Where I go to school there is a CIBC bank machine across the road in a 7-11. This is handy because I have President’s Choice Financial accounts and they use the CIBC machines. There is also a TD branch about two blocks away. I like it there because if I need to go it forces me to go for a walk, something everybody enjoys once in a while. And even though I do not bank anywhere else there is also a Bank of Montreal branch about two blocks away and a RBC right across the street. I haven’t run across one but I am sure there is also a Scotiabank close by. That is the five major banks in Canada, all within reasonable walking distance.
On campus however there are ATMs all over the place; in the dining hall, the food court, the business building, the athletic complex everywhere. These are generic machines, the kind that simply say ATM on them. What they neglect to mention is that they want your money as much as you do. The machines here charge a $1.50 transaction fee each time you use them. I believe there are also machines that are even more expensive than that, but that is the standard rate around here.
And it is not just on campus that these machines tempt you with instant access to cash. Go out to a club or bar on the weekend and you will be sure to find an ATM in case you do not have the charge for cover or in your infinite wisdom you decide that you need more drinks than you can buy with what is in your wallet. All of this costs you money. If you only take out a $20 bill to cover you for the moment, the fee works out to 7.5%. If you take out $100 than it is “only” 1.5%. But then you have more money out than you need, which will likely cause you to spend more than you would want. So even if you try to use them efficiently they find a way to cost you money.
This is why ATMs that charge transaction fees need to be avoided like the plague. I have two machines where I can withdraw money free of charge within ten minutes of me. Some might view the ten minutes of time it would take to walk to my TD machine as not worth the buck fifty, but multiply that by the amount of times I have walked to TD this year (16) by $1.50 and you get $24. Multiply that now by four years in school and you are almost dropping $100 just so you don’t have to walk a little bit farther. There is a lot of fun to be had for $100, more fun than I would have in the time I saved by not walking as far. nd consider what that money could do if invested, and now you have to think about that convenience costing you $500.
This is a really easy way to save money. There is no good reason to ever use an ATM which charges you for a service that other ATMs offer for free. If you are in a jam and need cash fast, then it may be an option. Transaction fees should be saved for absolute emergencies and even then need to be a last resort. If you are going out you should have a twenty on you. If you think you might need cash, prepare before you go anywhere. Use your bank’s machine and you will end up saving more than you think.