An automated teller machine, or ATM, is a self service banking terminal that lets customers withdraw cash, deposit checks, check balances and move money between accounts without ever talking to a teller. More than 4 million of these machines now operate worldwide, and nearly all of them charge a fee if you step outside your own bank's network.
At a Glance
- ATMs let customers withdraw cash, deposit funds, and check balances without a teller.
- Out of network withdrawals averaged $4.55 in total fees in 2022, according to MoneyRates.com.
- Barclays installed the first ATM in London in 1967; Chemical Bank brought the technology to the US in 1969.
- Daily withdrawal limits vary widely by bank, from around $300 to $1,500 or more.
- Bitcoin ATMs, now numbering over 28,000 globally, let users buy and sell crypto for cash.
How an ATM Actually Works
Every machine, regardless of brand or location, relies on the same handful of parts. A card reader scans the chip or magnetic stripe on your card. A keypad takes your PIN and lets you choose a transaction. A cash dispenser, wired to a safe inside the machine, releases bills through a slot. A screen walks you through each step, and a printer will spit out a receipt if you ask for one. Full service machines also include a slot for depositing checks or cash directly.
The process itself is simple enough that most people do it without thinking: insert the card, follow the prompts, enter the PIN, choose an amount or transaction type, collect the cash, and take the card back. Chip enabled cards transmit data to the machine much the way a barcode gets read at checkout.
Not every ATM offers the same menu of options, though. Basic machines, often the ones parked in a convenience store or bar, generally only dispense cash and report a balance. The more capable machines, typically the ones attached to a bank branch, handle deposits, transfers and bill payments, but using those advanced features usually requires being an account holder at that specific bank.
What It Costs to Use One That Isn't Yours
Using your own bank's ATM is normally free. Step outside that network and the math changes fast. MoneyRates.com found that the average total cost of an out of network withdrawal came to $4.55 in 2022, a figure that combines the fee charged by the ATM's owner and the fee your own bank tacks on. Some banks will refund those charges, particularly for customers in areas where the bank has no ATMs of its own, but that is a courtesy, not a guarantee.
Those charges add up faster than people expect. Someone withdrawing cash weekly from a $4 out of network machine would pay over $200 a year just for the privilege of accessing their own money. That is worth weighing against the convenience of a nearby machine that happens to belong to another bank.
| ATM Type | Typical Transactions | Access Requirement | Fee Risk |
|---|---|---|---|
| Bank branch ATM (own bank) | Withdrawals, deposits, transfers, bill pay | Account holder | None |
| Bank branch ATM (other bank) | Withdrawals, sometimes deposits | Any card, higher fee for non customers | High, often $2 to $5+ |
| Off site ATM (retail, gas station) | Withdrawals only | Any card | High, surcharge plus bank fee |
| International ATM | Withdrawals | Any card with foreign transaction support | Variable, plus currency conversion fee |
| Bitcoin ATM | Buy/sell crypto for cash | None, or ID verification | High, often built into exchange rate |
Withdrawal Limits and Deposit Mechanics
How much cash you can pull from an automated teller machine on a given day depends entirely on your bank and your account status there. Some institutions cap daily withdrawals at around $300, while most Citibank accounts allow up to $1,500 depending on the account type. Customers who need more can sometimes call their bank to request a temporary increase, or qualify for higher limits by keeping a larger balance on deposit.
Depositing at an ATM works differently depending on the machine. Some let you feed cash or checks directly into a slot, no envelope required. Others still expect a deposit slip and an envelope. Whichever system a bank uses, it is worth endorsing the back of any check and writing