Many people do not know how to avoid huge withdrawal/transactions fees while buying cryptocurrency with Fiat or moving the cryptocurrency between exchanges like coinbase, bittrex , binance, gdax and kucoin etc... In this article i will try to explain how to cut down on the high withdrawal fees and also try to keep it simple.
Tip 1 - Cut down on transaction fees in Coinbase
Coinbase is the one of the popular exchanges which allows users to buy Cryptocurrencies with your Fiat currency. So many people end up paying 1.5% on the transaction fees if they do a bank transfer and 4% for credit card. Trick here is to follow the steps provided below to avoid these huge fees. But before we proceed to the steps, you need to understand that Gdax is the official exchange of Coinbase, so if you have an account in coinbase then it means you already have a gdax account. Sometimes it may ask for additional verification to enable your gdax account. You need to have Coinbase and Gdax account to perform these tasks but if you do not have one then you can register using this link www.coinbase.com.
Below are the steps you need to follow to avoid high fees:
- Setup USD Wallet in Coinbase
- Deposit the money from your checking account to your USD Wallet ( Free )
- Go to www.gdax.com and go to your USD account and select deposit
- Choose USD wallet under coinbase account and enter the amount you want to transfer from coinbase to gdax ( Free )
- Select Deposit funds and your money will get transferred from Coinbase to Gdax
Buy your favourite cyptocurrency in the trade section by paying only 0.25% instead of 1.5%. Only drawback is that the UI of gdax is not so friendly :-)
Tip 2 - Cut down on withdrawal fees
Every cryptocurrency has its own block time and block fees which is also called as withdrawal fees. So it is important to understand the fees structure of these coins. I'm not going to go over all the coins to keep it simple but will cover the coins which is important and could save you some bucks.
Withdrawal rates listed above are the rates as of the time of writing this article. If you look at the above rates then you can clearly see that moving bitcoin from one wallet to other is very costly when compared to others:
- BTC fees = 9 times of LTC fees in USD
- BTC fees = 1770 times of DOGE fees in USD
So if you are going to move the cryptocurrency from Coinbase/Gdax to other exchanges then it makes sense to use LTC since you do not have the option to use DOGE. But if you are planning to move your cryptocurrency between any of the exchanges like Binance, Bittrex or Kucoin then i would suggest using DOGE since the fees are almost negligible compared to others.
If you have any suggestions/questions or feel that any of the information provided above is incorrect, please feel free to comment below.
