Hailey Johnson
While ATMs remain a convenient way to access cash and manage everyday banking tasks, using one isn't always free. Depending on the ATM and your bank, you could face multiple charges, including fees from your bank and ATM surcharges from the machine's owner. These fees can quickly add up, especially if you are withdrawing cash from a machine outside of your bank's network. However, there are ways to avoid these fees, such as choosing a bank that reimburses ATM fees or using ATMs owned by your bank or within your bank's network.
| Characteristics | Values |
|---|---|
| ATM owned by your bank or within its partnered network | No out-of-network fees |
| ATM independently owned or operated by another bank | Your bank will likely charge an out-of-network fee and the ATM owner will add a surcharge |
| Online banks | Often partner with a large network like Allpoint or MoneyPass, providing free access to thousands of ATMs |
| Online banks | Lower overheads, hence lower fees |
| International ATMs | Currency conversion or exchange fees |
| International ATMs | Higher fees than domestic fees |
| Unaffiliated ATMs | Likely to encounter out-of-network fees, ATM surcharges, or international fees |
| Using a credit card to withdraw money | Considered a cash advance and will incur interest |
| Using a debit card to make purchases | Requesting cash back at a store is a way to avoid ATM fees |
| Using a debit card to make purchases | Many stores, especially larger chains, will allow you to request cash back during checkout |
| Using a debit card to make purchases | Stores generally do not charge a fee for providing cash back |
| Using a debit card to make purchases | Individual or smaller merchants may not accept credit cards |
| Using a debit card to make purchases | Digital payment methods and peer-to-peer payment apps like Venmo, PayPal or Zelle are available |
| Using an ATM | Banks may offer checking accounts that refund ATM fees |
| Using an ATM | Banks may offer checking accounts that waive a certain number of non-bank ATM cash withdrawal fees |
| Using an ATM | Banks may offer checking accounts that reimburse you for fees charged by another ATM owner |
| Using an ATM | Withdrawing more money at once can reduce ATM fees |
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What You'll Learn
Using an ATM outside your bank's network
To avoid these fees, it is recommended to use ATMs owned by your bank or financial institution. Most banks have a wide network of ATMs that allow you to deposit cash, transfer money, pay bills, and complete other basic banking tasks for free. When you use an ATM independently owned or operated by another bank, your bank may charge an out-of-network fee, and the ATM owner will likely add a surcharge.
To minimize withdrawal fees, use only your bank or credit union's ATMs to avoid surcharges and transaction fees. You can also ask your financial institution if they offer refunds or rebates on surcharge fees if you use an out-of-network ATM. Additionally, consider choosing a bank that reimburses ATM fees. Some banks offer checking accounts that refund ATM fees, so you won't be penalized when using an out-of-network ATM.
If you're travelling internationally, be sure to speak with your bank beforehand to understand the international fees you may be subject to and plan accordingly. International transaction fees can vary from 1% to 3% of the transaction amount, and ATM operators outside the United States may charge higher fees for currency conversion.
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ATM surcharges
An ATM surcharge is a fee charged by the owner of the ATM. If the ATM is owned by a bank or an independent owner, they may charge you a fee for using it. This fee can vary depending on your location. For example, if you're in a popular tourist destination, ATM surcharges may be higher.
When using an ATM that is not part of your bank's network, you may be charged fees by both your bank and the ATM owner. This is known as an out-of-network fee. According to Bankrate, the average total for out-of-network ATM fees in 2022 was $4.66 per transaction, including an average ATM surcharge of $3.14. These fees can add up, so it's important to be mindful of them.
To avoid ATM surcharges, it is recommended to use ATMs owned by your bank or within its partnered network. Most banks provide mobile apps or websites with ATM locators to help you find nearby fee-free machines. Online banks generally don't have their own ATM networks but often partner with large networks like Allpoint or MoneyPass, giving you free access to thousands of ATMs.
If you frequently use out-of-network ATMs, consider choosing a bank that offers ATM fee reimbursements or refunds. Some banks offer checking accounts that waive or reimburse ATM fees, allowing you to avoid penalties when using out-of-network ATMs. Additionally, you can get cash back at grocery stores or large retailers when paying with your debit card, which is usually provided without an additional fee.
By being mindful of ATM surcharges and utilizing alternative options, you can minimize the impact of these fees on your finances.
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International transaction fees
When travelling internationally, it is important to be mindful of these fees as they can add up quickly. Using your credit or debit card at an international ATM may result in multiple fees, including the international transaction fee, out-of-network fees, and ATM surcharges. To minimise these fees, it is recommended to use ATMs within your bank's network or partner networks. Additionally, some banks offer checking accounts that provide reimbursement for ATM fees incurred, which can be beneficial when travelling.
Before embarking on international travel, it is advisable to research and compare different credit cards to identify those that do not charge foreign transaction fees. By selecting a card without these fees, you can avoid unnecessary costs during your trip. It is also worth noting that some foreign merchants may offer dynamic currency conversion (DCC), allowing you to pay in your home currency. However, it is generally more cost-effective to pay in the local currency to avoid unfavourable exchange rates.
