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Guide to using ATM machines
In this guide learn what ATM stands for, how to deposit money into an ATM, and how to avoid ATM fees in Canada, while cutting banking costs even when travelling.
Finding a cost-effective ATM near you isn’t always easy. There may be plenty of ATMs, but not all of these automatic tellers will give you access to your bank account without tacking on some hefty fees. No one likes paying $3–$5 just to get a bit of pocket money or for the privilege of depositing cash into their account. To help, here are a few tips and tricks to maximize the ease of use of ATMs while cutting unnecessary fees.
What is an ATM and how does it work?
An ATM, or automated teller machine, is an electronic machine that allows you to perform basic banking tasks, like withdrawing cash, checking your account balance and depositing cash and cheques. ATMs are designed to provide convenient access to banking services 24/7 without the need to go into a branch.
ATMs work by connecting electronically to your bank’s network. When you insert your debit or credit card, the machine reads the information stored on the card’s chip or magnetic stripe. After you enter your PIN, the ATM verifies your identity with your bank’s system. Once authorized, it processes your request, like dispensing cash or transferring funds, in real time.
What does ATM stand for?
ATM is short for automated teller machine. Some banks and financial institutions use a slightly different term, ABM (automated banking machine), to refer to ATMs.
How to deposit money at an ATM
It’s easy to deposit cash or cheques into your account at an ATM if you follow these steps:
- Find an ATM in your bank’s network and insert your debit card.
- Enter your PIN.
- Choose “Cash deposit” or “Cheque deposit” from the available options.
- Insert your cheque or cash into the deposit slot. (Some older ATMs may require you to place the cheque or cash in an envelope first.)
- Check and verify the details displayed on the ATM screen. (Older ATMs may ask you to enter the cheque amount manually.)
- Confirm your deposit, take your receipt and remove your card from the ATM.
Cash deposits are typically available in your account immediately, while cheque deposits may take up to three business days to clear before the funds can be used.
How much can you deposit at an ATM?
The maximum amount you can deposit at an ATM varies depending on your bank. For example, you can deposit up to $500,000 at an RBC ATM, while TD Bank imposes a limit of up to 30 cheques or 50 bills per transaction.
To be sure, check with your bank for details on their ATM deposit limits.
How to withdraw money from an ATM
You can withdraw cash from any ATM, though using an out-of-network machine may incur a small fee. Every ATM is different, but you can typically follow these steps to withdraw your funds:
- Insert your debit or credit card in to the ATM.
- Enter your PIN.
- Select “Withdrawal” from the menu.
- Choose the account you want to withdraw from (like chequings or savings).
- Enter the amount of cash you wish to withdraw.
- Confirm your transaction and wait for the ATM to dispense your cash.
- Take your cash, receipt and card before leaving the machine.
How much can you withdraw at an ATM?
ATM withdrawal limits vary by bank and account type, but generally range from $500 to $3,000 per day. For example, the Scotiabank withdrawal limit is $3,000. To learn exactly how much you can withdraw, on a daily basis, log into your bank account or talk to a bank representative.
These limits are in place as a security measure, in order to stop thieves from withdrawing all your cash if they get their hands on your debit card. From a practical point of view, ATMs can only hold a limited amount of cash, so imposing limits also allows the bank to ensure there’s enough money in the ATM for client withdrawals.
How much do ATMs charge in Canada?
Here’s a list of the most common ATM fees you may be charged in Canada:
- Network access fee. A fee of $1 to $5 per transaction will be charged when you use an ATM owned by another financial institution.
- Account fees. Some chequing accounts place a limit on the number of free transactions you can perform each month. If you’ve exceeded this limit, you may be charged a fee of $1–$1.50 for each subsequent ATM transaction until the end of the month.
- Convenience fee. You may also be charged a convenience fee of $1 to $5 per transactions when you use a privately-owned ATM.
- Foreign transaction fees. If you use your debit card to withdraw money from an overseas ATM, you may be charged a 2%–3% foreign transaction fee. Currency conversion costs will also apply, either in the form of a fee or an exchange rate markup.
Comparison of ATM fees in Canada
| Who owns the ATM? | Per transaction fee | Out-of-network ATM fee | Convenience or service charge | Total ATM fee |
|---|---|---|---|---|
| ATM with bank or in bank network | $0 to $2 | n/a | n/a | $0 to $2 per ATM transaction |
| ATM outside of current bank network | $0 to $2 | $0 to $2 | $1 to $5 | $1 to $9 per ATM transaction |
| Private ATM or cash machine | $0 to $2 | $0 to $2 | $1.50 to $5 | $1.50 to $9 per ATM transaction |
Do all ATMs charge a fee?
No. If you withdraw cash at an ATM operated by your bank or a member of their partner network, no ATM fees will apply.
However, you’ll be charged fees if your bank account doesn’t have transactions as part of the package (either as a free account perk or as part of the monthly bank fee). You’ll also be charged a fee if you make an ATM withdrawal using a different bank’s ATM.
How to avoid ATM fees
Sick of fees eating into your account balance? There are several simple things you can do to avoid ATM fees in Canada and while travelling overseas.
Use an ATM in your bank’s network
If you know you’ll use ATMs frequently, then pick a bank account or banking provider with a large network of ATMs. A large network means it’ll be easier to find a machine that doesn’t charge ATM fees.
Bank accounts with free ATM withdrawals
The following accounts all include free ATM withdrawals:
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Pick a bank that reimburses ATM fees or has a partner network
Here’s the breakdown of ATM networks from Canada’s Big Five banks (plus National Bank, since it now rounds out the Big Six banks list):
- TD Canada Trust: Over 3,500 ATMs across Canada and 2,600 in the United States.
