Revolut Fees for Buying Crypto: What You Need to Know

Is Revolut the cheapest option for buying crypto? It's a question many users ask when considering using the popular fintech platform to invest in digital currencies. Spoiler alert: it’s not as straightforward as you might think. In this deep dive, we’ll unravel the complex fee structure Revolut employs for cryptocurrency transactions, offering insights into what you’re really paying when you purchase Bitcoin, Ethereum, or other digital assets through the app.

Revolut has revolutionized the way people interact with money, offering seamless currency exchanges, international transfers, and now, cryptocurrency trading. However, with convenience comes cost, and understanding these costs is crucial for any investor.

Understanding Revolut’s Crypto Fee Structure

To understand how Revolut charges you for buying crypto, we need to break down the fees into different components:

1. Spread Fees: This is the most significant cost you’ll incur when buying cryptocurrency through Revolut. A spread is the difference between the buy and sell price of a cryptocurrency. Revolut charges a variable spread fee, which can range from 1.5% to 3% depending on market conditions and your account level (Standard, Premium, or Metal). The spread fee is how Revolut makes a profit on each transaction.

2. Markup on Exchange Rates: Revolut claims to offer real-time exchange rates, but there’s often a small markup added to the rates when you’re dealing with less common cryptocurrencies. This can add an additional layer of cost that’s not immediately obvious to users.

3. Subscription Plan Fees: If you’re a Premium or Metal user, you might enjoy reduced fees, but these come at the cost of a monthly or annual subscription. Standard users pay the highest fees, while Metal users get the best rates, often around 1.5% spread on trades.

4. Withdrawal and Transfer Fees: Unlike dedicated crypto exchanges, Revolut doesn’t allow you to transfer your crypto to external wallets. You can only buy, sell, or exchange crypto within the app. This limits your control over your assets and can lead to higher costs if you plan to move your crypto around.

5. Inactivity Fees: While not directly related to crypto purchases, it’s worth noting that Revolut charges fees if your account remains inactive for too long. This can eat into your profits if you’re not actively trading.

Comparing Revolut to Other Platforms

When it comes to buying crypto, fees can significantly impact your overall investment returns. Let’s compare Revolut’s fees with those of other popular platforms:

• Coinbase: Coinbase is one of the most popular cryptocurrency exchanges, known for its user-friendly interface. However, it charges a spread fee of about 0.5% and an additional transaction fee that ranges from $0.99 to $2.99 depending on the transaction size. While Coinbase’s fees are generally lower than Revolut’s, they can still add up for frequent traders.

• Binance: Binance is known for its low trading fees, which start at just 0.1%. If you hold Binance Coin (BNB), you can reduce your fees even further. Binance’s fees are significantly lower than Revolut’s, making it a better option for high-volume traders.

• Kraken: Kraken offers competitive fees starting at 0.26% for market orders. However, like Revolut, Kraken has higher fees for smaller transactions, which can make it less appealing for casual investors.

So, is Revolut worth it for crypto? If you’re a casual investor looking for convenience and already using Revolut for other financial services, it might be. However, if you’re serious about crypto trading and want to minimize fees, other platforms like Binance or Kraken might be better options.

Hidden Costs and Considerations

When evaluating Revolut’s fees, it’s important to consider the hidden costs that might not be immediately apparent:

• Price Fluctuations: Cryptocurrency prices are notoriously volatile. The time it takes to execute a transaction can lead to price fluctuations that impact the final amount of crypto you receive. Revolut’s spread fee is designed to mitigate this risk, but it also means you might not get the best possible price.

• Lack of Ownership: When you buy crypto on Revolut, you don’t actually own the underlying asset. You’re essentially buying a derivative, which means you can’t transfer your crypto to an external wallet or use it for transactions outside the Revolut ecosystem. This limits your flexibility and could lead to additional costs if you decide to sell and move your assets elsewhere.

• Regulatory Risks: Revolut operates under different regulatory frameworks depending on the country you’re in. This can lead to varying fees and limitations on what you can do with your crypto. For example, some countries might impose additional taxes on crypto transactions, further increasing your costs.

Maximizing Your Returns

If you decide to use Revolut for buying crypto, here are some tips to minimize your costs:

1. Choose the Right Plan: If you’re a frequent trader, upgrading to a Premium or Metal plan could save you money in the long run, even with the monthly subscription fee. Calculate how much you’re likely to trade each month and compare the savings with the subscription cost.

2. Timing Your Trades: Crypto markets are open 24/7, but there are times when liquidity is higher, and spreads are lower. Trading during these times can help you get a better deal.

3. Use Limit Orders: Revolut allows you to set limit orders, which means you can specify the price at which you want to buy or sell. This can help you avoid paying higher spreads during periods of volatility.

4. Stay Informed: Cryptocurrency markets move quickly, and staying informed about market conditions can help you make better trading decisions. Revolut offers news and insights within the app, but it’s also worth following external sources for a broader perspective.

5. Consider Alternatives: If you’re planning to make large or frequent trades, consider using a dedicated crypto exchange like Binance or Kraken. These platforms offer lower fees and more control over your assets, which can lead to better long-term returns.

Conclusion: Is Revolut the Right Choice for You?

Revolut offers a convenient way to buy and sell cryptocurrency, especially for users who are already integrated into its ecosystem. However, this convenience comes at a cost. With spread fees ranging from 1.5% to 3%, plus potential markups on exchange rates and subscription fees, Revolut is not the cheapest option on the market.

For casual investors or those looking for a simple, all-in-one financial solution, Revolut might still be a good fit. But for more serious crypto enthusiasts, the higher fees and lack of asset ownership could be significant drawbacks.

Ultimately, the choice comes down to your trading habits and financial goals. If minimizing fees and maximizing control over your assets are top priorities, exploring other platforms may be worthwhile. But if you value convenience and are already a Revolut user, the platform’s seamless integration with your existing finances might justify the higher costs.