What is Considered a Low Exchange Fee?
Now you know what to expect to pay on average. But, how do you know if you’re getting a good deal on your exchange fees?
First, it’s important to discuss what “low fees” actually mean. You want to invest on an exchange with reasonable fees all around – both on crypto transactions and deposits.
When conducting our crypto exchange fee comparison, these are the lowest rates we came across:
- 3% or less for debit or credit card deposits
- .02% exchange fees per crypto trade with the potential for even lower at .003% if you stake FTT on the FTX exchange.
Focusing on both the deposit fee and exchange fee for each platform helps ensure you can invest while maintaining peace of mind and keeping the most money possible in your pocket.
Crypto Fee Comparison
Before we jump into our exchange fee comparison, we need to discuss the fee structure. We briefly mentioned the “maker-taker” structure of crypto exchange fees before, but here’s an explanation.
A maker is someone who creates a market by selling crypto and putting it into circulation. Takers, on the other hand, take crypto out of the market by buying tokens.
To help you further along in your crypto investing journey, we’ve done some of the work for you. Below you’ll find the rates for spot trading and the starting fees for each of the top platforms.
While this is a good snapshot of how each exchange relate to each other, the trading fees each platform charges are actually much more detailed. Most exchanges follow the maker-taker pricing structure model, but they also tier that pricing depending on the amount of volume traded. To help you better understand, compare, and decide let’s go through a more in-depth comparison by providing a detailed chart for each platform.
Kraken’s fee structure is a little different, and worth noting here. For beginner or casual investors, Kraken has an Instant Buy tier. The prices are standardized across this tier and will cost users 0.9% for stablecoin transactions and 1.5% for any other crypto pairs. The rest of their fee structure is broken down as follows:
Gemini also offers users within all pricing tiers a 0.01% Auction Fee rate.
After looking at the charts for the various exchanges, it’s clear that trading volume is an important part of this decision.
By now, our crypto exchange fee comparison has taught you everything you need to know about the major crypto exchange platforms. Investing on the wrong exchange could potentially reduce your profits and skew your investment results.
Once you choose your platform, you can start investing in FTX Token today. Visit our website to add FTX Token to your portfolio or stop by our blog for more information and research on the latest in crypto.
*FTX Token (FTT) is not available in the United States or other prohibited jurisdictions.