- RBC: Over 4,200 ATMs across Canada.
- CIBC: Over 3,000 ATMs across Canada.
- Scotiabank: Around 3,600 ATMs across Canada and more than 44,000 worldwide through the Global ATM Alliance.
- BMO: Over 3,300 ATMs across Canada and 1,400 in the USA.
- National Bank: Over 2,800 ATMs across Canada through THE EXCHANGE network.
Although digital banks don’t have their own ATMs, many provide access to partner networks or reimburse fees for using out-of-network machines, such as:
- Tangerine: Use any one of Scotiabank’s more than 3,600 ATMs across Canada without paying a fee.
- EQ Bank: The EQ Bank Card offers free withdrawals at every ATM in Canada. If you’re charged a fee by an ATM operator, EQ Bank will reimburse it within 10 business days.
- Neo Financial: You can use your Neo card at any ATM that accepts Mastercard. However, the ATM operator may charge fees.
- Simplii: Free access to over 3,000 CIBC ATMs across Canada.
- Wealthsimple: Wealthsimple will reimburse any ATM fees you’re charged worldwide within four business days after the transaction is processed.
Use an ATM in a partner network
Most banks now belong to one or more ATM networks — connected automated teller machines that allow different banks to communicate safely and efficiently. Quite often, banks and financial institutions belonging to the same network will charge lower (or no) fees.
To determine if your bank account is part of a network, look for network logos on your debit, credit or prepaid card.
Widely-used ATM networks in Canada include: Global ATM Alliance, THE EXCHANGE, Allpoint, Interac, Plus, Maestro and Cirrus.
Get cash back when paying for your purchases
Most major grocery stores, drugstores and gas stations will let you get cash back if you make a purchase. Some stores offer this for free, while others have a surcharge, which is usually lower than ATM fees charged in Canada.
Get a cash advance with your credit card
You can use your credit card to withdraw cash from your available credit limit at an ATM. This is known as a cash advance, and you’ll need to pay a cash advance fee, which could be either:
- A fixed fee of around $10
- A percentage of the transaction amount, such as 5%
You’ll also be charged interest at your card’s cash advance rate, which is typically higher than the standard purchase rate.
How do I find ATMs? Use the ‘ATM near me’ maps
If you want to find an ATM nearby, simply open Google Maps and search for “ATM near me” to see options in your area.
Another option is to use your bank’s ATM locator tool. Most banks and financial institutions have tools on their sites and mobile banking apps that you can use to find the nearest ATM or branch.
Mastercard and Visa also offer global ATM locator tools on their respective websites, so you can find an ATM that accepts your card and may offer lower fees when you’re abroad.
ATM fees when travelling overseas
When travelling overseas and using your debit card at international ATMs, you could be charged a variety of fees. In order to avoid these additional costs, it’s best to understand when and where these fees are charged.
Non-network ATM fee charged by your bank
Many banks and financial institutions apply a fee when you use your debit card to withdraw money from an overseas ATM. This is typically called a non-bank usage fee since you’re using a bank different from your own. This charge tends to be a flat fee between $1 and $5, plus some may charge a percentage of the amount you withdraw (usually 2.5% to 3.5%). Some banks will waive the ATM fee if you withdraw from ATMs belonging to their global alliance.
Non-client ATM fee charged by the ATM operator
The local ATM operator may also charge a fee for the use of the ATM. While it varies depending on the country, you could pay a similar fee to that your bank charges: anywhere from $1 to $5, plus some may charge a percentage of the amount you withdraw (usually 2.5% to 3.5%). This fee will typically be shown on the screen before you make a transaction, or could be shown as a physical sticker on the ATM.
Currency conversion fees
You can easily avoid paying a currency conversion fee by always paying in the local currency. Some debit/credit machines will ask if you’d like to pay in the local currency or Canadian dollars. Always choose the local currency to avoid currency conversion fees and let your own bank do the conversion for you.
Foreign transaction fees
If you use your debit card to make a point-of-sale purchase — say, a cashier terminal at a local store — you may be charged a foreign transaction fee. This fee is typically between 2% to 3% of the total transaction cost and is charged in addition to other fees, such as currency conversion fees.
Avoid ATM fees and other overseas debit card costs when travelling
To reduce or eliminate fees when using your debit card while travelling, you need to open a bank account that includes low or no ATM and debit card fees when overseas. Look for accounts that reimburse out-of-network ATM fees or provide access to international ATM networks.
What to consider when using your debit card overseas
It’s important to keep the following factors in mind when using your debit card to withdraw funds overseas:
- Daily withdrawal limits. You’ll likely have a daily withdrawal limit set on your debit card. Check with your provider for specific information on your withdrawal limits. If you need access to a higher withdrawal limit, contact your bank and request an increase.
- International ATM alliance networks. Some banks, such as Tangerine and Scotiabank, belong to an international ATM alliance. This alliance extends to many countries around the world and allows you to get cash out overseas without paying an ATM withdrawal fee.
- Where you’re travelling. Check that your bank has ATMs in its network in your destination country, and be sure to only use those specific ATMs. Otherwise, you’ll have to pay out-of-network fees.
- Exchange rates. Withdrawals in foreign currency use your bank’s exchange rate, which changes daily and can affect the total cost of your withdrawal. Check the rates before and during your trip so you know how much your Canadian dollars are worth, whether you’re using cash, debit or credit.
Bottom line
ATMs make it easy to manage your money on a day-to-day basis, with no need to waste time in a queue at your local bank branch. You can withdraw cash, deposit funds at an ATM and check your balance quickly and easily. But ATM fees can eat away at your hard-earned dollars, so make sure you know which fees apply to your account.
ATM Fees and ATM Machine FAQs
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