To make informed decisions, individuals should review the terms and conditions of their credit cards to understand the specific fees associated with international transactions. By being proactive and planning ahead, travellers can minimise international transaction fees and maximise the benefits of their financial choices while abroad.
In summary, international transaction fees are an important consideration when travelling or making purchases in foreign currencies. By understanding these fees and exploring options like no-fee cards, ATM reimbursement policies, and favourable exchange rates, individuals can make more cost-effective choices during their international endeavours.
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Choosing a bank that reimburses ATM fees
Banks with no ATM fees are hard to find, but they do exist. Many banks and credit unions are making it possible for customers to withdraw cash without paying fees. Some banks even reimburse out-of-network ATM fees, breaking out of the traditional banking model.
When choosing a bank that reimburses ATM fees, it is important to consider the following:
- Bank's ATM network: Most banks, even online banks, are partnered with a large network of ATMs. It is beneficial to choose a bank with a wide network of ATMs to ensure convenient access to fee-free transactions.
- Reimbursement policies: Different banks have varying policies on ATM fee reimbursements. Some banks offer unlimited reimbursements, while others provide a monthly cap. It is essential to understand the specific terms and conditions of the reimbursement policy.
- Account requirements: Some banks may require specific account types or direct deposit setups to be eligible for ATM fee reimbursements. It is important to review the requirements and ensure they align with your banking needs.
- International transactions: If you frequently travel or make international transactions, look for banks that do not charge foreign transaction fees or offer reimbursements for ATM fees incurred abroad.
- Other fees: While focusing on ATM fees is essential, it is also worth considering other fees associated with the account, such as overdraft fees, monthly maintenance fees, or account maintenance fees. Look for banks that eliminate or minimise these additional costs.
- Ally Bank: Offers access to 55,000 Allpoint ATMs worldwide without any fees. They also reimburse up to $10 in out-of-network ATM fees at the end of statement cycles.
- Axos Bank: Provides unlimited ATM fee reimbursements for its Essential Checking, Rewards Checking, and Cashback Checking accounts.
- Charles Schwab: Offers unlimited ATM fee rebates worldwide for its High Yield Investor Checking account. They also do not charge foreign transaction fees.
- LendingClub: Customers with a LevelUp Checking account receive unlimited ATM fee reimbursements deposited at the end of each statement cycle.
- Alliant Credit Union: Offers up to $20 per month in ATM fee rebates when using the Alliant Visa debit card, deposited into the checking account at the end of each day.
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Getting cash back in-store
When you need cash but don't have access to an ATM in your bank's network, getting cash back in-store is a convenient option. Many stores, especially grocery stores, offer cash back at the till without a fee. This means that when you pay for your items with a debit card, you can request a certain amount of cash back, which will be charged to your card, and then given to you in cash.
This option is often free, but some stores may charge a fee, especially for larger amounts of cash. For example, Kroger charges a 50-cent fee for cash back amounts of $100 or less, but this fee increases to $3.50 for amounts over $100. Dollar General charges $1.50 to $2.50 for cash back amounts up to $40, and Family Dollar charges $1.50 for cash back amounts up to $50. These fees are typically lower than ATM fees, and the advantage is that you can get cash back without having to make a separate trip to an ATM.
It's important to note that stores may have limits on the amount of cash back you can receive, typically ranging from $20 to $100, and some stores may not offer cash back at all. Additionally, not all cards may be accepted for cash back, so it's a good idea to check with the store beforehand.
To avoid ATM fees altogether, it's recommended to use ATMs owned by your bank or financial institution. You can also choose a bank that reimburses ATM fees or offers checking accounts with ATM fee rebates. Planning ahead and budgeting can also help reduce the number of times you need to use an ATM, allowing you to save on ATM fees.
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Frequently asked questions
Yes, bank ATMs often charge fees for withdrawing cash. These fees can be charged by your bank, the ATM provider, or both.
An out-of-network ATM is one that is not owned by your bank or financial institution. Withdrawing cash from these ATMs typically incurs additional charges, such as an out-of-network fee and an ATM surcharge.
ATM fees can vary depending on the bank and location. In the US, the average total for out-of-network ATM fees in 2022 was $4.66 per transaction. This includes both the out-of-network fee (around $1.52) and the ATM surcharge (approximately $3.14).
Here are some strategies to avoid ATM fees:
- Use ATMs owned by your bank or within their network.
- Choose a bank that reimburses ATM fees or offers checking accounts with no fees.
- Withdraw larger amounts less frequently to reduce the number of transactions and associated fees.
- Utilize digital payment methods and cash back opportunities to reduce the need for cash withdrawals.
Yes, ATM fees are common in other countries as well. For example, in Brazil, banks operate their own nationwide ATM networks, and customers can perform transactions without incurring fees at these locations. In Indonesia, banks generally do not charge a fee for ATM usage, but a service charge applies when using an ATM outside of your home network.
