Aussies waste $670m using the wrong ATMs

Aussies waste $670m using the wrong ATMs

Consumers who use ATMs not owned by their own bank paid almost $670 million in mostly unnecessary fees last year, research shows.

The fees, known as foreign ATM fees, are those charged by the ATM operator when a consumer uses a machine serviced by a bank other than their own institution, or not in a network agreement with their bank. The fees are $2 on average per transaction.

RateCity found that despite the charges, the number of transactions made at foreign ATMs was increasing with consumers spending around $10 million more in 2012 compared to 2011 and $30 million more than in 2010.

Michelle Hutchison, spokeswoman for RateCity, said that for most Australians the foreign ATM fee is largely avoidable.

“We do need to take some responsibility for avoiding these fees. There’s simply no excuse in the major cities for using a foreign ATM. For example, downtown Sydney has over 1000 ATMs, representing most networks and institutions,” she said.

Hutchison said for people in some locations – such as outer suburbs and smaller regional centres – there might be minimal ATM access and no major supermarkets or cash-out Eftpos outlets.

She said the best ways to avoid these fees is planning and to avoid making lots of small transactions.

Legislative changes introduced in 2009 meant ATM customers had to be notified of the foreign ATM fee on the machine’s screen before the transaction was completed, and as a result the number of transactions at foreign ATMs plummeted.

“Legislation introduced to warn customers about fees at the ATM deterred us for a while, but convenience has outweighed cost and we’re getting back to our old ways and increasingly using foreign ATMs,” she said. 

“Currently, four in every 10 ATM transactions is made at a machine not owned by our bank’s network and as a result we wasted more than $53 million in January.”

So how can we keep driving these costs down?

The big contributor will likely be ongoing Eftpos growth, she said. Almost 335 million transactions occurred via foreign ATMs in 2012.

“If just 10 percent of these switched to using cash out via Eftpos, we’d spend around $67 million less per year on ATM fees.”

A large chunk of this money could be kept by consumers with more careful planning and budgeting, she said. Many financial institutions now offer free ATM locator applications for smartphones, while others offer free transactions with the major banks’ ATM networks. To find out more visit RateCity and compare transaction accounts or ask your provider about how to reduce ATM fees.

 “Let’s be clear $670 million is too much for Australians to be paying just to get cash we already own.”

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The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.

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You can close a bank account with pending transactions. But after the account is closed, any incoming transactions will be declined by your (old) bank.

The best way to ensure this doesn’t occur is to either wait to close your account until all pending transactions are complete, or contact the creditor and supply them with alternate bank details.

If you’re unsure whether you have any scheduled transactions, you can speak to a banking representative over the phone or via online support.

In most cases, your bank withholds the amount owing for pending transactions (such as online purchases).

Because the pending amount is deducted from your bank balance, you can close your bank account and the purchase will be honoured.

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If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

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You can cash a cheque without a bank account if you visit the bank that issued the cheque. For example, if somebody sends you a cheque from Bank X (as written on the cheque) and you visit Bank X, it’s likely that Bank X will let you cash the cheque – provided the person who wrote the cheque has enough money in their account. Bank X would probably charge you a fee for the service.

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The length of time it takes to open a bank account varies, depending on whether you want to open it online or in person.

Online

Most banks and credit unions have simple online applications that usually take no more than 10 minutes to fill out. It can be especially fast if you have your identification documents like your driver’s licence and passport handy. Sometimes you will instantly be approved and the bank account opened. However, depending on the financial institution, it may take a day or so to be processed and your account number issued. Your account information and ATM or debit card will then be mailed to you, which usually takes between five to 10 days.

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A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

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If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

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To avoid being stuck with a bank fee every time your account is overdrawn, you can apply for a personal overdraft. This will enable you to overdraw your account up to an approved amount.

A personal overdraft is connected to your CommBank Everyday Account, so you can enjoy easy access to extra funds once approved – anywhere from $100 up to $20,000.

Your overdraft funds can be accessed via your CommBank keycard or Debit MasterCard, or online through NetBank and the CommBank app.

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If your bank offers online services, you should be able to find your bank account number online by logging into your account on your bank’s website and checking your details there.

Keep in mind that each type of account you have with a bank comes with a unique account number. This means if you have a bank account as well as a savings account, for example, your bank account number and your savings account number will be different.

If you don’t have access to your bank account online or can’t login, you should be able to find your account number on a mailed bank statement, if you have one.

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Transfers can be also made via internet banking and phone banking.

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How do I open a bank account for a child?

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A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

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