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How to Avoid Automatic Banking Machine (ABM) Fees?

With advances in new technologies, it is now possible to withdraw money via automated teller machines (ATM) in your preferred location. However, this convenience offered by ATMs has fees that so many users seem to be unaware of.

Disclaimer: The information in this article is provided for informational purposes only, should not be construed as legal advice on any matter and should not be relied upon as such. The author accepts no responsibility for any consequences of any kind arising from the use of this information.

With advances in new technologies, it is now possible to withdraw money via automated teller machines (ATM) in your preferred location. However, this convenience offered by ATMs has fees that so many users seem to be unaware of.

Automatic teller machines or automated banking machines are generally either owned by a bank or independently operated.

Since the owners or operators charge withdrawal fees at their discretion, you would do well to be vigilant, but most importantly, to think twice before using an ATM not owned by your financial institution.

This is an example of a withdrawal of $20 from an ATM that incurred $5.75 as withdrawal fee, representing at the end, a total of 28.75% of the withdrawal charges.

 

A $20 withdrawal

  • fee for using one’s card at another bank’s ATM: 2.25$
  • network access fee: 2.00$
  • regular transaction fee: 1.50$
  • total withdrawal fee: 5.75$
 

This extra 28.75% on a $20 withdrawal is proof that the convenience is not always free of charge.

According to the Canadian Bankers Association, there are three types of charges associated with the use of your debit card at an ABM:

  • regular transaction fees
  • convenience fees
  • network access fees

Regular transaction fees

These are fees paid to your bank for the services it offers to you. In addition, a checking account has a limited number of transactions. Once you go beyond that number, transaction fees may be applied. It is, therefore, important to note that some accounts that do not predefine the number of monthly transactions charge otherwise, regular transaction fees for every transaction.

Convenience fees

These are fees that you pay to third party ABMs for using their services. Such ABMs are found in small businesses, restaurants, or gas stations. Banks also charge convenience fees from their non-clients that use their ABMs. In Canada, a number of convenience fees must be provided before any transaction is attempted. That said, you are free to proceed or cancel the transaction if you are not willing to pay the additional cost.

 

Network access fees

When you access your account from a foreign ATM, your bank charges you what is termed network access fees. The amount of the charges may increase if the currency was withdrawn is different from that of your bank account. Besides the exchange rate, an extra cost may be applied during the cash changeover. In addition, some local banks charge $3 for cash withdrawals in the US and $5 on those made out of North America plus an added 2.5% for foreign currencies exchange. In that case, it is advisable to get in touch with your bank before any travel out of the country.

Now that you are informed about the various fees associated with withdrawals from an ABM, here are the six tips that will help save your money.

  • Tip No 1- Always use an ATM of your bank so as to avoid network access fees.

A growing number of banks are increasing their presence with ATMs through partnerships with retailers.
For example, clients of the Bank of Nova Scotia can get access to automatic teller machines in most of the 7- Couche-Tard stores, Cineplex theaters, and Quickie convenience stores.
The RBC Royal Bank’s automatic teller machines are found in the Shoppers Drg-Mart, Esso service stations, Pharmaprix, Iga, Chevron, or London Drugs.

As for the ABMs of the CIBC Bank, they are found in the No-Frills supermarkets, Petro-Canada, Pioneer service stations as well the Toronto Pearson International Airport (Terminal 3).

For the BMO Bank of Montreal, the Metro stores, Food Basics, Rexall, Rabbat, Pharmaplus, Daisy Mart, Sobeys, and Shell have available machines.

Lastly, if you are a customer of TD Canada Trust, you can locate TD Green Machines in most Ultramar Corner stores.
Keep in mind that by withdrawing from an ATM operated by a bank different from yours, an additional fee will be applied.

 

  • Astuce n°2 – Tip No 2- Plan ahead of time and withdraw accordingly the money that you will need for your leisure (outing, lunch, shopping)

By so doing, you can save on withdrawal costs as well as manage your budget and your monthly bank transactions better

  • Tip No 3 – Deal with businesses that provide a cashback facility.

Cashback is a service offered to retail customers whereby they receive a cash refund after making their purchase by debit card. Examples of stores offering that are Wall-Mart, Loblaws, No-Frills, LCBO.

Do you want to make at least one purchase before making a payment? Do you regularly drive and are always in need to stop at a refueling station to buy a bottle of water? If that’s the case, why not buy a pack of 20 bottles and stock them in the boot of your car? Keep in mind that a single bottle at the counter is sold at a price higher than the pack at the shelf.

 

  • Tip No 4 – Use The EXCHANGE automatic teller machines network.

Some Canadian banks and credit unions have partnered together under THE EXCHANGE Network of automatic teller machines. This network offers deposits, withdrawals, and PIN changes without additional cost. If your bank is a participating member of this network, then this is a golden opportunity to carry out your transactions at these ATMs without a fee.

These include, in particular, credit unions among which you have the National Bank, HSBC Bank Canada, Canadian Western Bank, ICICI Bank Canada…
See the following link for more details: http://www.the- exchange.ca

  • Tip No 5

Some ATMs have a waiver of network access fees depending on your bank account. Even though the fee is not necessarily different, ATM operators may still charge you convenience fees for using their machines.

  • Tip No 6

Use your bank’s app on your smartphone. With today’s leading-edge technology, it is very easy to locate the nearest ABM.

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I’m the founder of Easy Finance Academy, and a financial educator to minority investors and entrepreneurs. And every day, I empower my students with the best information, strategies, and proven insights to help them achieve the financial freedom they dream of.

Get Started Now

I’m the founder of Easy Finance Academy, and a financial educator to minority investors and entrepreneurs. And every day, I empower my students with the best information, strategies, and proven insights to help them achieve the financial freedom they dream of.

Easy Finance Academy

Easy Finance Academy Inc. is a global financial education company for minority investors and entrepreneurs.

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