Most checking accounts come with free debit cards. These cards allow you to make purchases and withdraw money from ATMs. These ATMs ("Automatic Teller Machines") allow you to check your balance, withdraw and deposit money, and transfer money between your accounts.
For every bank customer or credit union member, there are three types of ATMs that can be used:
1. ATMs that belong to your financial institution
These are ATMs owned and operated by your bank or credit union. Most are in or outside a branch and some are in particular store chains or in areas with no branches close by. Almost all banks and credit unions offer unlimited withdrawals from their own ATMs with no fee to you.
2. Affiliated ATMs (ATM Networks and Shared Services)
These are ATMs offered by ATM networks or other financial institutions in partnership with your bank or credit union. These partnerships allow small banks and credit unions to compete with larger, national financial institutions by giving their customers/members wider accessibility to their money for little or no fee.
ATM Networks like AllPoint or Star have ATMs around the country. If your bank or credit union partners with an ATM Network, all or most of your withdrawals from these ATMs each month are free. Many ATM Networks offer websites and smart phone apps to help you find the closest ATM. In fact, one of these ATMs might be closer to your home or workplace than a big bank's ATM!
Some banks and many credit unions offer you access to affiliated ATMs through shared services. The participating institutions form a ring of banks or credit unions, all of them allowing you to withdraw money from their ATMs with no fee, just like you would from your own institution'’s ATMs. Many of these offer 'shared branches'’ as well, allowing you to discuss your finances with a teller at any included institution. You can't do more complicated financial tasks like open a mortgage at another institution's branch, but in terms of basic services, it's like you are a member of all the institutions in the partnership.
3. Unaffiliated ATMs ("Foreign ATMs" or "non-bank ATMs")
These are ATMs that your financial institution does not own and shares no affiliation, including most ATMs in convenience stores and ATMs owned by other financial institutions. You may check your balance and withdraw money at these ATMs, but you cannot transfer money between your accounts. Most of the time, you are charged two fees for using these ATMs. Here's where the ATM fees become staggering...
The first fee is from your own bank or credit union. When you withdraw money from an ATM that's not affiliated with your institution, your bank or credit union pays the company that owns the ATM a small fee for the transaction. Often this charge is passed on to you in the form of a "non-bank ATM fee" or a "foreign ATM fee". This fee ranges from $0.50 to $3.50, but it's usually $1-$2. (You can find out the amount of this charge here on FindABetterBank or by asking your bank or credit union.) Keep in mind that some banks and credit unions waive this fee for particular checking accounts. (Read more about these accounts in the section "General ATM Terms for Specific Account Types" below.)
The second fee you may be charged is from the unaffiliated ATM itself. This fee usually goes to the maintenance of the ATM. Before you complete the withdrawal, the ATM will display how much it will charge you and ask you if you agree the amount. These fees are up to the ATM company and the store hosting the ATM, but the charge is usually between $1-$3 for each withdrawal.
These two fees added together might make an ATM withdrawal very costly. For example, say you withdraw $20 from an unaffiliated ATM. Your bank charges you $2.00 for the withdrawal and the ATM charges you $2.00. Now you've paid $4.00 for access to $20 if your money! That's 20% of the withdrawal! Unless you’re making a large withdrawal, it's often worth it to find an ATM from your institution or an affiliated ATM in your neighborhood.
Finally, an important clarification: When a bank or credit union offers you an account with a "no fee" ATM withdrawal policy, it doesn't mean you won't be charged for the withdrawal. It does mean that your bank or credit union will not charge a non-bank ATM fee, but the fee from the non-bank ATM itself will apply. Basically, "no fee ATM withdrawals" means "no fee...from us," but you're not granted immunity from all ATM fees.
Other ATM Fees
International Withdrawal Fees
When you withdraw money from an ATM in another country, your bank or credit union will charge you a "conversion fee." This fee also applies to debit card purchases. This fee is similar to what you'd pay at an airport currency exchange desk. Normal conversion rates run from 1% to 3% of the purchase.
Your bank or credit union might charge you a fee for checking your balance at an unaffiliated ATM. Even if you do not withdraw money, information is exchanged between your financial institution and the ATM, and this exchange costs your financial institutions money. Unfortunately, that cost of this exchange may be passed on to you. If you use ATMs to check your balance, you should ask whether your new bank or credit union charges you a fee for balance inquiries.
Other ATM Features
When depositing cash, some advanced ATMs don't require envelopes. These ATMs scan and validate the cash and credit it to your account immediately. So you don't need to worry whether or not you'll need that cash deposit later today.
Some banks and credit unions automatically credit your account when you make a cash or check deposit. Unless the deposit is scanned cash, this credit is based on trust -- they're trusting that you've deposited the amount you've indicated. The amount your bank credits to your account depends on your relationship with your financial institution. Factors your financial institution may take into account include how often you deposit money, how much money you normally have in your account, and how frequently the checks you deposit bounce. Banks and credit unions don't usually explain this complex algorithm, so it's difficult to count on any deposit being automatically available, especially a check. But most of the time a certain amount of your deposit -- $100, for example -- will be available immediately.
General ATM Terms for Specific Account Types
Below is a listing of various checking account types and their respective ATM policies as they tend to apply. Keep in mind that no two banks or credit unions are alike, and you shouldn't assume these terms apply identically to all accounts of one type. Check out the fees and features of the checking accounts that interest you at the bank or credit union's website or on FindABetterBank.
Free Checking Accounts
The basic checking account, the accounts usually don't get special ATM treatment. Expect to pay the non-bank ATM fee whenever you use a non-bank ATM.
Student Checking Accounts
Some banks offer 1 or 2 "no fee" withdrawals per month with their student checking accounts.
Premium Checking Accounts
Even more banks and credit unions offer "no fee" ATM withdrawals for premium account holders. While not a guarantee, if your financial institution offers "no fee" ATM withdrawals with any of their checking accounts, odds are they'll offer that feature with their premium accounts as well.
Online Only Accounts
Most online-only institutions offer free ATM withdrawals with their accounts. Even with their basic accounts, ATM fees are waived and the non-bank ATM fees are often rebated to make up for not having any branches. Many online-only accounts from regular banks offer "no fee" ATM withdrawals too, but not as regularly. Check the account details for more information.
Rewards Checking Accounts
One of the most prevalent characteristics of rewards checking accounts are their ATM Rebates. Up to a certain point, all withdrawals are free, with no fee from your institutions and reimbursements for fees from the non-bank ATMs. See the Rewards Checking Account page for more details.