ATMs

The development of automated teller machines has probably changed banking more than any other financial service or product in the past decade. An ATM allows customers to do many banking transactions 24 hours a day without the need of human interaction or a large physical building. To use an ATM, a customer simply needs a bank account, an ATM card and personal identification number. ATMs are an easy way to withdraw money, make deposits, check your balance and transfer money. They make banking services available 24 hours a day, seven days a week.

Many banks have utilized ATMs to create a larger customer base by offering branch bank services directly through an ATM that allows customer access over a vast geographic area. ATMs are very convenient for the bank as well as the bank customer, by enabling around-the-clock withdrawals and other banking activities. Benefits of using an ATM include, and easy access to cash, convenient and quick deposits, balance inquiries, balance transfers between accounts, making loan payments and easy access to a variety of other banking services. Unfortunately the tradeoff can be but finding one that works with your card or finding one that doesn’t charge an exorbitant fee.

All ATMs require the use of a personal identification number, PIN, to access your account. The physical card and the PIN allows access to your banking services, it is important that you keep the PIN guarded; otherwise someone else could potentially access your account.

To use the ATM, you will first place your card into the machine, and enter your PIN. Then you will be able to do your banking. Available transactions include withdrawing money, depositing money or checks, checking your account balance, or transferring money.

As most consumers are now well aware, there is an abundance of ATMs throughout U.S. metropolitan areas. Many banks are part of regional and even international networks that allow their customer’s access to ATMs throughout the world. There are four general categories of ATM machines:

Proprietary ATMs. With a proprietary ATM the ATM is owned by your bank. This is the best type to use, because you are often not charged for ATM transactions or the fee will usually be lowest.

Non-Proprietary ATMs. With non-proprietary ATMs, the machine is owned by another bank. When you use such a machine, the owner bank will charge you a fee. In addition, your bank may also charge you a fee for using an ATM that it doesn’t own. The costs can be substantial relative to the amount most people withdraw, so be sure to know the amounts in advance.

National ATMs. These ATMs are connected to a national network. Some banks are part of a regional or national network, such as Cirrus, Plus, Interlink or NYCE. In most cases, using an out-of-town ATM that is part of such a system fees associated with using these ATMs will cost you a fee from the network and one from your bank.

Other ATMs. ATMs can now be found in many different locations such as grocery stores, gas stations, convenience stores, etc. They are there for your convenience, but you can expect to pay fees for their use.

If a bank or credit union doesn’t have ATMs it will likely have an agreement with one of the ATM networks that either allows access certain machines for free or may reimburse the customer for any surcharges. Usually there’s a limit to usage and the amount of fees that will be reimbursed.

The most common banking transactions done by an ATM include depositing money, withdrawing money or checking your balance from either your savings or checking accounts. In addition to these services, ATMs also allow customers to deposit funds into an account. Most people never use the ATM for making deposits, they prefer taking money out of ATMs as opposed to putting it in. Not all ATMs accept deposits. Depositing at your own bank’s ATM. There are no fees and no hassles. Whether you pay a fee for making a deposit depends on your bank and the ATM owner. Most banks join one or more of the ATM payment networks.

ATM Fees and transaction costs

Be sure to be aware of the banking fees for using an ATM, as fees will vary by bank and machine. In most cases, if your bank owns the ATM using that ATM will often result in no fees being charged or lower fees in some cases, check your banks policy to make sure what the charges since each bank sets their own fees. When you access your account with an ATM that is not part of your banks network, you will most likely have to pay fee for access to your funds.

Be especially careful if you only make small withdrawals. Most ATM fees are flat charges regardless of the size of the withdrawal. If the fee per withdrawal is $2.00, then you will be paying a rather large fee as a percentage of the cash withdrawn. In certain cases, it will more beneficial to make a single withdrawal of $200, then multiple withdrawals of $20.00 or $40.00 each with a $2.00 charge deducted on each one.

If you use the non-proprietary or foreign ATMs frequently, be aware that you may end up paying two fees. Your bank will charge a fee because it has to process a transaction from some other bank’s ATM, and the bank that owned the ATM will charge a fee — called a surcharge — because it has to process a transaction from someone who’s not a customer. It’s a double whammy, and it’s very costly.

