Do you use an automatic teller machine (ATM) regularly? If so, ATM fees could be taking a big bite out of your checking account – and that just isn’t necessary. Using this post, we’re going to outline which institutions offer the best banks for ATMs.
Fun fact: 2019 is the 50th anniversary of the ATM. For people who have switched to cashless payments, then ATMs probably don’t matter as much. However, for other consumers, ATMs are still a regular tool to reach their bank accounts. The problem is that ATM fees reached a new high in 2019 also.
Avoiding those fees does not mean kicking the ATM habit. It just means making the right choices about which machines you use.
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What Are the Options for Free ATMs?
Lucky for you, you have a variety of options. A lot of banks offer free ATM access, as long as you use the right machines. Others may even reimburse their customers for any ATM fees accrued.
There are three options for how to get around ATM fees:
- Choose a bank with an extensive branch network
- Choose a bank that is part of a major ATM network
- Choose a bank account that reimburses ATM fees
Any of these options gives you almost unlimited access to your money. This article looks at each of those options for avoiding ATM fees, so you can make a choice that saves you money without costing you any convenience.
What’s At Stake: The Cost of ATM Fees
You might be wonder, how much do ATM fees really matter?
Well the answer is quite surprising. Although most banks offer free ATMs, this generally only extends to specific machines in their network. Free ATM access may depend on your using a machine operated by your bank or one that is part of a network to which your bank belongs.
Otherwise, using the wrong machine might cause you to pay twice each time you access your money.
First of all, if your financial institution doesn’t have a relationship with the operator of the machine you use, that operator will charge you a fee.
Second, your bank will likely charge you with an additional fee for using an out-of-network ATM.
As of August, 2019, studies have shown that the average fee ATM operators charged for non-customers who used their machines was $2.87. The average fee that banks will charge when a customer uses an out-of-network ATM was $1.74.
That totals $4.61 every time you use your ATM. If you’re one of those people who draws weekly spending money from an ATM, using the wrong machine could cost you nearly $240 a year.
Banks with Extensive Branch Networks
A great way to avoid using any out-of-network ATMs is to choose the bank with the largest network of ATMs. That’s where large financial institutions have an advantage.
There are four financial institutions in the United States which offer retail deposit accounts and have over $1 trillion in deposits. Here are profiles of the location distribution these mega-banks offer in terms of both ATMs and brick-and-mortar branches:
JP Morgan Chase
Total deposits: $1.6 trillion
Total U.S. branches: 5,037
Number of states with branches: 35
Number of ATMs: 18,623
Drawbacks: No free checking except for student accounts. Overdraft fees are higher than the industry average. Savings account rates are less than 1/40th of the industry average*.
Bank of America
Total deposits: $1.4 trillion
Total U.S. branches: 4,285
Number of states with branches: 37
Number of ATMs: 16,062
Drawbacks: No free checking, and overdraft fees are higher than the industry average. Savings account rates are less than 1/14th of the industry average*.
Total deposits: $1.3 trillion
Total U.S. branches: 5,503
Number of states with branches: 42
Number of ATMs: 12,800
Drawbacks: No free checking except for youth accounts. Overdraft fees are generally higher than the industry average. Savings account rates are less than 1/40th of the industry average*.
Total deposits: $1.07 trillion
Total U.S. branches: 711
Number of states with branches: 13
Number of ATMs: 3,200
Drawbacks: No free checking except for student accounts. Overdraft fees are higher than the industry average. Savings account rates are less than 1/10th of the industry average*.
Two things to notice about each of these mega-banks:
- Despite their size, none of them is in all 50 states
- All offer less favorable checking and savings account terms than most banks.
So, while going with a very large bank is one way to avoid ATM fees, it is not a perfect solution. Fortunately, there are other options.
Major ATM Networks
There are banks out there that won’t have a large number of physical branches, whether that be an online bank or your local bank. That’s where ATM networks come into play.
ATM networks have usage deals with other ATMs and banks around the nation. Banks can partner up with one or more of these networks to offer their customers a wider geographical reach. So, if you prefer to use an ATM, find out if your bank belongs to any of the following major ATM networks:
- Allpoint – This subsidiary of Cardtronics has a network of 55,000 ATMs located in the United States, Canada, Mexico, Australia and the United Kingdom.
- MoneyPass – This subsidiary of Fiserv offers a network of 32,000 ATMs located across the United States.
- NYCE – This ATM network is operated by banking and payments technology company FIS and has thousands of locations across the United States.
- Pulse – This ATM network is part of Discover, and offers half a million locations in the United States and over 2.1 million ATMs across 134 countries.
- STAR – This network is operated by First Data and has locations in all 50 states.
Generally, most ATMs that you see in your daily life will be marked to show which network they are a part of. This makes it easier to find free ATMs to use, as long as your bank belongs to that major network.
Banks that Reimburse ATM Fees
Online-only banks do not have physical branch networks on which to rely, and some pass on joining ATM networks in favor of reimbursing ATM fees.
Here’s a list of some of the largest online only deposit institutions and how they handle ATM-fee reimbursements:
- Charles Schwab Bank offers unlimited ATM fee reimbursements for cash withdrawals made using the Schwab Bank Visa Platinum Debit Card.
- Ally Bank offers free usage of any ATM in the Allpoint network, plus it will reimburse up to $10 per statement cycle for fees incurred at other ATMs.
- Capital One Bank will reimburse up to $15 per statement period for fees incurred at any ATM within the United States and for some ATMs outside the U.S.
- USAA Bank has a network of 60,000 ATMs which its customers can use for free, and it will also reimburse up to $15 in fees for use of out-of-network ATMs.
- Discover Bank offers free withdrawals from a network of 60,000 ATMs nationwide.
Although the banks listed above do not have any physical locations, they can still offer you the convenience of free access to your money at a wide variety of locations. However, be sure you check the online bank’s ATM policies before you sign up.
Strategies for Minimizing ATM Fees
Based on the above options for free ATM usage, here’s a summary of strategies for minimizing ATM fees:
- Join a bank who has branches or ATM networks that are right for you. What this means is, if you decide to move out of your current home or tend to travel to specific cities and countries, make sure your bank has a network there for you to use. This way, you don’t get any ATM fees.
- Use a bank that reimburses ATM charges. Large ATM networks are a big help in avoiding ATM fees, but ultimately a bank that reimburses ATM charges even from out-of-network machines might offer the greatest freedom of choice.
- Slowly transition to cashless payments. Society is increasingly transitioning to cashless payments. Simply using your debit card or other form of electronic payment can save you the worry about where to find free ATMs.
- Plan before you travel. The most expensive ATM fees are often in areas like airports and hotels that cater to tourists. You also may have more trouble finding an in-network ATM when you are in an unfamiliar location. So, it may pay to stock up on cash before you leave for your trip.
- Look for the label. When using an unfamiliar ATM, don’t just blindly assume it is in your bank’s network. Before you put your debit card in a machine, check whether it displays the name of an ATM network to which your bank belongs.
- Use an ATM locator app. Many banks and ATM networks now have mobile apps that will help you locate ATMs you can use for free. This kind of app can help you avoid ATM fees no matter where you happen to be.
The strategies and tips we have listed can help you a lot if you’re trying to minimize the amount of ATM fees you’re racking up and they aren’t too hard to follow. Doing this will not only save you some money but it will also make you smarter financially. For more posts like this, check out our list of bank guides!