Coinbase is one of the most widely used crypto exchanges around. It is the main go-to for people who like to invest in cryptocurrency.
People love its user-friendly interface and simplicity, but Coinbase comes with somemajor feesyou should be aware of. In fact, there's a fee for every single transaction!
If you want to know how the processes of Coinbase fees work, including how to avoid them, continue reading this article.
We've got some tips and information you're going to need. We are going to cover transaction fees, withdrawal fees and how to get lower fees to get the most out of crypto trading.
A Breakdown of Coinbase Fees
When you look over the Coinbase user agreement, you might find that the fees are a bit confusing, to say the least. Plus you have strange imposed limits and other regulations hidden in the small print.
In a nutshell, there is a fee for every digital currency transaction you make on Coinbase, whether you're buying or selling.
Buying Fees
One of the basic fees associated with crypto are buying fees. You can use fiat currency (like USD) to purchase cryptocurrency with Coinbase.
Coinbase allows buying with a bank account, debit or credit card, wire transfer or Paypal. If you decide to use Paypal, you will be charged Paypal's transaction fees along with the fees from Coinbase.
When you are buying BTC through Coinbase, the amount of your fees is automatically deducted from the total amount of your order.
So, let's say, you entered $100 into the app as the amount you are wishing to buy. For that transaction, you will be charged $2.99.
With that added fee, your full total for the transaction will end up being $100, but you will only get $97.01 worth of BTC at the current market price.
Here is an example of a $100 BTC purchase while paying from a bank account:
$1000 BTC purchase while paying from a bank account:
$100 BTC purchase while paying from a debit card:
These fees are always subject to change and can vary depending on your location and financial institution.
One thing to remember is that bank account fees for buying are at a much lower rate compared to using a card. Purchase cryptocurrency wisely and make sure to get the best deal when you make your initial crypto investment using fiat currencies.
Selling Fees
When you are selling on digital currency on Coinbase, the fees you’re responsible for will be automatically deducted from the amount you initially entered. In this example, we’ll use $100 again.
If you key in $100 is the amount you’re selling, the fee is 1.49%. Since the fees are automatically deducted, the total amount you are selling the cryptocurrency for is going to be $98.51.
That is also the amount you will see applied for your payment method of choice. However, a full $100 of BTC is going to be removed from your account.
Where You’ll Find Your Trading Fees
Regardless of whether you’re buying or selling the digital currency BTC, you will always receive an automatic charge for any necessary fees. You will see a full write up of your transactions in digital and local currency in addition to the fees you’re being debited on the confirmation screen.
How Much Money Does Coinbase Charge?
The fees charged by Coinbase are pretty high. And they can add up, especially if you use the service often. You will see the buying and selling fees we described above.
There may also be fixed and variable fees depending on the amount of the transaction. And when your purchases are smaller, there is a flat fee charged.
Here are the flat fees for the smaller transactions:
- If you are buying or selling in the amount of $10.99 or less, the trading fee is $0.99
- If you are buying or selling between $11 and 26.49, the trading fee is $1.49
- If you are buying or selling from $26.50 to $51.99, the trading fee is $1.99
- If you are buying or selling from $52 to $78.05, the trading fee is $2.99
Now that we’ve covered the flat fees, here are the variables.
You can make a transaction of up to $200 within the Coinbase system if you use either your bank account or USD wallet to buy or sell cryptocurrency.
However, if you are making a purchase or sale of $201 or more, the variable fee of 1.49% kicks in.
If you make a transaction of $78.06 or more, with a credit card or debit card and then transfer all your proceeds into your PayPal account, you will have to pay a variable fee in the amount of 3.99%.
Can You Really Avoid Paying Coinbase Fees?
While Coinbase's fees are pretty high in comparison to other brokers, so it's nice to avoid paying them if you can. To start, you will need to start using Coinbase Pro.
While its name implies that it is a version that should only be used for professional traders, don't allow it to intimidate you. There are a few extra steps while using Coinbase Pro, but it isn't much more difficult than the standard version you are already used to.
Don't let Coinbase Pro scare you, especially if you are looking to save on fees.
The main difference between the platforms is that the standard Coinbase is a broker. In other words, it helps you get access to Bitcoin and it charges you a big fee for it. If you have a high enough trading volume, you can avoid some of the higher rate fees involved for lower purchases.
Coinbase Pro Fees vs Coinbase Fees
Coinbase offers both there normal trading platform, (which is actually more of a brokerage) and Coinbase Pro which is for more advanced trading.
Coinbase Pro, on the other hand, is a cryptocurrency exchange. This means you can freely buy and sell Bitcoin on the open market instead of going through a broker type service like the regular Coinbase platform.
One major bonus here is that if you already have a Coinbase account you also have access to a Coinbase Pro account, you just may not have realized. You will simply log in using your same username and password. Although, the Coinbase Pro wallet is separate from your normal Coinbase wallet. Because your account is already connected, it's easy to exchange between the two wallets.
