Why Do Banks Charge Money for Using Their ATM Machines?

An ATM or Automated Teller Machine is a convenient way to get money using a debit card; however, the fees that banks charge for withdrawing money can become expensive.


ATMs frequently charge fees to users who are not account holders of the financial institution for withdrawing or depositing money as well as performing balance inquiries. The average ATM fee ranges from $1.50 to $2, according to Bankrate.com.


One of the reasons that banks charge fees is to compensate for the costs associated with owning and operating the machine. Each ATM transaction costs a bank around 27 cents, according to StopATMFees.com.


Whenever you use your ATM card at a financial institution other than the one that houses your accounts, your bank has to pay the other bank a fee known as interchange, which is between 30 cents and 65 cents. Another reason that banks charge fees to non-account holders is to recoup some of the money they must pay to other banks for interchange.

Fee Revenue

Like other types of businesses, banks and other financial institutions must be profitable in order to remain in business. Fee revenue from ATM transactions is one way for banks to make money.


Many banks partner with other local banks or nationwide networks, agreeing not to charge foreign ATM fees to each other's clients. If your bank does not participate in a similar program or if you are not near any free ATMs, considering using your debit card at a discount or grocery store and asking for cash back as this usually does not charge a fee.