Transaction fee by Banks
In a Banking transaction, the transaction fee refers to the charge applied by the bank to your account. For instance, there was a time when banks used to charge some transaction fee when a customer used the ATM of a bank in which he doesn’t have an account. Some banks even charge its customers for writing too many cheques or making too many withdrawals. At the time of opening the account the customers are usually given list of such fees.
Markets
This kind of fees also refers to the trading expenses that the investor is charged for buying or selling stocks, Exchange Traded Funds (ETFs) or mutual funds. Transactionfee does not include brokers’ commission.
Real Estate
Transaction fee is also applicable while buying or selling real estate. Apart from the brokers’ commission, transaction fee includes government fees, appraisal fees, title search fees and so on.
This fee differs for different classes of asset. Being the most important determinant of the net return on securities, transaction fee is of prime importance to the investors. Higher the transaction cost, lower will be the return as the fee reduces the amount of accessible invest-able capital. Hence, it is advisable to select the investment options which have low transaction fee.
