The ATM is a fact of life for many individuals. They have to have cash from their chequing accounts, so they use them to withdraw it. However, many people are becoming frustrated with the fees that they are charged to access their own money. There are many things that make Canadians happy, but sometimes it is the simple things that can make them the happiest. Tell a Canadian that they can avoid paying ATM fees when accessing their cash and you will notice a lot of joy over something that seems like no big deal.
However, how much a person saves at an ATM machine is a big deal because it does add up over time. In fact, this is something that is so important to a lot of people that Credit Union Central of Canada launched a free ATM locator app back in 2012 that charged no surcharge fee. This app made finding such machines as easy as turning on their cell phones.
People like to have a little money in their wallets and purses, it is important to them to be able to access their money when they need to. It is so important that in 2011, Canadians made 605 million cash withdrawals. In addition, 26 percent of Canadians reported that they conduct a majority of their banking through ATM machines.
The Sticking Point
The sticking point for consumers is the fees. A survey done through J.D. Power and Associates showed that customer satisfaction with banks declined in 2018, which was largely due in part to the changing fees they experienced in relation to banks. Many Canadians have wondered why they have to pay to get access to their own cash if so much of the banking industry has gone electronic. $15 in ATM fees every month and an account fee charged monthly can add up. In fact, it adds up to an average of $300 per year.
Nonetheless, the financial institutions also turn around and integrate service fees into account. The annual average per customer is $185 each. These fees go toward keeping the branch, online banking, and ATM infrastructure intact. Until the 1980s, financial institutions charge a wide range of interest rates so that the borrowers would subsidize other services. The borrowers didn’t necessarily know this is why there was such a wide range of interest rates. Today, the model is more transparent with everyone paying their share.
Minimize the Sticker Shock
Just because consumers in Canada know about the fees doesn’t mean that they like them. Here are some tips for minimizing sticker shock:
- First, be aware of the kind of account that you have. Long gone are the days when a bank offered just one type of savings and chequing account. If you use your debit card often and you do a lot of online banking, it is best to opt for an account that allows unlimited transactions. Credit unions usually charge less in service fees, so you may want to consider a financial institution switch.
- Second, only use the ATM machines that belong to your financial institution. This will help you avoid the extra fees. If you withdraw money from a machine that belongs to someone else, you can get “dinged” for convenience and network fees that can total nearly $6. This is the average as determined by the Financial Consumer Agency of Canada. Using an ATM that is privately operated can add nearly $8 to the cost of a single transaction.
- Third, withdraw more money at a time. Take out $100 or $200 one time a week instead of doing multiple $20 transactions throughout the week. You will pay just one fee for the withdrawal rather than several.
- Fourth, take advantage of a store’s cash back option. Many stores do not charge any fees for you to get cash back. You may want to ask them to be sure, but chances are there is no fee. This is the perfect opportunity to withdraw cash without using an ATM.
- Fifth, your financial institution may offer a fee-free account. If not, it can pay to find an institution that does. Some of the institutions that are primarily online may offer these types of accounts. While these institutions may be online, they may be a part of large ATM networks that you can take advantage of. These sites may also offer online ATM locators so you can find ATM machines within their network.
In regards to the credit union ATM locator app, it is showing higher popularity than what its creators expected. The creators said that the app managed to be listed in the iTunes “What’s Hot” section and reviewers have rated it rather high. On a scale of five stars, it averages 4.5. This tells the creators and the industry that people do not like fees. They don’t like paying the surcharges and they want to have access to their money that is not expensive. They want convenience and this app helps them. If there is an influx of individuals moving their money to credit unions, the reduced fees and the fact that ATM fees can be minimized will most likely be the reason. As it stands, more and more people are learning that they do have options.
Final Thought
ATM fees can get people down because they tend to be high. How high they depend on the ATM machine that is used. Fortunately, there are strategies that you can use and options that are open to you that will allow you to pay as little as possible.
