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An automated teller machine (ATM) is an electronic banking terminal that allows customers to complete self-service transactions such as cheque deposits, bill payments, and, most commonly, cash withdrawals, using their credit card or debit card. In Canada, it is commonly referred to as an automated banking machine (ABM).
All of Canada’s major banks and credit unions have their own branded ATMs, but there are also privately-owned so-called “white label” ATMs located in public places such as malls, hotels, bars, and casinos. Account holders can use their own bank’s ATMs at no charge. However, your bank may charge you a fee for using an ATM if the transaction is over your account’s prescribed monthly limit. There are additional fees associated with using another financial institution’s machines and white label ATMs, and with using an ATM in a foreign country.
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If proximity to bricks-and-mortar branches and ATMs is important to you, take note of ATM locations near your home, work, or on your regular travel routes before deciding which financial institution to open a chequing account with. For example, TD Bank has the most ATMs with more than 1,100 across Canada, while Scotiabank ATMs can be found in 7-Eleven convenience stores and Cineplex movie theatres. Smaller subsidiaries of large banks can also piggyback on their vast networks of ATMs. Tangerine customers can use Scotiabank ATMs at no charge, as can President’s Choice Financial customers with CIBC ATMs.
For the most part, you won’t be charged for using an ATM that belongs to your own financial institution unless you run over your account’s monthly transaction limit. Most chequing accounts charge a monthly fee that covers you for a certain number of transactions. If you go over this number, you’ll be charged for each additional transaction, typically $1-$1.50 a piece. For example, if you’ve used up your 15 monthly transactions and go to make a cash withdrawal at your bank’s ATM, you’ll be charged a fee.
If you’ve gone over your monthly transaction limit and you withdraw cash from another bank’s ATM, you’ll incur three different fees—two from your bank (one for making an additional monthly transaction, one for accessing another institution’s ATM) and one from the ATM provider for the convenience of using their machine (more on this below).
|Your bank||Additional transaction fee||$1.50|
|Your bank||Non-network ATM fee||$1.50|
|ATM owner||Access fee||$1.50|
If you withdraw cash from ATMs frequently every month and find yourself going over your monthly limit, you may want to consider a chequing account with a slightly higher fee that covers more monthly transactions. It might seem counterintuitive to pay a higher fee up front every month, but you’ll save money in the long run by not racking up fees on additional charges.
While most ATM transactions are covered under your monthly fee, others will cost extra regardless. You will almost always be charged a fee for things like credit card cash advances, printing a statement or accessing bill payment history.
Using an ATM attached to another provider (not your own) will cost you. First, your own provider will charge you a network access fee for withdrawing money from an ATM belonging to another financial institution. This fee is typically $1.50-$2.50 per transaction. Second, the ATM provider will charge non-customers a convenience fee, typically $1-$4, for letting you access their machine. Before going through with the transaction, you’ll be advised of the convenience fee and be required to accept it before continuing with the transaction. It’s important to know that when using another provider’s ATM, you will only be advised of the convenience fee, not your own bank’s network access fee—that will be added on top of the convenience fee.
In many cases, ATMs are branded by the banks and credit unions that own them. But since 1997, privately owned white label ATMs have been sprouting up across Canada in high-traffic areas where traditional branded ATMs aren’t, such as bars and restaurants, casinos, malls and hotels. As with using another financial institution’s ATM, white label ATMs charge a convenience fee, which you’ll be advised of and required to accept before continuing your transaction.
White label ATMs have the highest convenience fees out there—according to the Financial Consumer Agency of Canada, they can range between $1.50-$5 per transaction. This is on top of the $1.50-$2.50 network access fee and any applicable regular account fees your home financial institution will charge you. For example, if you withdraw $20 from a white label ATM and are charged a $2 network access fee from your own bank and a $3 convenience fee by the private operator, you’ll end up paying $5 or 25% of your overall withdrawal in fees. As such, it’s not advisable to use private ATMs to take out small sums of cash.
White label fees are the highest because private operators aren’t beholden to a minimum or maximum limit, meaning they can charge as much as they want. Because of this, consumer advocates are highly critical of white label ATMs, with some groups even encouraging boycotts. Only use a white label ATM if you’re in a dire cash emergency—it’s really going to cost you.
Let’s take a look at an example of the fees you might be charged for withdrawing cash from your Canadian chequing account at an ATM in the United States:
|US ATM Access Fee||$2 USD|
|Total withdrawal amount||$102 USD|
|Foreign exchange conversion 1.40%||$142.80 CAD|
|Foreign exchange fee 2.5%||$3.57 CAD|
|Home bank ATM fee||$5 CAD|
|Total withdrawal amount||$151.37 CAD|
As you can see in the example above, the fees paid to your home bank and the foreign bank for accessing the ATM, plus the currency conversion fees add up to $11.37. In total, you’ll spend $151.37 Canadian dollars to withdraw $100 US.
Charges vary widely based on financial institution and what type of chequing account you have, but it is possible to avoid foreign ATM fees. Many banks belong to networks that allow customers to access other member financial institutions’ ATMs without charge. If your debit card is linked to a network such as Interac, PLUS, Maestro, Interlink or Cirrus, you’re free to use another financial institution’s ATM as long as they also belong to that network. Take a look at the back of your debit card—it should display the logos of the networks your card is linked to.
You should also check if your bank has international partners allow access to their ATMs. For example, Scotiabank waives its $5 foreign ATM fee if you use a machine with a bank that is part of the Global ATM Alliance, which has member banks in the U.S., Australia, Europe, Asia, Africa, and South America. TD Canada Trust customers can use TD Bank machines in east-coast U.S. states, from Maine to Florida, without charge. Before leaving home, make sure your network is readily available where you’re going.
There may be an almost overwhelming number of ATM fees, but there are also several ways to avoid needless charges: