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Ask the expert: How do I reduce my ATM fees?

July 21, 2011

By Richard Barrington | MoneyRates.com Senior Financial Analyst, CFA

Q: I added up my ATM fees on my last monthly bank statement, and I was shocked to find that I paid more than $20 in fees. Over the course of the month, I only withdrew about $400, so this means it cost me about 5 percent just to access my money. How can I find a bank that won't take such a big bite out of my checking account?

A: You should look for a checking account with lower ATM fees, but chances are that's only part of the answer.

There are two sources of ATM fees: your bank, and the operator of the machine. You can address the first kind by looking for a checking account with low ATM fees. You should be able to find banks that charge nothing for ATM transactions within their own ATM network, and that leads to addressing the next kind of fee. If you frequently find yourself using an ATM outside of your bank's network, then you will be paying a fee to the machine's operator. This will be expensive enough if those are bank ATMs, but it will be even more expensive if you use ATMs in locations like convenience stores.

The answer, then, is to look for a bank that not only has low ATM fees, but which also has an extensive ATM network in your area. Then, get in the habit of using machines in that network.

Speaking of habits, you may also be making too many small ATM transactions. If you can avoid ATM fees by finding a checking account with no charge for in-network fees, then this doesn't matter. Otherwise though, you may want to consolidate some of those transactions. A smaller number of larger transactions will reduce the percentage of your withdrawal that the ATM fee represents.

Got a financial question about saving, investing, or banking? MoneyRates.com invites you to submit your questions to the "Ask the Expert" feature. Just go to the MoneyRates.com home page and look for the "Ask the Expert" box on the lower left.

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