You might have heard of eToro and wondered if it’s free and if there are any hidden fees! We all like to make money and not feel cheated. Hidden fees are the worst right?
eToro is free to get an account and there are fees for trading, overnight and weekend fees, withdrawal fees, fees for converting currencies and if your account is inactive you get charged a fee.
Keep reading and I’ll share what these fees are and the pros and cons of using eToro. Lastly, I’ll share 6 tips on reducing these fees.
How eToro Earns it’s Money!
eToro is something called a fintech company and this means there is NO physical building, but just a website. Another famous fintech company is Paypal.
eToro still has to earn money and it does this through fees. Since ALL the money they earn is through fees, they make signing up FREE and as easy as possible.
The more people who sign up, the MORE money they make through fees. This is why they’re giving away $50 of Bitcoin if you signed up and purchased $1,000 in crypto.
The first fee eToro charges is with its spread! The spread is when someone buys and sells on the platform. It would be simple if it was a FLAT amount, but it’s variable and can be affected by market conditions.
You can see the spread fee for any crypto you want to trade, it starts at around 0.75% for Bitcoin.
The next fee is the overnight fee. This fee happens whenever you maintain an open position from 1 trading day to the next. This fee ONLY applies to CFD (Contract for Difference) assets.
The time of this overnight Fee is 5:00 PM New York Time! If you have an open position you will be charged a fee. You can see the fee at the bottom when making a trade.
Oh, and they can change these fees at any time. Plus, if you hold an open position over the weekend you will be charged a fee.
The website does say depositing money is free, but that NOT completely true. If you deposit US Dollars it’s free, but anything else and you NEED to convert it over to the US Dollar.
It’s really a currency converter fee and the fee depends on the currency you convert over.
Here is an example of this fee (it’s $50 dollars).
Next, there is a withdrawal fee and if you want to take your money out, you will get charged $5 per withdrawal.
There is also an inactivity fee and this is $10 a month after 1 year of your account being inactive. This is a tricky one and could say hidden.
What is eToro?
eToro is a platform for trading. You’re speculating on if the stock or crypto will go up! eToro purchases the asset on your behalf and holds it under your name.
You can transfer crypto out of eToro if you wish. eToro does NOT charge a fee to transfer crypto to another wallet. There is a fee for using the crypto network.
When it comes to stocks you “can’t” transfer them, you can only buy and sell a stock.
What makes eToro different than any other platform is you you can copy a trader. This means if you know of someone who is very successful, you can piggyback on their success.
They even have a score that you can look at.
You might be wondering why would a trader want to be copied? Each time a trader is copied they get paid!
There is a social part of the program, and you can meet other people (Basically, they want you to make friends and NOT leave the platform.)
eToro also has many different assets on the platform that you can trade, there is crypto, stocks, EFTS, and Forex.
Pros and Cons to eToro!
One of the things I like about eToro is It’s not just crypto, but you can purchase a wide variety of assets including stocks and commodities.
Also, the interface is neat, clean and there is a lot of information on who is buying an asset. Even Warren Buffet was a big fan of riding someone’s coattails. (It depends on who’s coattails your riding).
In the end – I hope you “don’t listen to anyone” do your own research and go with your gut feeling.
One of the things I “don’t” like about the platform is the “Fees.” The fees are a little on the hidden side and this is why I’m making this blog post.
The second thing I’m not sure I like is the social part of the program. You can easily get caught up with overthinking an investment.
If you ask the community what they think of an asset, you may get talked out of a good investment!
How to Reduce Your Fees on eToro!
The first way to reduce your fees on eToro is when you deposit money. Sure, if you deposit USD it’s free, but anything else you have to convert it to USD, and this costs money.
You may want to consider a way to convert the currency before making a deposit. One way currency converter you can check out is Paypal.
You can see the currency converter fee on both platforms and choose the platform with the smallest fee.
The second way you can reduce your fees is when you withdrawal money. The minimum amount you can withdraw is $30 and you get charged $5 per withdrawal.
How to reduce your fees with withdrawals is to make 1 LARGE withdrawal instead of many small ones.
The third way to reduce fees is with the spread fees. Etoro earns money EVERY time you make a trade. This is why they make it easy for you to copy other traders.
Every time this trader makes a trade you will pay a fee and eToro earns money. Be “very” careful when copying a trader and maybe even NOT copy another person.
The fourth way you can save money is with CFD’s (contract for difference). There are fees for weekends and overnights if you have an open order. You could NOT trade CFD’s to save on these fees.
Another idea is to NOT have an open order when the time is 5:00 PM New York or if it’s on the weekend.
The last way to save money on fees is by joining a club. For example, you could join the diamond club and NOT pay any fees when withdrawing money.
Oh, and I can’t forget about the inactive account fee. If you don’t log in to your account with 12 months you get charged a fee. You could make it a habit to log in once a month.
I try to log in to ALL my accounts at least once a month to see how I’m doing. There is a story of someone who purchased Amazon stock and never logged into his account to check on it.
After 20 Years, the state he lived in seized the stock and sold it, this is due to (unclaimed property). He lost “a lot” of money. You can view more this story by clicking on the link HERE.
I hope this blog post on is eToro really free was helpful to you. Bye for now.