Since banks started to widely implement automated teller machines in the 1970s, they have undergone significant development. According to The World Bank, there are about 212 ATMs for every 100,000 persons in North America as of 2021.
ATMs now offer a lot more services than just cash withdrawals. You can pay bills, deposit checks or cash, move money across accounts, and check your account balance. A virtual card or a mobile banking app can even be used at some cardless ATMs.
There can be a few fees associated with using an ATM, though. The total fee will vary depending on the ATM you use and the bank you use. Here is an explanation of such fees.
What fees apply to bank ATMs?
A network of ATMs operated by the majority of banks and credit unions provides free access to your money. But there may be a charge if you leave the network, such as:
- ATM service charge. An operator fee, also referred to as a surcharge, is imposed by the owner of the ATM on users who are not regular customers. A different bank, a company unrelated to banking, or even a private investor searching for passive revenue could be the owner of an ATM.
- Out-of-network charges from your bank. The ATM owner may charge you for using an ATM outside of the network of your bank, but your bank may also impose fees. Some banks don’t impose out-of-network costs, while others pay ATM fees up to a certain amount charged by other banks.
- Foreign transaction charge. Customers who use ATMs when visiting foreign countries should be aware of additional charges. For withdrawals from ATMs processed outside of the United States, Bank of America, for instance, assesses a transaction fee of 3%. International transaction fees are lower at other financial institutions: While Fidelity customers using a debit card through a brokerage account pay a 1 percent foreign transaction fee, Connexus Credit Union charges up to a 1.5 percent transaction fee.
What fees do various banks impose?
Bankrate looked at account declarations from six different banking institutions to get a sample of how different ATM fees can be. Here is what we discovered:
- Typical bank ATM charges
- According to Bankrate’s 2022 bank account and ATM fee analysis, out-of-network ATM fees climbed by 1.5 percent over the previous year to an average of $4.66 per transaction. The total of two numbers equals the cost of using an ATM outside of a bank’s network, which is often $1.52, plus the typical ATM surcharge from the owner, which is typically $3.14.
Weekly ATM withdrawal charges from an out-of-network ATM would come to around $242 over the course of a year.
ATM service charges are rising. When Bankrate started keeping track of ATM fees in 1998, the average total fee was $1.97.
Avoiding ATM fees
While ATM fees may be annoying, there are a few easy ways to avoid them.
Greg McBride, CFA, chief financial analyst at Bankrate, explains that staying in network when it comes to ATM fees “pays like with health insurance.” “Paying two fees while leaving the network is common; one to your bank and one to the owner of the ATM. Another way to access cash for free or at a far reduced cost than the costly out-of-network ATM fees is to receive cash back when using your debit card at a store or drugstore.
Additionally, customers can avoid ATM fees by conducting a variety of transactions or account enquiries at a physical bank branch. Another way to conduct research and some tasks, such as check depositing, account transfers, and bill payment, without incurring ATM fees is through mobile banking.
Finally, customers should research different online banks to find one that has a sizable ATM network or reimburses some ATM expenses.
To sum up
There are still situations where paying with cash is required or preferable, even if cashless payment solutions are growing in popularity. You can avoid paying for cash withdrawals by becoming aware of the ATMs that don’t charge fees. Utilizing cash-back options when making purchases at stores pays off as well.