I Wasted Over $100 in Crypto Fees Last Year. Don't Make the Same Mistake

Here are four ways crypto investors can save money.

Many years ago, when I first opened my checking account, someone added an extra "R" to my name. It was only in one field that never appeared anywhere important -- I didn't even see the error until I first had internet banking. I always intended to get it fixed, but also didn't think it really mattered that much. Like many non-urgent semi-important jobs, I kept putting it off.

My inaction came back to bite me when I tried to deposit money using a bank transfer to my crypto accounts. Bank transfers are often free, and usually represent the cheapest route to move fiat (traditional) money into crypto. The trouble is that your name needs to match the name on the account exactly. That pesky extra R meant mine didn't, so my transfers were rejected.

As a result, I have been paying a 2% debit card fee every time I deposit money. Last year, I spent about $500 a month on crypto -- costing me about $10 each time. I wasted over $100 in fees just because I never got around to calling the bank and correcting the spelling of my name. That's before you consider trading fees, gas fees, and withdrawal fees. To keep your costs down when funding your crypto account, here are four ways to reduce your fees.

1. Deposit money via bank transfer where possible

I haven't found a single crypto platform that won't charge you to deposit money via credit or debit card. Some platforms charge around 2%; on others, it can be as much as 5%. In some cases, you may also pay an additional bank fee. Indeed, a number of banks treat credit card deposits as a cash advance, potentially charging an additional 3% to 5%. Cash advances also accrue interest immediately and may even come with a higher APR.

Worst case scenario? If you deposit $500 by credit card to a platform with high credit card fees and your bank charges significant additional fees, you could pay $50 in fees before you've bought any cryptocurrency at all. When there's a free way to reach the same end, bank transfers make a lot more sense.

2. Watch and compare rates on different platforms

Without naming any names, some crypto exchanges are sneaky. They might offer supposedly low- or no-fee trading, but then give you horrible rates of exchange. If you use the instant trade function on any platform, check exactly how much crypto you'll get for your money against a real time conversion tool.

For example, on one platform I tested, I tried buying $500 of Etherum (ETH). The price preview said I'd get 0.41237265 ETH. I compared this with the price on CoinMarketCap's currency calculator. Guess what? I'd only be getting $476 worth of ETH -- a significant difference. Don't be afraid to shop around to find better rates.

3. Use the advanced trading platforms

Many top crypto exchanges have separate trading platforms for pros and for beginners. The beginner option often takes the form of a simple window where you can convert from fiat currency into crypto, or from one crypto into another. It's super easy, but almost all of them charge much higher fees than the pro versions. If you do your research ahead of time and get to know the features of the platform, you should be able to use the pro version without issue.

4. Use native currencies to pay trading fees

Several crypto exchanges have their own native currencies, such as Binance's BNB Coin or FTX's FTT Token. If you pay fees using the native token, you'll often get a discount of 20% or more on your trading fees. Depending on the platform, you may be eligible for other benefits, too, such as increased staking rewards.

Bottom line

When you're rushing to get through your to-do list, sometimes $5 or $10 doesn't feel like a lot. But it all adds up and there's no point in throwing away money when you don't need to. I called the bank today and updated my details. I'm hoping the next time I try to deposit money on a crypto platform, I'll be able to use a bank transfer and do it for free.