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 convenience, but Coinbase comes with some major fees you should be aware of. In fact, there's a fee for every transaction!
If you want to know how the process of Coinbase fees works, including how to avoid them, continue reading this article. We've got some tips and information you're going to need. And if you don't already have an account, use my link below to sign up.
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A Breakdown of Coinbase Fees
When you look over the Coinbase user agreement, you might find that the fees are a bit confusing. Plus you have imposed limits and other regulations hidden in the small print.
In this section, we'll start with the fees.
There is a fee for every digital currency transaction you make on Coinbase, whether you're buying or selling.
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, for example, 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.
Here is an example of a $100 BTC purchase while paying from a bank account:
Here is an example of a $1000 BTC purchase while paying from a bank account:
Here is an example of a $100 BTC purchase while paying from a debit card:
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 low. But 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 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%.
The Possibility of Bank Fees
On top of the Coinbase transaction fees, you may see some fees outside of your Coinbase account – we’re talking fees from your own bank.
Some users are charged a 3% foreign transaction fee if a transaction is made via a credit card or debit card. The 3% is standard for international conversions, but it really depends on your bank.
The reason some people get these charges is that Coinbase works with a company that’s based in London to process its credit card and debit card transactions.
Just so you can have a clear understanding of what to expect, you should speak with your bank to find out if those are fees you’ll ever need to worry about when buying digital currency.
Can You Really Avoid Paying Coinbase Fees?
While Coinbase’s fees are pretty reasonable in comparison to other brokers, it’s still nice to avoid paying them if you can. To start, you will need to start using Coinbase Pro. If you’re unsure what’s the difference between Coinbase and Coinbase Pro, read this article.
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.
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 fee for it.
Coinbase Pro, on the other hand, is an exchange. This means you can freely buy and sell Bitcoin on the open market.
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.
And the fees are vastly different between the two.
With Coinbase, there isn’t a direct withdraw fee. However, there is a network fee at the time of withdrawing that varies depending on how busy the network is.
To avoid any withdraw related fees, you will need to remove your funds through Coinbase Pro.
Don’t worry, it’s pretty easy to do. Sign into pro.coinbase.com and log in with your Coinbase information.
Next, click on “My Wallets” at the upper right area on the screen and then press “Deposit.”
Enter in the amount of Bitcoin you want to be moved from Coinbase to Coinbase Pro, then when you want to withdraw it, you won’t have to pay any fees.
While we’re on the subject of withdrawing, make sure you have a secure wallet off the exchange when you’re holding long term. I personally use this wallet.
If you want to buy Bitcoin with a debit card, you will receive your Bitcoin instantly, but there’s a fee associated with it. But if you are willing to wait for the transfer, use your bank account to avoid the associated fees.
With that said, Coinbase Pro doesn’t charge a fee to add money to your account because it isn’t a broker. However, there is simply a fee to use your money to buy Bitcoin. On the other hand, there is a trading fee.
Buying cryptocurrency using a limit purchase or limit order is a simple way to save money on trading fees.
Coinbase Pro utilizes a popular trading module called maker-taker in order to determine its trading fees. Here's how the module works:
A Maker order is one where you add liquidity. This means your order is added to the order book as either a buy or sell order.
In a transaction as a maker, you will be making your own offers. The buying price you choose should be lower than the current selling price in the limit order.
As a 'maker', you have to pay a trading fee due to an update to Coinbase's terms on March 22nd, 2019. You can learn more about the change from Coinbase directly here.
A 'taker' is when you remove part of the order book. So, you're either buying or selling to a trade that's been listed in the order book.
These trades are completed instantly, but you will have to pay a fee between .0% and .50% for this transaction. If you want to see the exact fees, you can read about it directly from Coinbase here.
Coinbase Spending Limits
Coinbase fees take a bit of time to understand. But while you're still learning about those parts of the app, it's also important to understand its spending limits.
You will have limitations on how much you can purchase and sell through Coinbase each week. But keep in mind that this can change with time. Coinbase expands spending limits based on a few different things.
Such as, how long you've been trading and how much you've traded. They will also look at whether you've completed your identity verification with personal details like your government ID and phone number.
Another thing not many people know is that you can help increase your limits by adding more financial information to your account. This includes bank accounts, debit cards, and credit cards.
Doing so is also useful if you plan on becoming a heavy investor.
Keep in mind though that these spending limits only apply to Coinbase. You will need to communicate with your bank to find out what your limits are if you have them.
Coinbase is a great product. But Coinbase fees aren't worth the hassle. So, go ahead and check out Coinbase Pro to save money on your withdraws, purchases, and trades.
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