When you're managing your finances, it's wise to take measures to reduce extra fees to ensure you keep more of your hard-earned money.
Incurring additional charges can be quite inconvenient. One specific type of fee that can become costly is ATM fees, and a significant number of people frequently experience these charges.
The increasing ATM fees in 2023 are a cause for concern, as they have put a strain on consumers' finances. While there may be valid reasons for the rise in fees, it is important for banks and financial institutions to strike a balance between their profits and the financial well-being of their customers.
Consumers should be aware of the fees involved and explore fee-free alternatives whenever possible. They should also advocate for transparency and fair practices in the banking industry to protect their financial interests.
How Much Fees Banks Deduct?
The ATM fees in the United States are typically higher than in Asia-Pacific (APAC) countries. In the US, banks typically charge a non-network ATM fee of $2.00 to $3.00 which has increased to $4.73, a record high in the country and an ATM operator fee of $3.00 to $5.00. In addition, many banks also charge a foreign transaction fee of 1% to 3% of the total withdrawal amount.
In APAC countries like Singapore, ATM fees are generally lower. The average non-network ATM fee is $1.00, and the average ATM operator fee is $0.50. There is no foreign transaction fee in Singapore.
How to Avoid Bank ATM Fees?
There are situations where cash payments are unavoidable. In instances where you don't have cash on hand and come across a retailer that only accepts cash, you may need to use a nearby ATM. However, not all ATMs you encounter will be affiliated with your bank or considered part of your bank's network. It's crucial to be prepared for fees when using an ATM that's not in your network.
Typically, when you use an ATM that doesn't belong to your bank's network, you may face fees from both your bank and the ATM operator. These fees can vary but generally fall in the range of $2.50 to $3.00 per transaction, which is a common scenario.
As bank ATM fees can accumulate rapidly and potentially disrupt your monthly budget, here are some tips to help you reduce or eliminate these expenses.
1. Choose a bank with no ATM fees
Not all banks charge for using ATMs outside of their network. You can save money by choosing a bank that either doesn't charge ATM fees at all or has a checking account option with no fees.
2. Look for ATMs that are part of a shared network
There are a number of ATM networks that allow you to withdraw cash for free or for a reduced fee at participating ATMs. Some of the most popular networks include Allpoint, Cirrus, and Plus. You can find a list of ATMs in these networks on their websites.
3. Use a credit card instead of a debit card
Credit cards typically don't charge ATM fees, but they do charge interest on any money you borrow. If you are not able to pay off your credit card balance in full each month, then using a credit card to withdraw cash can be a costly mistake.
4. Check your bank's ATM fee policy
Some banks offer ATM fee reimbursements, which means they will refund you the ATM fees you incur. However, these reimbursements are often limited to a certain number of withdrawals each month or a certain dollar amount. It's important to read your bank's policy carefully to see if you qualify for ATM fee reimbursement.
5. Withdraw less often
Instead of withdrawing cash from an ATM every time you need it, try to withdraw a larger amount of money less frequently. This will help you avoid multiple ATM fees.
