Definition
An automated teller machine (ATM) is an electronic banking terminal that lets a cardholder carry out routine account actions without a human teller. Common functions include cash withdrawals, balance checks, transfers between accounts and—on many machines—deposits and bill payments. A personal identification number (PIN) is used to verify the cardholder’s identity before transactions are permitted.
Key facts (short)
– First widely recognized ATM: Barclays, London, 1967; first U.S. installation: Chemical Bank, Long Island, 1969.
– ATMs are also called ABMs, cashpoints or cash machines.
– Two basic device classes: simple cash-and-balance machines and full-service units that accept deposits and handle transfers.
– There are specialized kiosks (Bitcoin ATMs) that buy/sell cryptocurrencies; roughly 28,000 such machines exist worldwide.
– Fees commonly apply for out-of-network withdrawals; a 2022 average out-of-network total fee was about $4.55 per withdrawal.
Brief history (two sentences)
The first customer-facing cash dispenser appeared in the late 1960s, and interbank networks developed in the 1970s to let cardholders use other banks’ machines. Over the next decades ATMs spread globally and are now installed in urban centers and remote locations alike.
Types of ATMs
– Basic ATM: withdraw cash and check balances only. These are typical off-site units (retail, gas stations).
– Full-service ATM: accepts cash and check deposits, lets accountholders make transfers, pay loans and view detailed account info. These are common inside bank branches.
– Bitcoin / crypto ATM: internet-connected terminals that convert cash to crypto (and sometimes crypto to cash). They function differently (and carry different fees and risks) from bank ATMs.
Common ATM components
– Card reader (chip and/or magnetic stripe)
– Keypad (for PIN and amount entry)
– Screen/display with prompts
– Cash dispenser slot and cash cassettes
– Deposit slot or envelope drop (on deposit-capable machines)
– Receipt printer
– Network link (connects the device to the bank’s or interbank network)
– Secure enclosure and safes for cash storage
How to use an ATM — step-by-step
1. Choose an ATM (preferably one operated by your bank to avoid fees).
2. Insert your debit or credit card into the card reader (chip-first where applicable).
3. Shield the keypad and enter your PIN when prompted.
4. Select the transaction type (withdrawal, balance, transfer, deposit).
5. Enter the amount and confirm.
6. Wait for the machine to process; collect your cash, card and printed receipt.
7. If depositing, follow on-screen prompts—insert checks or cash, or use an envelope if required—and keep any confirmation.
8. Leave promptly and keep receipts for your records.
How to make a deposit at an ATM
– If the ATM accepts deposits, the screen will guide you. Some machines require envelopes; others accept loose cash and checks that the machine images immediately.
– Endorse checks on the back and write “For deposit only” to the account number when recommended by your bank.
– Always get and keep the deposit receipt or confirmation number.
ATM fees and how they add up (worked examples)
– Average out-of-network fee: about $4.55 per withdrawal (2022 estimate). Source: MoneyRates.
Example A — annual cost of frequent out-of-network use: if you withdraw once per week at a machine that charges $4.55, the annual cost is:
52 weeks × $4.55 = $236.60 per year.
Example B — smaller weekly fee: if the fee is $4 and you withdraw weekly:
52 × $4 = $208 per year.
– How to reduce fees: use in-network ATMs, ask your bank for reimbursement policies, or limit cash withdrawals.
Withdrawal limits (what to expect)
Banks set maximums for cash dispensed per day or per transaction; these limits differ by institution and by account. Example calculations:
– If
If your account has a per‑day cash‑withdrawal limit, you can quickly work out how many withdrawals or how many days it will take to reach that limit.
Example calculations:
– If the daily withdrawal limit is $1,000 and your ATM dispenses $200 per transaction, you can make up to 5 withdrawals in one day before you hit the limit: 5 × $200 = $1,000.
– If your bank imposes a monthly ATM withdrawal cap of $2,500 and you withdraw $100 once per weekday (approx. 22 weekdays per month), the monthly total is 22 × $100 = $2,200 — still under the cap. But if you withdraw $150 each weekday: 22 × $150 = $3,300, which exceeds the cap; the bank may block further withdrawals or charge penalties.
