What does a 1% annual fee really cost you?
Estimate assumes a constant annual return and fee, compounded yearly. Actual results depend on market performance and your specific platform's fee structure.
Why a small fee has a big effect
A platform fee doesn't just take a slice of your balance once a year — it reduces the amount that compounds going forward, every single year. That's different from a one-off cost: the gap between the fee-free and fee-paying outcome doesn't grow at a steady pace, it accelerates the longer you hold the investment. That's why the same 1.5% fee looks trivial over 2 years and looks enormous over 20.
Where fees actually come from
Depending on the platform, this shows up as a management fee, an expense ratio on a fund, an account fee, or — for CFD and crypto trading in particular — a spread built into the buy/sell price rather than a stated annual percentage. See our investing guide for how to find and compare these across platforms, and our eToro vs Coinbase comparison for how this plays out specifically for buying crypto.
Frequently asked questions
Why does a 1% fee matter if my returns are much higher than that?
Because the fee compounds against you the same way your returns compound for you. A 1% annual fee doesn't just cost 1% of your balance once — it reduces the base that grows every single year, so the gap between the fee-free and fee-paying outcome widens the longer you hold the investment.
Does this calculator account for taxes?
No. This tool isolates the effect of a platform's ongoing fee on compounding — it doesn't model taxes, contribution schedules, or irregular returns, all of which will also affect your actual outcome.
Where do I find my platform's actual annual fee?
Look for terms like management fee, expense ratio, or account fee in your platform's pricing page. If your platform instead charges a spread on trades, that acts similarly to a fee but is usually expressed per trade rather than per year — see our investing guide for how to compare the two.