Exchange is the first place a new investor needs to store his bitcoin in the beginning because it is from exchange that he will buy his bitcoin from and because he is new in bitcoin and have the money to start buying immediately, he will leave his coins in an exchange and gradually when his bitcoin size is increasing due to regular DCA purchases, he can learn on which wallet that he can use to keep his bitcoin safe. You should also know that since he is a new investor and getting started immediately is the best no matter how little the amount is, he needs to pile up his bitcoin in an exchange so that it can get up to $500 and above before he can send it to his self custody wallet that is best for him.
If not for high transactions fees I see no reason why you should buy and accumulate Bitcoin in an exchange because it can become vulnerable to hacks, we should know that exchanges is not the best place to store our Bitcoin no matter how little it is because the security of our Bitcoin should be taken at utmost priority. I know that $500 may not appear too big for you but to some people it is especially when they think of the amount in Fiat they used to buy such quantity of Bitcoin so there is no amount that is too small to lose but as for me, so far as I have long term hodling targets, i will prefer to move my Bitcoins to self custodial wallets immediately after making the purchase. Exchanges are risky to keep one's bitcoin and leave till you have accumulated enough, don't forget that there were previous cases of exchanges crashing and a lot of people that had assets in those exchanges lost everything so we ought to give our assets maximum protection which is to seek for self custody wallets even though the asset may be very little, it's better to lose part of your assets as transaction fees than lose everything to exchange platforms.
Your idea of wtihdrawing your Bitcoin from an exchange to a self custody wallets is not bad but your reasoning ability looks a bit childish because how can you buy a small unit of Bitcoin and then you immediately withdraw it from an exchange to a self custody wallet? Isn't that stressful like making withdrawals all the time and considering the fact that someone who is using the DCA strategy will need to be buying Bitcoin at regular intervals which means if we are to buy your idea then Everytime we DCA we also withdraw it from the exchange it was bought from and transfer to a non custody wallets. Accumulating upto $500 to $1000 in an exchange isn't that too risky even though the amount may appear risky for you to leave in an exchange but it also depends on the amount you DCA that will tell how long it will take you to accumulate up to $1000 before moving it out of the exchange wallet to a non custody wallets.
Okay just consider the transaction fees it will take each time you try to withdraw a small unit of Bitcoin from your exchange to a non custody wallets, so it looks unprofessional even if a newbie may not understand this but it is still important for them to know because those amount that would be lost as transaction fees can still be retained if you consider accumulating a larger amount before withdrawing out from an exchange.
Let's say your weekly DCA is $50 and you know that withdrawal fee will be needed you can make it $55 and use the $5 to cover the fee. Before you can accumulate up to $200, you will have $220 worth of bitcoin and when you are withdrawing your asset, the fees won't be much of a concern to you because you have already made provision for it. You can't take because of withdrawal fee and expose your asset to possible risk. If the exchange get hacked you will regret and would have preferred paying the withdrawal fees that would have been more lesser than losing your entire assets. Little fees shouldn't make us fall victim rather let's plan ourselves to accommodate the withdrawal fees from onset.
I don't think that it is a wise decision because you will end up spending carelessly on transaction fee that is not your priority because you feel that you have enough to waste. I will say that is a poor financial management system on accumulating bitcoin. Your priority should be buying and building your bitcoin investment in the best way that it will not affect your profit from your bitcoin investment in future.
You should also know that it is not everybody that can afford 5usd for only fee and some new investors might only have $10 or $20 as their discretionary income will you say that this new investor should not start his bitcoin journey because he cannot afford 10% for every bitcoin he purchases weekly because he should not keep his coins in an exchange temporarily. I don't think you are right, let's not see keeping our newly purchased bitcoin in an exchange for it to reach a good amount before transferring it from an exchange as a big problem if not it will become an unnecessary problem that might prevent new investors to get started immediately or it can also slower the rate at which will reach our bitcoin target.
Have you also considered future transaction fee when you want to transfer your bitcoin when the right time comes in future. Those your many small inputs will make all your sacrifice and consistent DCAing to achieve that amount of bitcoin you accumulated overtime a waste of time and resources because your transaction fee will be fucking high and can consume majority of your profit due to improper withdrawal plan in future. It is not just by buying and accumulating but also you consider the challenges in future of your investment so that you don't end up in regrets for investing in bitcoin.
Do you mean that if bitcoin blockchain is congested due to those garbage inject in the blockchain, you will still be able to be buying bitcoin weekly and transferring to your private wallet constantly, I doubt. Which makes your idea not cool for me to digest.