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At one time, the primary way to do business with a bank was by heading to a bank branch. A flesh-and-blood teller at a bank branch accepts deposits, handles withdrawals, cashes checks and undertakes many other tasks.
But in the 1960s, an invention known as the automated teller machine (ATM) made its debut. This innovation revolutionized the banking industry by letting customers withdraw cash and perform other tasks without interacting with a human teller. Today, many things that a human bank teller does can also be done at an ATM. In 2020, more than 5.1 million ATMs operated around the world.
Here’s everything you need to know about ATMs, from how they work to ATM withdrawal limits and how to use one safely.
What Is an Automated Teller Machine (ATM)?
An ATM is essentially a computer where you can check your account balance, deposit or withdraw cash and access other financial services. This machine eliminates the need to interact with a human teller for many basic banking needs. You can often take advantage of ATM services 24 hours a day, seven days a week.
How Do ATMs Work?
In most cases, you use an ATM by inserting a debit card, ATM card or credit card into a slot on the machine. Regardless of where the ATM is located, it connects electronically with your bank account via the internet or phone line.
You can find an ATM at a bank branch, a grocery store, convenience store, shopping mall, restaurant, bar or another location. If an ATM is at a bank, look for it to be owned and operated by that bank. But if an ATM is elsewhere, it could be owned and operated by a business that isn’t directly affiliated with a bank. Many nonbank ATMs are owned by the businesses where they’re housed.
Frequently, you’ll be asked to enter a PIN (typically four to six numbers) on the ATM’s keypad or touchscreen to perform a transaction. The screen on the ATM then prompts you to choose which type of transaction you want to perform, such as withdrawing cash or checking your balance. If you’re withdrawing or depositing money, you’ll be asked to enter the dollar amount.
If, for instance, you decide to withdraw money, the ATM will dispense the cash and possibly a paper receipt. Some ATMs will let you receive a receipt electronically, such as by email. By law, you must be given the option to obtain an ATM receipt for any transaction over $15.
At some point during the transaction, you’ll be reminded to grab your card before stepping away from the ATM.
What’s the Difference Between a Debit Card and an ATM Card?
While a debit card and an ATM card may look the same, they’re different regarding what you can do with them.
An ATM card is used primarily to withdraw cash from an ATM; you also may be able to make deposits. This card is connected to a checking or savings account. When you make a withdrawal with an ATM card after entering your PIN, the withdrawal amount is automatically subtracted from your account.
You can do much more with a debit card than with an ATM card. You can usually use a debit card for cash withdrawals and deposits at an ATM, and you also can use it to make purchases at stores, gas stations, restaurants and other merchants. Debit cards typically can be used for both in-person and online purchases. Withdrawals and purchases are automatically deducted from the account tied to the debit card.
Chances are, your debit card displays the logo of a payment network (like Visa or Mastercard), while your ATM card does not.
How To Deposit Money at an ATM
Depositing money at an ATM may work differently from machine to machine. But here are some general instructions:
- Insert your card. (Don’t forget to retrieve it before you leave.)
- Enter your PIN.
- Choose the “deposit” option on the ATM screen.
- Pick the type of deposit (cash or check).
- Insert the cash or check into the machine.
- Follow the ATM’s on-screen instructions for completing the deposit.
Many ATMs, but not all, accept cash deposits.
How To Withdraw Money From an ATM
Withdrawing money at an ATM also may work differently from machine to machine. But here are some general instructions:
- Insert your card. (Don’t forget to retrieve it before you leave.)
- Enter your PIN.
- Choose the amount of cash you want to withdraw.
- Take the cash from the ATM’s cash dispenser.
- Follow the ATM’s on-screen instructions for completing the withdrawal.
What Are ATM Withdrawal Limits?
When you withdraw cash at an ATM, you may find that you can take out only a certain amount of money. This is because many banks impose what’s known as a daily withdrawal limit. Daily ATM withdrawal limits vary by financial institution, but generally range anywhere from $300 to $5,000 or more. There may also be exceptions to the limits, based on the account type and your banking relationship.
Among other reasons, you could encounter an ATM withdrawal limit because the bank wants to ensure the machine doesn’t run out of cash. Perhaps more importantly, an ATM withdrawal limit helps protect your account from a thief’s siphoning money from your account (beyond the limit) after stealing your debit card and PIN.
