How To Avoid Coinbase Fees in 2023
Coinbase is a popular exchange in the crypto industry. It offers services ranging from the trading of cryptocurrency (buying and selling), currency conversion to currency storage.
The Coinbase platform is targeting inexperienced users to easily buy and sell cryptocurrency with an user-friendly interface. Coinbase is asking a high fee for this service, which most beginning users don’t know.
However, there are several tips to avoid these high Coinbase transaction fees.
Switch to Coinbase Pro
The Coinbase Pro application presents a more excellent opportunity for saving on your transaction fees. It is the upgraded version of Coinbase, which is suitable for the professional digital asset traders. You can see the normal Coinbase application as a broker and Coinbase Pro as an exchange.
Unlike Coinbase, Coinbase Pro uses the maker-taker fee tariff to determine the monthly trading fees. A comparison between Coinbase fees and Coinbase Pro fees, exposes an apparent difference in the pricing. For instance, if you are depositing up to $10,000, the transaction fee is only 0.5%. The 0.5% percentage is standard regardless of whether you are a taker or a maker. The same transaction will cost you 1.49% in fees for a Coinbase bank transfer or even 3.99% for a debit card transfer in the USA.
How to switch to Coinbase Pro?
If you have an account with Coinbase, you can also log in to Coinbase Pro.
- Visit Coinbase Pro and login.
- Click the Trade tab.
- Click Deposit.
- Select your fiat currency type.
- Connect your payment method.
- Top up your account.
You instantly lowered the transaction fee from 1.49% to 0.50%. To buy Bitcoin:
- Go to the Bitcoin market.
- Make sure Buy is active.
- Select Market.
- Enter the amount you want to invest.
- Hit Place buy order.
Cheaper withdraw fees
It would be wise to transfer your coins on Coinbase to Coinbase Pro if you want to transact them. Buying or withdrawing your funds on the Coinbase platform charges a network fee.
However, if you transfer them to Coinbase Pro, the price will be zero. You will only incur trading costs when you trade the cryptocurrency. Fortunately, the trading fees on Coinbase Pro are way lower than those on Coinbase.
Use Bank Transfers
To understand why bank transfers are cheaper, let’s analyze the two.
Credit And Debit Cards
In the way of example, consider buying Bitcoin on the Coinbase platform using a debit card or credit card. The purchase fees will be at least 3.99% of the value you are buying. The cost is fixed whether you are in Australia, Canada, the USA, Singapore, the United Kingdom, and even Europe.
However, a trick works for that crypto trader who is not in a hurry to have the purchase completed, but can wait for a few days to complete the transaction. The trick is in using a bank transfer method in stead of the card method. Though it may not be instant, it’s worth the wait.
In the UK and Europe, the maximum charge for a bank transfer is € 0.15. In the United States, the cost is 1.49%, even though all transactions attract a 4% base rate. However, using bank transfer would still be way cheaper than using a debit or credit card.
However, when using Coinbase, there are additional charges based on the amount being bought or sold on top of the transaction method’s cost. First, there is a 0.5% spread fee for both purchases and sales, which may rise or fall in response to market changes on Coinbase Pro.
On top of the spread fee, there are flat fees that range from 0.99 to 2.99 for these four currencies; $ (US dollar), £ (GBP), € (Euro), and $ (Canadian dollar). If we express them in percentage, the charges will range from approximately 1% to 3% depending on the amount you’re going to invest. The amount traded determines the rate applicable.
As long as you are on the Coinbase platform, both methods will be expensive. The only difference is that the bank method will be relatively cheaper.
The difference in transaction fees between the two platforms, Coinbase and Coinbase Pro, may baffle many. However, the reason is that the latter is a crypto exchange, whereas the former is a broker. That explains the higher fees of Coinbase relative to Coinbase Pro.
Despite its favorably low fees, Coinbase Pro boasts a wide variety of cryptocurrency trading pairs and supports major fiat currencies. Its smooth order process takes a short time.
The bright side is that money transfers to Coinbase Pro from its parent platform Coinbase are not chargeable. Additionally, the amounts of transfers are unlimited. You only need your Coinbase login to log in to your Coinbase Pro account.