High fees for convenience

You’ll always know if you’re going to be surcharged because a statement is displayed on the ATM screen before you press the key to get cash. You’re given the option of continuing with the transaction or canceling it. In reality, probably very few people decline the transaction at that point. That’s why it’s so important to be certain you have cash on hand for planned and unplanned minor expenses.

Using your own banks ATM machines is one way to avoid the high fees associated with frequent ATM usage. Another method is use your debit card to make purchases and request cash back at the same time from merchants that offer the convenience without charge.

Debit Cards, ATM Cards and Credit

Most all banks will now offer an ATM card with a bank account. These cards now will frequently work as a debit card as well. A debit card is like having an ATM card that works like a credit card or more accurately, works like and electronic check. Like writing a check, debit cards can be used to pay for products and services but do not advance you any credit. When you use your debit card, the cost of any transaction is taken out of your checking account and transferred to the account of where you made the purchase. The deduction for the cost or price of your transaction from your account may be done immediately or there may be a slight delay depending on how the transaction is processed. Unlike a credit card, where you pay for your purchases once a month when you receive a statement, purchases paid for with a debit card are deducted directly from your checking account without a follow up statement.

There are several different types of ATM and debit cards available. Many cards have the same features and function the same; they simply have different names so banks can market their products to distinguish them from the competition. Intentional marketing confusion has not passed the bank industry by.

ATM Safety and Personal Identification Numbers

The automated teller machine (ATM) has been around for a while, and it’s made life easier for consumers. Even with their ubiquitous use and placement, don’t overlook security issues when you use them. Safety is still extremely important when using the ATM. But we shouldn’t get so comfortable with them that we ignore commonsense behavior.

Before you use your ATM, know how much money you have in your account and review bank statements carefully. Remember, the available balance you see on an ATM receipt may be misleading if you have written checks that haven’t cleared your bank yet. Rely on your checkbook register balance, not the ATM receipt balance. Don’t forget to record your ATM and debit card transactions into your account register as soon as possible. Without accurate records of your ATM uses you may be leaving yourself open to overdrafts and overdraft fees. Hold on to your ATM receipts and debit card sales receipts in one place so you know where to find them for your records and for your account reconciliation.

When using a debit card for purchases, check the purchase amounts on the sales slip before you sign it. Do not sign the receipt if the amount is different than the amount you owe. Compare the bank or credit union’s statements to your sales slips and receipts. Whenever there are any withdrawals or debit card purchases that are not yours, contact your financial institution right away.

When you are going to do a deposit at an ATM, have all the necessary paperwork ready. If possible have deposit envelopes with you so you can spend as little time as possible at the ATM.

ATM Card Safety

If your ATM card is ever lost or stolen, report it immediately to your bank.

Protect your ATM card from damage by keeping it in a safe place that protects it from easy theft and physical damage that will impair its use.

Sign you card on the signature panel as soon as you receive it.

Protect your ATM cards as if they were the equivalent of cash. Do not leave them unattended anywhere.

Get your card back after every purchase.

Be very careful giving your debit card number over the phone, unless you are dealing with a reputable company, or you have initiated the call yourself.

Personal Identification Number (PIN) Safety

Keep your PIN number a secret, and do not disclose it to anyone. No one from a financial institution, the police, or a merchant should ask for your PIN. You are the only person who should know it.

When selecting a PIN choose a PIN that is unique. Do not use your obvious numbers or letters that would be easy to guess should your personal information be compromised. Avoid the use of initials, birth date, telephone number or social security number.

Memorize your PIN. If you must write down your PIN, do not keep your PIN on a piece of paper in the same location as your ATM card. Do not write your PIN number on your ATM card.

Safety Using an ATM Machine

Look around the area and quickly observe the surroundings. If a machine is poorly lit or looks unsafe, find another ATM.

Have your card ready. Fill out your deposit slips before you reach the ATM.

Cancel your transaction and leave immediately if you see anything suspicious.

Do not let anyone see you enter your PIN.

Do not stand around and count your cash openly at the ATM. Wait until you are in a convenient, safe place. If the amount of money you get from the ATM is different than the amount you asked for, contact your bank or credit union immediately. Being at the machine will not facilitate the error but make sure to identify the machine that you used.

When your transaction is complete make sure you wait for your card and receipt before you leave. Don’t throw them in the trashcans or even at home without completely destroying them.

This entry was posted on Sunday, October 12th, 2008 at 11:36 am and is filed under Banking and CD Guide. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.