Types of Broker Fees
There are several fees that brokers demand from investors who use their platform. These fees are categorized into trading and non-trading fees.
Trading fees are payments that investors make in exchange for trading services. Another name for trading fees is commission. As brokers help to facilitate trading activities related to buying and selling shares, commissions are their way of getting compensated for playing their part.
Every investment, from stocks to ETFs, can attract trading fees. Trading fees aren’t the same for all platforms as each broker decides what they charge and how they charge. Some could use flat fees that do not depend on the trade volume, while others charge for every trading activity. Also, some brokers charge commissions based on your investment volume.
Non-Trading fees are payments brokers require from investors for non-trade services such as using their platforms. Non-Trading fees include withdrawal, deposit, inactivity, and account opening fees.