Pinch in the pocketbook

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Australians wasted around $56 million accessing their own money at the ATM in December, simply by using automatic teller machines serviced by a bank that is not their own, according to RateCity calculations.

Around 40 percent of all ATM transactions made during the month were at 'foreign ATMs', with one-in-every-three dollars withdrawn from machines outside a customer's bank network, says the Reserve Bank.

Agreeing to a non-account holder surcharge of around $2 per transaction may seem minimal at the ATM. But consider the nation's annual bill for such convenience: customers racked up almost $660 million in 2011.

That's significantly less than three years ago prior to the introduction of direct charging (in March 2009), which made ATM pricing more transparent and flexible. At the time around half of all ATM transactions were foreign. Consumer behaviour has since shifted; Australians are relying less heavily on other banks' ATM networks and more heavily on EFTPOS cash withdrawals, RBA data shows.

Practical ways to reduce the bill

Australians are unnecessarily paying too much to access their money in transaction accounts, says Damian Smith, chief executive of RateCity.

"Accessing your own money from a transaction account should be free and all banks have a network of ATMs you can use that generally won't cost you anything for at least a certain number of transactions per month," he says.

The major banks have invested heavily in technology to make banking easier, cheaper and more accessible in recent years; for instance, iPhone and android apps allow customers to do everything from locate ATMs to transact all from the palm of the hand. These advances gave the big four banks a considerable 'edge' over smaller competitors. That was until recently; RediATM has since brought similar mobile technology to over 100 smaller institutions, building societies and credit unions using its network.

Smith's tips to avoid ATM fees:

  • Budget your monthly spend and withdraw money accordingly.
  • Make the most of digital and mobile banking technology.
  • Withdraw cash at the checkout using EFTPOS facilities, it's typically a cheaper option.
  • Don't be fooled into thinking fee-free transaction accounts waive ATM fees; 'direct charges' are imposed by the bank servicing the machine, rather than the customer's bank.
  • Switch banks and save; compare transaction accounts online for one that best suits your circumstances.
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