Choosing a bank account can be an overwhelming task. Whether you’re looking for your first one, or simply want to see if you can get a better deal, you’ll be confronted with hundreds of options – many of which appear largely the same.
Then there are the fees – ATM fees, account-keeping fees, surcharge fees, transaction fees and so on. It’s hard to know what you should and shouldn’t be paying.
The good news is, bank account ATM fees are one fee that can often be avoided – either by shopping around for the right bank account or being savvy with the way you do your banking. Here are some pointers to help you.
What is an ATM fee?
Automated teller machines (ATMs) are either owned by a bank, interbank network or an independent provider – you can usually tell who owns it by the branding on the outside of the machine.
Often, the owner of the ATM will charge consumers a usage fee to withdraw money. The fee is sometimes imposed only to non-members of the bank who use the ATM. However, some banks charge all consumers withdrawal fees, regardless of who they bank with.
Not surprisingly, bank account ATM fees are quite controversial and many people oppose them due to the fact that ATMs are actually cheaper for banks to operate than human tellers.
What types of ATM fees are there?
There are two main types of ATM fees that are forwarded on to consumers:
- Surcharge fee: This fee is imposed by the financial institution or independent organisation that owns the ATM. It’s charged directly to the consumer using the machine for making a transaction.
- Foreign fee: This fee is enforced by the issuer of the bank account (usually the consumer’s chosen financial institution) when a consumer makes a withdrawal outside their network of machines – often internationally.
What is the average bank account ATM fee?
ATM withdrawal fees can vary from institution to institution. A typical fee is about $2.50. However, if it’s an independent or third-party ATM provider, the ATM fee can be $3 or $4. It’s unlikely that you’ll pay higher than $5 in Australia.
Which bank accounts offer no ATM fees?
Increasingly, financial institutions are offering bank accounts that waive ATM fees – surcharge, foreign or both.
However, you’ll be more likely to find ATM-fee-free bank accounts by choosing a smaller, more independent lender.
The key is to always do your research and make sure that you choose a bank account that suits your spending habits and lifestyle.
How do I avoid paying ATM fees?
There are a few ways to reduce your chances of paying ATM fees on bank account withdrawals:
- Choose partner ATMs or ones owned by your financial institution. Often, your bank account won’t charge you fees if you withdraw money from an ATM that’s owned by them or one of their partner banks. If you’re not sure whether your bank has fee-free ATMs (or where they are), most banks have an ATM locator tool on their website that allows you to quickly locate them.
- Shift your banking habits online. Mobile banking or internet banking not only helps you save time, but also money. Most financial institutions offer sophisticated online banking options or applications that allow you to check your balance, transfer money and pay bills without the reliance on cash.
- Be savvy when travelling overseas. There are global alliance ATMs around the world that allow you to make withdrawals without getting hit with a heavy ATM fee. Alternatively, speak to your financial institution about different options like travel cards.
- Scout out fee-free debit cards. Paying ATM fees isn’t always a given. Financial institutions are becoming increasingly competitive, meaning you can hunt around to find a bank account that waives fees altogether. Always make sure you check out the terms and conditions in detail before applying for a bank account (no matter how good it may seem).
Can I use my credit card for withdrawals to avoid bank account ATM fees?
While your credit card does allow you to withdraw from ATMs, it can come at a high cost. Credit card ATM withdrawals incur cash advance fees and interest rates. So, it’s a good idea to pay without cash where possible or stick to using your debit card for ATM withdrawals.
What changes have occurred to ATM fees on bank accounts?
Banks have been receiving increasing pressure to waive bank account ATM fees. In order to keep consumers happy and compete with fee-free bank accounts, all of the big four banks axed ATM fees in late 2017.