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eToro Fees: What You Need to Know
Cryptocurrency has been gaining traction in the financial world for the past few years. With cryptocurrency becoming increasingly popular, several platforms have emerged to provide services related to trading and investing in cryptocurrency. Among the most popular services and cryptocurrency exchanges in the world include Binance, Kraken, and eToro. Out of all these options, eToro has emerged as one of the most transparent and low-cost options for trading.
If you are planning to trade using eToro, this guide is for you. This article covers everything there is to know about the eToro cryptocurrency exchange, along with its services and fee structure.
What Is eToro?
Before we talk about eToro’s fee structure, let’s take a brief look at the service itself. eToro is a popular cryptocurrency exchange, trusted and well-loved by crypto enthusiasts and investors across the world. It provides its users with a wide range of tools and financial instruments, from stocks to currency pairs to CFDs to cryptocurrency. (Note: eToro is currently only available in the U.S. for cryptocurrency trading in most states as well as stocks trading on a beta invite-only basis.)
They also have a well-rounded system for copy training, where novice traders can copy trade moves used and performed by professional traders in the stock market.
It is important to note that eToro does not levy any fee on U.S. stocks or ETFs, nor do they have any hidden commissions or limitations. While eToro does not charge fees for opening an account or account management, they have other miscellaneous fee structures in their ecosystem. Read on to understand more about these fees.
eToro Spread Fee
The spread is one of the few fees levied by eToro. Each financial instrument has a buying and selling price, and the difference between the two is known as the spread. Investors are required to pay the spread when they make a new trade.
When investors make a new trade, they will notice a loss in the position due to the spread phenomenon. Spreads are variable due to the volatility of the market. Some instruments are more dynamic than others and have higher spreads than other more stable currencies and financial instruments.
The final calculation of the spread includes the commission charged by eToro along with recommendations made by the best financial advisors in the market.
eToro Deposit Fee
eToro does not charge its customers a deposit fee. That means when customers decide to deposit money or invest using eToro, the service will not charge them for it.
eToro Overnight Fee
The overnight or CFD fee refers to a payment made if the investor holds a CFD position overnight. This is an industry standard used across cryptocurrency exchanges. eToro charges this fee only on CFD positions and not on any non-leveraged BUY positions for ETFs, stocks, or crypto-assets.
The overnight fee depends on the amount and size of the trade and whether it is a buy or sell trade. In some instances, investors can get their money back as well. Overnight fees are only billed for the working days of the week, which means it is not billed on Saturday and Sunday.
The Weekend Fee
eToro does levy a weekend fee, where the regular payment is multiplied by three. This is applied to positions, currencies, and commodities on the platform held on Wednesday. It is applicable for indices, ETFs, and natural gas assets held on Friday. Therefore, the weekend fee is charged on Wednesday or Friday.
eToro Withdrawal Fee
According to the eToro website, they charge a low fixed fee for withdrawals to cover expenses related to international money transfers. Their minimum withdrawal amount is $30.
They also have a fixed $5 fee for each withdrawal request. Therefore, it is best to make all your withdrawals in one go instead of making smaller withdrawal requests.
The inactivity fee is levied when the investor does not log into their account for over a year. A monthly $10 inactivity fee is charged in such cases from the remaining balance. The fee is charged only when there is money in the account. No remaining positions are disturbed to reclaim the fee. As soon as the user logs in, the inactivity fee stops.
Overall, the fee system offered by eToro is transparent and easy to understand. In comparison to other cryptocurrency exchanges, eToro offers its services at a meager price.
How Does eToro Calculate Its Fees?
While eToro does not charge extra in hidden commissions, they do have a structure that calculates their fees. Here is how eToro calculates its fees:
Spread * price in USD * number of units acquired
Overnight fees (per night):
Fee * amount of units
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Overall, eToro is a good platform for those interested in investing in cryptocurrency. With no additional fees attached to primary banking functions, eToro is an excellent platform for people new to cryptocurrency.