Inactivity fee
Family IV · Costs
Not to be confused with swap fee, currency conversion fee, deposit fee.
Inactivity fee is a recurring charge levied by a broker when a trading account remains dormant for a defined period, such as three, six, or twelve months. The fee is usually a fixed amount deducted from the account balance, and the dormancy criteria and fee amount vary by broker and jurisdiction. It is distinct from other maintenance costs because it is triggered solely by the absence of trading activity.
How inactivity fees work
Brokers define inactivity by the number of consecutive months without a trade, a login, or any account transaction. Once the dormant period elapses, the fee is charged periodically—monthly, quarterly, or annually—until activity resumes or the account is closed. The fee is typically deducted automatically from the account's cash balance. If the balance is insufficient, the broker may close the account or allow a negative balance. Regulatory treatment of inactivity fees varies: some jurisdictions require clear disclosure, while others restrict or prohibit them.
Worked example
Distinguishing from other fees
An inactivity fee is not a swap fee, which is charged for holding leveraged positions overnight. It is also not a currency conversion fee, which applies when converting one currency to another. Nor is it a deposit fee, which is charged for adding funds to an account. The inactivity fee is unique in that it is triggered by the absence of trading activity, not by a specific transaction.
Often confused with
- swap fee
- A swap fee is charged for holding a leveraged position overnight, whereas an inactivity fee is charged for not trading at all; the visible sign is whether the charge appears on an open position or on a dormant account.
- currency conversion fee
- A currency conversion fee applies when converting one currency to another, while an inactivity fee applies when no trading occurs; the visible sign is whether the charge is tied to a currency exchange or to a period of no activity.
- deposit fee
- A deposit fee is charged for adding funds to an account, whereas an inactivity fee is charged for leaving an account unused; the visible sign is whether the charge appears on a deposit transaction or on a dormant account statement.