When trading stocks, many people make the mistake of focusing only on their return rate and ignoring fees. But these fees have a far greater impact on your final profit than you might think. If you organize and manage your stock trading fees properly, it can make a significant difference for long-term investing.

First, you need to understand what kinds of fees are charged when you buy and sell stocks. For trading domestic stocks in Korea, fees are made up of a combination of securities firm fees, exchange fees, and Korea Securities Depository fees. When trading overseas stocks—especially U.S. stocks—additional fees such as currency exchange fees, U.S. Securities and Exchange Commission fees, and FINRA fees are added on top of that. Domestic stock fees are usually around 0.1% to 0.15%, while overseas stock fees are typically much higher, at around 0.25%.

The key point is that each securities firm has a different fee structure. Even with the same trading amount, the fees can vary significantly depending on which platform you use. For example, if you trade through Kiwoom Securities’ HeroMuun4, your domestic stock fee may be as low as 0.015%, whereas other platforms may charge 0.15% or more. In addition, some securities firms add a fixed fee for trades below a certain amount, which can be quite burdensome for people who trade frequently with small amounts.

If you calculate the impact of fees on long-term returns in a concrete way, the results can be surprising. Suppose you trade with 1,000,000 won, 10 times in total, and earn a 10% profit each time. The difference between a 0.1% fee and a 0.2% fee may end up amounting to about 20,000 to 30,000 won. It might look insignificant at first, but as the number of trades increases and the investment amount grows, that gap multiplies exponentially. That’s due to the power of compound interest. And if there are also fixed fees, it gets even worse. For example, if there is a fixed fee of 1,500 won per trade, then over 100 trades, 150,000 won will be deducted as fixed fees.

To organize your stock trading fees properly, you need several strategies. First, you should choose a securities firm that fits the amount you usually trade and your trading style. If you do small amount, frequent day trades, you should find places with no fixed fees. If you trade large amounts at once, it’s more beneficial to use platforms with lower percentage-based fees. Second, take advantage of fee-waiver events for new customers. Most major securities firms are running promotions that waive overseas stock trading fees for 3 months to 1 year. Third, avoid unnecessary split trades. If you can execute a trade in one go, doing it once is cheaper than splitting it into multiple smaller trades.

When trading overseas stocks, currency exchange fees are also important. Currency exchange through a securities firm often offers worse exchange rates than banks or currency exchange platforms. It’s better to exchange in advance when the exchange rate is favorable, or check whether your securities firm offers preferential exchange-rate benefits.

The core of organizing stock trading fees is to accurately understand your trading patterns and then choose the securities firm and platform that match them. Even if you trade the same way, differences in fees can make your annual return vary by 1% to 2%. If you’re a long-term investor, you should pay even more attention to this, because small differences add up and eventually create a large gap in profits.