And the fees are vastly different between the two. Fees still apply to transactions in Coinbase Pro. However, Coinbase Pro will save you much more in the long run. This is especially true with things like with spread fees since your trades will be happening much faster.
In short, Coinbase Pro fees are drastically lower, but still not as low as the competition. If you need more info, you can read my comparison between Coinbase vs. Coinbase Pro.
Coinbase Pro does not offer card purchases, so naturally you will avoid those fees. Another benefit of trading with Coinbase Pro is that you have much more access to different cryptocurrencies.
When trading on cryptocurrency exchanges like Coinbase Pro, you should be aware of maker and taker fees. This fee structure shows the costs that Coinbase charges when you buy and sell. These fees always depend on the transaction amount. We will cover more the details of a taker fee and maker fee further on in this article.
Withdrawal Fees
With Coinbase & Coinbase Pro, there isn't a direct withdraw fee. However, there is a standard 'network fee' at the time of withdrawing that varies depending on how busy the network is of the selected coin.
So unfortunately, there is no way to skip this fee. In past years, you could transfer your coins from your Coinbase wallet to Coinbase Pro to skip this fee but that was changed a while back. If you use Coinbase or Coinbase Pro you are subject to some sort of transaction fee.
To lower your fees during your withdrawal, I recommend selecting a fast and low fee coin to do so. But please do be vigilant of taxes when trading coins to move them out of your Coinbase wallet. Keep in mind market fluctuations and consider holding your crypto for longer. This could be a good way to avoid losing some of your investment.
Personally, I move from exchange to exchange with LTC or XLM. However, if I'm worried about the price slipping or taxes, I just transfer the coin as-is and eat the fees. Odds are in favor the fee's are quite low anyways (or better than taxes)!
For example, I just moved 1 BTC the other day and it cost 0.0000417 BTC - which was around $1.35 to move over $35K in BTC (1/11/2021). Withdrawal fees can be avoided if you buy and sell on the right platform.
As a seasoned cryptocurrency enthusiast and expert, my in-depth knowledge of Coinbase and its fee structures allows me to provide valuable insights for both novice and experienced traders. Let me delve into the key concepts covered in the article:
Coinbase Fee Breakdown
1. Transaction Fees:
-
Buying Fees:
- Coinbase charges fees for every digital currency transaction, whether buying or selling.
- Various payment methods include bank accounts, debit/credit cards, wire transfers, and PayPal.
- Using PayPal incurs additional transaction fees.
- Fees for buying are automatically deducted from the total transaction amount.
- Example: A $100 BTC purchase could result in a $2.99 fee, leaving you with $97.01 worth of BTC.
-
Selling Fees:
- Fees for selling are automatically deducted from the entered amount.
- Example: A $100 sale with a 1.49% fee means you receive $98.51 for the cryptocurrency sold.
2. Fee Structure:
-
Flat Fees:
- Fees vary based on the transaction amount:
- $0.99 for transactions $10.99 or less.
- $1.49 for transactions between $11 and $26.49.
- $1.99 for transactions between $26.50 and $51.99.
- $2.99 for transactions between $52 and $78.05.
- Flat fees apply to both buying and selling.
- Fees vary based on the transaction amount:
-
Variable Fees:
- Transactions up to $200 with a bank account or USD wallet have no variable fee.
- Transactions of $201 or more incur a 1.49% variable fee.
- Credit card/debit card transactions over $78.06 with funds transferred to PayPal incur a 3.99% variable fee.
3. Avoiding Fees:
-
Coinbase Pro:
- Using Coinbase Pro can significantly reduce fees.
- Coinbase Pro is a cryptocurrency exchange, offering lower fees compared to the standard Coinbase platform.
- Coinbase Pro accounts are accessible with the same login credentials as regular Coinbase accounts.
- Faster trades on Coinbase Pro can save on spread fees.
-
Withdrawal Fees:
- No direct withdrawal fee with Coinbase or Coinbase Pro.
- Standard "network fee" during withdrawal varies based on network congestion.
- Transferring between Coinbase and Coinbase Pro no longer skips this fee.
- Choose fast and low-fee coins for withdrawals to minimize costs.
- Be mindful of taxes when moving coins and consider holding for longer periods to avoid transaction fees.
4. Coinbase Pro Fees vs. Coinbase Fees:
- Differences:
- Coinbase is a brokerage platform with higher fees.
- Coinbase Pro is a cryptocurrency exchange with lower fees, providing access to a wider range of cryptocurrencies.
- Coinbase Pro does not support card purchases.
5. Taker and Maker Fees:
- Cryptocurrency Exchange Fees:
- Coinbase Pro users should be aware of maker and taker fees.
- These fees depend on transaction amounts and reflect costs when buying or selling.
In conclusion, understanding Coinbase fees, exploring Coinbase Pro as an alternative, and making informed decisions on transactions and withdrawals are crucial for optimizing the cryptocurrency trading experience.
