In this guide
Binance is a popular cryptocurrency exchange. With over $100 Billion in daily trading volume, it is undoubtedly one of the largest crypto exchanges as of 2021.
The exchange is considered one of the cheapest platforms to buy and sell Bitcoin. Across its products, Binance consistently offers lower costs of doing business, and this is advantageous not just to the platform but most importantly to its users.
In this guide, we are focusing on the Binance fees. We will consider the fees charged when using Binance’s most popular products so you can know and understand what to expect from the platform when it comes to costs. To know more about the exchange, be sure to read our in-depth Binance review.
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Introduction to Binance fees
Binance exchange was launched in 2017 by Changpeng Zhao, and to encourage usage, it offered a 50% discount to its customers that opted to use Binance Coin (BNB) to pay for trading fees. BNB is the native Binance exchange’s cryptocurrency used during the token sale to raise funds for developing and launching it.
According to the company’s white paper, Binance offers a tiered discount rate scheduled to be halved every year. In the first year of operation, the rate stood at 50%, then 25% the second year, 12.5% the third year, and 6.75% the fourth year. Binance would cease to offer any discount to its users starting in the fifth year onwards, even those that use BNB to pay for trading fees.
It is worth noting that Binance has offered to maintain its 25% discount that was only applicable in its second year. All users trading assets on the platform get to enjoy this reduced rate given that they opt to pay for their trading activities using BNB.
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Watch the video: Here’s a simple video we have crafted to make it even more explanatory
Binance fees
Trading fees
Binance considers a few factors when determining the fees to be paid by each of their customers for every trade. These include prior 30-day trading volume, BNB holdings, and whether or not they are makers or takers.
The previous 30-day trading volume is used to group each customer into 10-level tiers titled VIP-0 through VIP-9. The higher your trading volume, the higher you will be placed in the tiered fee schedule, which will qualify you for lower rates. Additionally, the more you hold in BNB, the higher your VIP tier you will be placed.
Finally, through the maker/taker model, Binance determines how much to pay in each particular tier. Makers are traders that create trades to be filled at a later, more convenient price point. They bring liquidity to the marketplace. They, therefore, are rewarded with lower fees.
On the other hand, takers place orders that are filled immediately at the prevailing market price. They effectively ‘take’ liquidity out of the marketplace. They are typically charged more for their trades.
To put it simply, every new trader on Binance will be charged 0.1% per spot trade.
Here’s a complete rundown of all the fees charged to each tier as of 2021:
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Deposit & Withdrawal fees
Binance offers a multitude of deposit and withdrawal methods. Their availability to a particular Binance user depends on their geographical location. However, generally, Binance has one of the most conclusive lists of supported payment methods.
All deposits into Binance are free for both fiat currencies and cryptocurrency assets. Not to be confused, though, as various networks charge transaction fees for facilitating a transfer. For instance, if you are depositing Bitcoin (BTC) into your Binance account, Bitcoin miners charge a transaction fee for using the network.
Similarly, fiat transfers will cost you a transaction fee depending on the payment method used. Credit cards will typically be the most expensive compared to other available methods such as bank transfers, SEPA, [temporarily suspended EUR deposits via SEPA bank transfers since July 7, 2021] and SWIFT transfers, among others. But Binance will not charge any additional fees on top of this network or payment processing fees.
The exchange, however, charges a fee for withdrawal transactions. These are any transfers out of your Binance account. They are dependent on the asset being transferred and the asset’s network.
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Margin borrow interest rate
Trading on margin or margin trading is the practice of borrowing funds from a platform to open larger positions than your available assets. This way, the trader can leverage their margin to make outsized gains (or losses) depending on the amount of leverage.
Binance allows its users to trade on margins and borrow from funds from the exchange. In return, the borrowers pay interest on the borrowed funds. Interest rates vary from asset to asset, and the interest is charged based on the amount of time (in hours) the loan remains unpaid.
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Futures trading rate
Binance maintains a futures trading platform that is integrated seamlessly with the spot trading platform. Spot trading involves trades settled in real-time at the market price (i.e., on the spot.) On the other hand, Futures are agreements between traders to settle a trade at a later time at a predetermined price.
Binance offers Futures that expire either quarterly or never expire. The latter is often referred to as perpetual Futures. Additionally, these futures can be traded using leverage to a factor of 125x the margin.
The fees for trading Futures on Binance are guided by the Maker/Taker model discussed in the Trading fees section. This means that Makers get better rates compared to Takers.
The rates are also affected by the trader’s prior 30-day trading volume grouped into VIP tiers ranging from VIP0 to VIP9. The higher your trading volume, the less you will pay in fees.
Binance offers an additional 10% discount on Futures trading fees paid using BNB.
Final thoughts
It’s hard to argue against Binance’s selling proposition, which includes a comprehensive suite of products and services and the platform’s low cost. It is quite cheap, convenient, and secure.
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Best Crypto Exchange for Intermediate Traders and Investors
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Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.
-
0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
