Banking Basics: ATM fees

We’ve all been there—you head to an ATM to get some much-needed cash, only to discover that you’ll be subject to a fee from your bank. And if you’re dealing with a foreign currency, that’s where things get really tricky. 

In our previous Banking Basics article, we covered the main bank fees that you can expect to pay and now we’re turning our attention to ATM fees. Unlike some bank charges, it’s usually possible to avoid ATM fees—but only if you’re careful. And that’s exactly what this guide is for. While we all know how to use an ATM, here’s how to make sure you’re only charged for the amount you withdraw.

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In Europe, there’s a lot of variety in ATM fees: while they’re relatively rare in the UK, for example, they’re common in Germany, especially if you use an ATM outside of your bank’s network. In those cases, fees of around €4 are standard in Germany.

How much you’ll have to pay at a European ATM depends on two main factors:

• Your home bank’s fees
• The ATM’s own fees

Most banks list their charges for ATM use in their Terms & Conditions, or on their website. While some banks don’t charge a fee, some offer a limited number of withdrawals for free, and others charge a flat fee with every withdrawal. The fee might only apply if you use an ATM outside of your bank’s network—and don’t forget to watch out for higher fees if you’re traveling abroad.

There could also be a flat fee to pay to the machine itself, rather than to your bank. This is a lot more common if you’re using a non-bank ATM: for example, the “independent” ones you sometimes come across in grocery stores, bars or other locations that aren’t banks. The safest option is to always use a mainstream, bank-branded ATM.

ATM transactions do come at a small cost to the bank. This is because they have to store the money, maintain the upkeep of the machines, and if necessary, communicate with your home bank to balance their books. ATM fees account for these costs, often with a profit margin added on top.

If you feel that the service being offered—such as access to your own money—is something you shouldn’t have to pay for at all, there are banks that offer free ATM withdrawals.

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Whether you’re traveling around or live in a European country, here are a few tips on how to avoid ATM fees:

• Find a bank account that doesn’t charge them. Some banks—particularly digital-only ones—offer a number of free withdrawals every month.
• Stick to bank-owned ATMs. “Independent” ATMs (the kind that you might find in off-the-beaten-track locations or inside and around small convenience stores) are more likely to charge you fees for using their service. They’re also more likely to be tampered with, making them less secure than their branch counterparts. 
• Be tactical with withdrawals. If your account only gives you free withdrawals when using branch ATMs, planning ahead to stop and take out money every time you see one may be worth the money saved. If your bank gives you a limited number of free withdrawals per month, take out larger sums and store the excess at home to avoid carrying lots of cash with you.
• Pay by debit card where you can. Naturally, the fewer cash payments you make, the less cash you need. Make it last by spending the money you do have only in small, “cash only” venues like markets. Then, opt to pay by card, try going contactless, or make mobile payments everywhere else.

An ATM fee reimbursement is when your bank offers to cover the cost of any ATM withdrawals that you have to pay. You’ll either have to apply to the bank for a refund, or get your bank to process this directly at the end of the month. (The latter is still quite rare in Europe, and is more commonly seen in the US.)

Why do some banks refund ATM fees? Simply put, it’s an attractive offer: ATM fees can get irritating, especially if you travel abroad often and face unfamiliar banking systems. Getting these refunded can be a great incentive to keep customers using their bank card abroad.

If you’re an American traveling in Europe, banks like Schwab and Fidelity (to name a couple), will offer ATM fee reimbursement services. In Germany, you might be able to get ATM fees reimbursed via a bank such as Santander, but you’ll probably have to manually apply for this refund and the answer isn’t always guaranteed to be a “yes.”

If you’re an avid international traveler, it could be worth opening an account with an online-only bank, as these banks are often particularly keen to cut out ATM fees for customers traveling abroad. At N26, we cut out fees for foreign currency ATM withdrawals for You and Metal card holders.

To make sure you don’t lose out unnecessarily, don’t forget to factor in the exchange rate if you’re making withdrawals in a foreign currency. With most cards, you should be getting the rate set by Visa or Mastercard.

Within the European Union, it’s becoming ever easier to spend money on your card outside your home country, thanks to European integration and the eurozone. But how much do foreign transaction fees for withdrawing money from ATMs outside Europe cost?

As with ATM fees in general, there’s a lot of variation from bank to bank—and from country to country. There’s often a percentage fee of around 1.7%, or there could be a fixed fee per withdrawal. It’s also worth checking if local ATMs in your destination are likely to charge their own fees. In the US, for instance, you often have to pay a few dollars to the bank that owns the ATM.

Generally speaking, outside of the eurozone, you will probably have to pay for ATM withdrawals, especially if you’re using a bank that’s not your own. Does your bank provide special partner deals or offers with any international banks? If so, there might be some ATMs you can use for a reduced fee, or even for free.

And, as you would at home, using a bank-owned ATM means they’re less likely to charge you extra.

As mentioned above, some recently established online banks offer especially good deals on international transaction fees. So if you want to avoid ATM fees altogether when you’re traveling, you could consider one of these.

Finding the right bank is always a personal decision. International travelers, however, have a specific set of concerns, ranging from ATM withdrawal fees abroad, and finding the best exchange rate. Take a look around for bank accounts specifically designed for people who often travel abroad. These might well offer some of the best deals, like fee-free ATM withdrawals.

In countries like the UK, Italy and Austria, ATM withdrawals from an N26 account are always free. And in other countries such as Spain, Germany and France, customers get several free withdrawals each month.

What’s more, with N26 You and Metal accounts, cash withdrawals are free internationally in any currency—a great option for travelers who don’t want to carry bags full of cash with them. After all, it’s your money, and you should have easy access to it wherever you are in the world.