ATM Fees: Avoid Them

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.


ATM Fees: Avoid Them — 18 Comments

  1. Plus, if you walk it is good exercise to go out of your way!

    I am extremely guilty of this, I tend to use those machines far too often. I have gotten better about it though, and just get cash-back when I am purchasing something.

    • I use my credit card for everything I can to get the cash back rewards. Then I just transfer money online to pay for it after. If I can’t pay for it with Visa then usually I consider myself SOL. I think I have used one of these ATMs once two years ago, and I distinctly remember that I hated the transaction fee, so I am proud to say I haven’t used one since.

        • It makes sense to use a rewards card. I end up paying 99 cents for every dollar I spend, which adds up over the course of the year. I actually got Visa cheques with my credit card but have not found a use for them, although it sounds like you could have used them.

  2. Nice post. I can’t count the number of drunk times at a club I went “Dur! I need another rum and coke! 20 bucks outta the machine!” I started to catch on near the last year and half or two years (took six years to graduate). If I can add something about college drinking, if your school includes a free bus pass with your enrollment please please please use that to get to clubs. More so than ATM fees when going out drinking it was those who got caught drinking and driving who really took a bit hit yearly in life. Not just the fines, but possible jail time, and what employers think of you when you come in for an interview. I’m just as guilty of this as the next guy but like I said wised up the last few years.

    • At the club the transaction fees can be really bad, the owners really know what they are doing.

      Just about every transportation method beats drinking and driving, even if you do not have free bus transit. The $2 cost of taking a bus or the price of a taxi is well worth the cost when you first of all consider the dangers to yourself and others when you drive impaired and then you think of the possible consequences of being caught. DUI’s are a very big black eye nowadays and rightfully so.

      Thanks for your advice and experience.

  3. I agree. Standard transaction charges without regard to the corresponding amount to be withdrawn is quite unreasonable also in my view. Limiting ATM visits is likely a must if for practical reasons, one cannot avoid the charge.

    • If you have to take $20 out I do not see a $1.50 as worth it. If you take out $200 it is getting closer to reasonable but I still think I should have free access to my money. If it is an emergency (or perceived emergency) then I may be able to rationalize the fee.

  4. Wow. You’re school is really trying to get your money! The college I went to only had ATMs in one location, next to the bookstore in the student center. But they worked out a deal with the bank that anyone who used those ATMs wouldn’t be charged a fee, no matter what bank you had. Of course, your own bank was probably going to charge you for using an out of network ATM, but at least the ATM wasn’t going to charge you.

    Of course, the bank that bought that bank has since been bought, so who knows if the school still has that agreement.

    • I didn’t know other schools would do that, I just figured that it was the norm. It sounds like your school was financially friendly than ours, that’s for sure. but if the bank charged you anyway than it would still be worth it to go to your own machines.

  5. Agreed! I have never understood why people waste their money on ATM’s. Just take out $100 and have a nice cushion in your wallet at all times. Don’t ever get into a position where you have to use some strange ATM that charges an arm and a leg.

    • Keeping enough cash to get you out of a quick jam is the best way to avoid these fees. Once you have it then you can just keep the cash there until you need it. It is like a mini emergency fund.

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  7. Yeah you also have to be careful like one of the commentators at the top said, because not only do atms usually charge you at least $1.50 your bank will usually also charge you $1.50 for using a different atm. so now you are out $3.00 not to mention the fact around here the fee is usually $2.00 so it just cost you 20% to take out that $20 bill. One smart thing you can do is open an account with a bank that reimburses the fees so it is free to take money out of any atm. Ally and Charles Schwab are two that do that.

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