Crypto Exchange With Lowest Fees: Comparison Guide

Looking for the crypto exchange with the lowest fees? We're comparing the most popular crypto exchanges and the fees you'll pay in this 2024 guide.

Fees by crypto exchange

What fees will you pay on crypto exchanges?

Trading Fees:

• Maker Fees: Charged for adding liquidity (typically lower).

• Taker Fees: Charged for removing liquidity (typically higher).

Deposit Fees:

• Fiat Deposits: Varies by method (bank transfer, credit/debit card, e-wallet).

• Crypto Deposits: Usually free, except for blockchain network fees.

Withdrawal Fees:

• Fiat Withdrawals: Varies by method and location (bank transfer, card, e-wallet).

• Crypto Withdrawals: Blockchain network fees plus any additional exchange fee.

Additional Fees:

• Inactivity Fees: Charged on dormant accounts by some exchanges.
  Transfer Fees: May apply when moving funds between wallets within the exchange.

Trading fees

Cryptocurrency trading fees are charges imposed by exchanges when users buy, sell, or trade digital assets on their platforms. These fees serve as a primary source of revenue for the exchanges. They are typically applied to both fiat-to-crypto and crypto-to-crypto transactions. Here’s a deeper look into how they work:

Types of Trading Fees

• Maker Fees: These are fees charged to users who add liquidity to the market by placing limit orders that aren't immediately matched. Since these orders "make" the market by providing liquidity, the fees are often lower than taker fees.

• Taker Fees: These fees apply when a trader removes liquidity from the market by placing an order that is immediately matched against an existing order. Since this action "takes" liquidity out of the market, the fees are typically higher than maker fees.

• Flat Fees: Some exchanges may charge a flat fee per trade regardless of the size of the transaction, though this is less common.

Fiat-to-Crypto vs. Crypto-to-Crypto Fees

• Fiat-to-Crypto: When users trade fiat currency (like USD, EUR, etc.) for cryptocurrencies (like Bitcoin, Ethereum), the exchange typically charges a fee for converting the fiat into digital currency. These fees can vary widely depending on the exchange and the payment method used (e.g., bank transfer, credit card).

• Crypto-to-Crypto: When users trade one cryptocurrency for another (e.g., Bitcoin for Ethereum), the exchange will charge a fee for facilitating this trade. Crypto-to-crypto fees are generally lower than fiat-to-crypto fees.

Fee Structure

• Percentage-Based Fees: Most exchanges charge a percentage of the transaction amount. For example, an exchange might charge 0.1% to 0.5% of the total value of the trade.

• Volume-Based Discounts: Some exchanges offer reduced fees for traders who trade large volumes. As a trader’s 30-day trading volume increases, the fees may decrease.

• Membership or VIP Programs: Certain exchanges offer lower fees to users who hold a certain amount of the exchange's native token or who qualify for higher tiers based on trading activity.

Deposit and withdrawal fees

Some exchanges impose fees for deposits and/or withdrawals. Deposit fees can vary depending on the payment method used but are generally less common, as exchanges aim to encourage users to fund their accounts. For cryptocurrency withdrawals, fees are often limited to the blockchain transaction costs (usually a flat fee), but some exchanges may also charge additional fees depending on your location or the type of withdrawal (crypto versus fiat).

These fees can vary significantly depending on the exchange, the payment method used, and the type of currency being deposited or withdrawn (fiat or cryptocurrency). Here's a detailed breakdown:

Deposit Fees

1. Fiat Currency Deposits

   • Bank Transfers: Many exchanges offer free or low-cost deposits via bank transfer, especially for domestic transfers. However, international transfers might incur higher fees due to the involvement of intermediary banks.

   • Credit/Debit Cards: Depositing funds using a credit or debit card is usually more convenient but can come with higher fees, often ranging from 2% to 5% of the transaction amount. This is due to the processing fees charged by credit card companies.

   • E-Wallets and Other Payment Methods: Some exchanges accept deposits through PayPal, Skrill, or other e-wallets. These deposits may also carry fees, typically similar to or slightly lower than credit card fees.

   • Fee Variability: Some exchanges absorb deposit fees to encourage users to fund their accounts, while others pass these fees on to users. It's important to check the fee structure of the exchange before making a deposit.

2. Cryptocurrency Deposits

   • Typically Free: Most exchanges do not charge fees for depositing cryptocurrencies. The only cost associated with this type of deposit is the network or blockchain fee, which is paid to the miners or validators processing the transaction.

   • Minimum Deposit Amounts: Some exchanges might require a minimum deposit amount for certain cryptocurrencies, but this is generally not a fee but rather a threshold to activate the deposit.

2. Withdrawal Fees

• Fiat Currency Withdrawals:

  • Bank Transfers: Withdrawing funds via bank transfer typically incurs a fee, which can vary based on the currency, the user's location, and the type of transfer (domestic vs. international). Domestic withdrawals often have lower fees compared to international withdrawals.

  • Credit/Debit Cards and E-Wallets: Some exchanges allow withdrawals to credit/debit cards or e-wallets. These methods are generally more expensive than bank transfers, with fees often ranging from 1% to 5%.

  • Withdrawal Limits: Some exchanges impose minimum and maximum withdrawal limits. Exceeding these limits may incur additional fees or require additional verification.

• Cryptocurrency Withdrawals:

  • Blockchain Transaction Costs: The primary cost associated with withdrawing cryptocurrencies is the blockchain transaction fee, which is paid to miners or validators. This fee is usually a flat rate and depends on the congestion of the network at the time of the transaction.

  • Exchange Fees: While many exchanges pass on only the blockchain fee to users, some may add a small withdrawal fee on top of it, especially if the withdrawal is small or frequent.

  • Dynamic Fees: Some exchanges offer dynamic fees based on the network's current congestion. This can be beneficial as it allows users to choose between faster transactions with higher fees or slower transactions with lower fees.

Read next: Wait, do I need to pay tax on crypto fees?

Interest, borrowing, and liquidation fees

Exchanges such as Kraken, Poloniex, and Bitfinex offer margin trading, allowing users to borrow funds to increase their trading position and leverage. These exchanges typically charge fees based on the borrowed amount and an interest rate determined by the available supply of funds if a trade results in liquidation, an additional fee may be charged.

Impact of Trading Fees

• Cost of Trading: High trading fees can eat into profits, especially for high-frequency traders. It's crucial for traders to understand the fee structure of the exchange they use to optimize their strategies.

• Exchange Choice: Fees can influence a trader’s choice of exchange. Some traders may prioritize low-fee exchanges, while others might prefer exchanges with better security, features, or liquidity, even if the fees are higher.

How to pay lower crypto exchange fees

Market makers & volume discounts

To boost liquidity, many exchanges offer reduced trading fees for “market makers”—traders who place limit orders rather than market orders—and for those with high trading volumes.

Exchange token discounts

A growing trend among exchanges is offering fee discounts to users who hold and use the exchange’s proprietary cryptocurrency token. Examples include KuCoin, Huobi, and Bitfinex. Typically, these discounts decrease annually until they are eventually phased out after four to five years.

Don't forget the tax bill...

Whatever exchange you're using, you'll need to pay tax when you trade or sell crypto on an exchange and make a gain, as well as potentially Income Tax on a number of other transactions like staking and other rewards. Koinly integrates with more than 800 exchanges to let you calculate your crypto taxes easily and quickly.