Do you know what your bank and the Government is charging you every time you withdraw cash from an ATM?
That little hole in the wall could be burning a big hole in your pocket.
Every time you take cash out of an ATM, your bank may be charging you as much as 35 cent in fees and the Government could be charging you an additional 12 cent in stamp duty.
So, that tenner you grabbed on the go this morning might actually have cost you 47 cent in fees. That’s a premium of nearly 5%, just for the privilege of withdrawing your own money!
Despite these high fees, ATM withdrawals still account for nearly 40% of all debit card uses in Ireland.
But the good news is that ATM fees are the easiest of all bank fees to avoid.
What does your bank charge for ATM withdrawals?
AIB currently charges 35 cent for every ATM withdrawal, KBC charges 30 cent and Bank of Ireland charges 25 cent.
Ulster Bank doesn’t charge anything and neither does Permanent TSB.
In fact, Permanent TSB’s Explore Account pays customers 10 cent bank for every point of sale debit card use, but this payback feature does not apply to ATM withdrawals.
All three banks that charge transaction fees for ATM withdrawals provide customers with ways to avoid these fees altogether.
AIB customers can avoid maintenance and transaction fees by keeping €2,500 on deposit at all times or by using their account to repay a mortgage they have with the bank, KBC customers can avoid fees by lodging €2,500 every month and Bank of Ireland customers can avoid transaction fees (but not maintenance fees) by keeping €3,000 on deposit at all times.
The Government also charges you when you use an ATM. Well, at least for the first 42 times you use one in a calendar year.
In the 2016 Budget, Michael Noonan announced a 12 cent stamp duty charge for all ATM withdrawals, capped at €5 a year. That works out at a 12 cent charge for the first 42 withdrawals in a year, after which the stamp duty is waived.
This move replaced the flat €5 annual stamp duty that was previously charged to all ATM and debit card holders.
Top tip for avoiding ATM fees
Now for the good news. ATM fees are really, really easy to avoid.
Simply get into the habit of asking for cashback when paying for your groceries or petrol to negate the need to ever visit a hole in the wall.
You won’t be charged any additional fees for the cashback you receive at a point of sale, and it could even help with your budgeting.
If you decide to always get €20 cashback with your weekly grocery run, for example, you will be able to track your spending more accurately and cut out those random runs to the ATM when you're short on cash.
Familiarise yourself with fees
It’s important for customers to know what they’re paying in ATM fees, and in all banking fees, over the course of a year. Small charges and ad hoc trips to the hole in the wall really can burn a big hole in your pocket, without you realising it.
To find out how to avoid fees with your bank, check out our ‘What are your bank’s rules for fee-free banking?’ blog post. And if your bank’s rules don’t suit your spending and savings habits, then you should compare the market and switch.