Can an ATM Be Contactless?
Yes, an ATM transaction can be contactless.
Rather than inserting your card and making “contact” with the ATM, you may be able to carry out a contactless transaction. You can do so if both your card and the ATM display the contactless symbol, which is a collection of four curved lines that each appears to be a parenthesis. The symbol resembles a wave or a Wi-Fi symbol turned sideways. If your card and your ATM are equipped with contactless capabilities, you can tap the contactless symbol or hold your card close to the symbol rather than inserting your card into the machine.
Among other benefits, a contactless card provides strong security and lets you avoid touching the germ-covered surfaces of an ATM.
What Is Cardless ATM Access?
Some ATMs let you perform cardless transactions.
Cardless ATMs let you take out money and perform other transactions without swiping your card through a card reader or inserting it into a card reader. Rather than relying on cards, these ATMs use different kinds of technology, such as verification codes or fingerprints, to connect a mobile app on your phone to an ATM. Once you go through some security steps, you’ll be able to transact business at the ATM as if you were using a physical card.
What Fees Do ATMs Charge?
When you use an ATM within your bank’s or credit union’s ATM network, you usually don’t get hit with fees. However, when you use an ATM that’s outside your bank’s or credit union’s network, you could incur two fees: one from your bank or credit union and another from the operator of the out-of-network ATM. These out-of-network ATM fees vary by financial institution but may range from $3 to $7.
In some cases, your bank or credit union will reimburse you for ATM fees that you’ve been charged. For instance, your financial institution may reimburse you for a certain number or dollar amount of out-of-network ATM fees each month. Or, better yet, they may not charge any ATM fees at all.
You also may be charged fees for using an ATM in another country. These foreign ATM fees can be hefty—usually 1% to 3% of the transaction amount.
Where To Find an ATM
There are several ways to find an ATM, which is especially important if you’re looking for one to use fee free. Here are three ways:
- Check the ATM locator within your financial institution’s mobile app.
- Search online for ATMs near you—both Visa and Mastercard have ATM locator features on their websites, for instance.
- Call your bank or credit union.
How To Use an ATM Safely
While most of us can use an ATM without having anything bad happen, some criminals prey upon ATM users. Here are six tips for keeping yourself safe at an ATM:
- Use an ATM at a public place. Try to steer clear of ATMs in isolated, poorly lit spots. Instead, do your business at an ATM where there are other people around, such as a convenience store or grocery store, or where there’s plenty of light.
- Pay attention to your surroundings, particularly at night. If you see anyone or anything suspicious, use an ATM at a different location.
- When you’re at an ATM, don’t count or show the money you’ve just withdrawn. This could make you a prime target for a thief.
- Shield your PIN. Do what you can—such as using your hand or body as a shield—to prevent someone standing near you from seeing you enter your PIN.
- Be careful at drive-through ATMs. If you’re using a drive-through ATM, make sure your car doors are locked and your car windows are rolled up, and keep the engine running.
- Watch out for card skimmers. A card skimmer is a device that can be installed on an ATM to steal card numbers when cards are inserted into a card reader. It’s not easy to see a card skimmer right away. However, a card skimmer might be attached to the ATM if the card reader slot feels loose, the color of the reader doesn’t match the ATM’s color scheme or the keyboard doesn’t feel right (such as the keyboard buttons’ being difficult to press).
Frequently Asked Questions (FAQs)
Are ATMs equipped with security cameras?
Yes, most ATMs are armed with at least one security camera.
Can you deposit coins at an ATM?
No, ATMs typically can’t accept coins—only cash and checks.
Can an ATM “eat” your card?
Yes, an ATM might keep your card in certain situations. A common situation is if a card is left in an ATM’s card reader for too long. In many cases, a card kept by an ATM will be shredded.
How much money can you withdraw from an ATM?
Cash withdrawal limits for ATMs generally range from $300 to $5,000 a day, but these limits vary by financial institution, type of account and relationship with the bank or credit union.
What kinds of bills do ATMs dispense?
ATMs typically dispense bills in $20, $10 and $5 denominations.