– For deposit limits: if an ATM accepts cash deposits and your account has a daily cash‑deposit limit of $3,000, depositing $1,500 in the morning and $1,600 later the same day would exceed the limit by $100; the excess may be rejected or held pending branch processing.
Note assumptions: transaction denominations, machine dispensing increments, and bank policies vary. Always confirm limits with your bank.
Common ATM features and what they mean
– Surcharge: a fee charged by the ATM owner (not your bank) for using that machine.
– Out‑of‑network fee: a fee your own bank may charge if you use a non‑partner ATM.
– PIN (personal identification number): a numeric code used to authenticate transactions. Never share your PIN.
– Dynamic currency conversion (DCC): an option at some foreign ATMs to convert withdrawals into your home currency at the ATM’s rate — often more expensive than your card network’s conversion.
– Cardless withdrawal: a feature some banks and ATM networks offer allowing access via mobile app, QR code, or one‑time code instead of the physical card.
Practical checklists
Before you use an ATM:
– Check network/logo on the machine (e.g., Plus, Cirrus, Interac) to see whether it’s likely in your bank’s network.
– Look for visible skimming devices or loose parts; avoid if suspicious.
– Know your bank’s daily withdrawal and deposit limits and any out‑of‑network surcharge policy.
When withdrawing cash:
– Shield the keypad with your hand when entering your PIN.
– Take your receipt and check your account balance later (ATM balances can differ due to pending holds).
– If the ATM asks whether to accept DCC when abroad, decline if you prefer your card issuer’s exchange rate.
If something goes wrong
– ATM keeps your card: note the machine ID/location and contact your bank immediately to block the card. If the machine is at a bank branch, contact branch staff.
– Wrong amount dispensed or machine error: keep receipts and report the problem to your bank promptly. Banks typically investigate and may provisionally credit disputed amounts.
– Cash not received but account debited: report to the bank and the ATM owner; keep a record of the transaction time and ATM ID.
Security best practices (short checklist)
– Use ATMs in well‑lit, populated places.
– Avoid using ATMs at odd hours in secluded areas.
– Keep software on your phone and bank apps updated.
– Reconcile ATM receipts with online statements to spot unauthorized transactions early.
Alternatives to frequent ATM withdrawals
– Use debit card for purchases (reduces need for cash).
– Use bank teller services for large cash needs (may avoid ATM limits).
– Consider linked accounts or cards at partner banks with fee reimbursement.
Worked numeric example — minimizing annual ATM cost
Suppose:
– Your bank reimburses up to $12 per month for out‑of‑network fees.
– You make 30 out‑of‑network withdrawals per year with an average surcharge of $4.55.
Without reimbursement:
– Annual cost = 30 × $4.55 = $136.50.
With reimbursement (assuming you use it fully every month):
– Monthly reimbursement = $12 → annual reimbursement = 12 × $12 = $144.
– Net annual ATM surcharge = max(0, 136.50 − 144) = $0 (you are fully reimbursed; excess reimbursement does not carry value).
This example assumes your bank reimburses automatically and the reimbursements apply to all surcharge types — check your account terms.
Quick FAQ
– Can I deposit checks at an ATM? Many banks allow check deposits at ATMs, but availability of funds may be subject to hold policies. Check Reg CC summaries or your bank’s funds‑availability schedule.
– Will my PIN work at foreign ATMs? Usually yes, but some countries expect 4‑digit PINs; longer PINs may be rejected by older machines. Contact your issuer before travel.
– How do I find fee‑free ATMs? Use your bank’s ATM locator tool (online or app) or network locators (e.g., Visa, Mastercard).
Further reading and official sources
– Consumer Financial Protection Bureau (CFPB) — “Deposits and withdrawals” guidance and rights: https://www.consumerfinance.gov
– Federal Deposit Insurance Corporation (FDIC) — ATM safety and fraud resources: https://www.fdic.gov
– Visa — ATM and foreign currency withdrawal information: https://usa.visa.com
Educational disclaimer
This information is educational and not individualized financial advice. Rules, fees, and protections vary by bank, country, and account type. Contact your bank for account‑specific information and the relevant authorities for legal guidance.