Trading fees may escape your attention if you’re eager to dive into the crypto market and just want to get started. But fees are a guaranteed expense, so why not reduce the costs as much as possible to increase your net gains? We’ll explain the different kinds of fees—including the ones that aren’t so obvious—and how you can save money by choosing your trading platform carefully.

How trading fees affect your crypto purchases

Fees may have a bigger impact on your trading activities than you think. Let’s say a crypto trading platform advertises a fee of 1%—if you buy $100 worth of bitcoin or another cryptocurrency, you’ll get $99 worth of crypto.

Sounds straightforward—but that may not be the only cost. Crypto trading platforms use varying terms to describe their fees. For example, that 1% fee might be called a trading fee or a trading commission; others apply a spread on the buy and sell price; and others may charge both. Before you trade, it’s best to find out the total price, not just the fee advertised.

Types of crypto fees: trading, deposit, withdrawal, staking and network fees

Here are the different types of crypto trading fees to be aware of:

1. Trading fee, commission or spread

The trading fee is the total you pay to buy and sell cryptocurrencies using Canadian dollars. This fee varies from about 0.10% to over 4% per transaction, depending on several factors—most importantly the platform’s fee structure and your payment method. Credit and debit card purchases tend to be more expensive, while purchases funded by e-transfers and wire transfers tend to be free or have low additional costs.

Some platforms charge a standard percentage of each buy or sell transaction, while others may apply a spread to the bid and ask prices, a quick-buy fee or some other markup cost. A spread is expressed in basis points (bps), with 100 bps equalling 1 percentage point. So, if your trading platform applies a spread of, say, 125 bps, it means you’ll pay a fee of $1.25 on a $100 transaction (1.25%). This may not seem significant for a $100 purchase, but it translates to a fee of $125 on a $10,000 purchase.

What about platforms that say they don’t charge a commission—does that mean trading is free? Likely not. Instead of taking a commission, these platforms might charge a spread or a quick-buy fee, as explained above. Do your due diligence and find out if your platform has markups by reading the fine print in your account signup agreement and the fees section of your platform’s website.

2. Deposit and withdrawal fees

The deposit fee is what you’ll pay to transfer dollars from your bank account into your trading account, and the withdrawal fee is what you’ll pay to transfer dollars from your trading account to your bank account. To encourage the use of their platform, crypto exchanges typically don’t charge a deposit fee; however, for dollar withdrawals to your bank account, you may be charged a flat fee or a percentage.

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