How To Avoid ATM Fees

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Few things burn me more than being charged an ATM fee for withdrawing my own money… so I developed a system that enables me to avoid ATM fees altogether – here’s how I do it.

Use banks with no atm fees

When considering a new bank or credit union, look for one that doesn’t charge ATM fees.  If they do charge fees be sure they have a system in place that allows you to avoid being charged the fees such as belonging to a nationwide ATM network.

Betsy and I use Capital One 360 for our main checking and savings accounts and have been able to completely avoid ATM fees.  Capital One 360 is a member of the All-Point Network of ATMs giving us access to our cash at any Target store nationwide, along with many other locations in every part of the country.  If we need to hit up an ATM we can always find something close.

If you’re interested in Capital One 360, you can read more about their checking accounts here and more about their savings accounts here… or you can read my Capital One 360 review.

Update: Shortly after publishing this article Ally Bank contacted me to let me know that they reimburse all ATM fees our customers incur in the United States, including those charged by other banks!  If you’re interested you can read more about Ally Bank’s Fee-free interest checking here and more about their savings accounts here.  I also endorse them and have noticed they’ve really stepped up their focus on customers over the last few years.

If you are not looking for a new bank then you can employ the final two tactics to avoid or greatly lessen your ATM fees.

Use a cash envelope system

Back in November of 2009 Betsy and I attended Dave Ramsey’s 13 week Financial Peace University course – at our local church – which inspired us to adopt a cash envelope system for several specific budget categories.  For our situation we decided using cash would work best for:

  • Groceries
  • Dining out
  • Entertainment
  • Clothing
  • Miscellaneous

These categories may not be best for everyone so be sure to figure out what works best for you.

We each carry our own cash and manage it in a way that works best for us.  Betsy carries and uses the Dave Ramsey cash envelope organizer that came with our FPU kit, while I stick to a much simpler system of keeping a wad of cash in my wallet and journalling each transaction to keep track of each category.

I only recommend keeping all your cash together if you journal the spending; otherwise you can easily spend much more in a certain category than allotted.  If you’re not going to journal the activity it’s best to keep the cash separate for each category.

Withdraw money once per month

To avoid fees, simply withdraw your cash envelope money once each month rather than hitting up an ATM every time you need money.

Here is a detailed breakdown of how much Betsy and I use for each category:

  • Groceries – Betsy gets $260, Matt gets $100
  • Dining out – Betsy gets $40, Matt gets $20
  • Entertainment – Betsy gets $40, Matt gets $20
  • Clothing – Betsy gets $60, Matt gets $20
  • Miscellaneous – We both get $100

If you do the math you’ll see that we need $760 total, so at the beginning of the month Betsy and I head over to Target and withdraw the entire amount.  You may have noticed that she carries a bit more in several of the categories than I do; that’s because we’re usually together and it works out best for us.  I carry my own grocery money for when I have to run to the store by myself to pick up a few odds and ends.

It’s also worth noting that Capital One 360 has a $1,000 daily ATM withdrawal limit; keep that in mind if you use or plan to use Capital One 360.  Otherwise be sure your cash envelope amount fits within the daily ATM withdrawal limit of your bank.  If the amount needed exceeds the daily limit simply go to the ATM twice each month, once in the beginning of the month and once in the middle.

What tactics do you employ to avoid paying ATM fees?

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1 Thomas

Hey Matt,

I’m right up there with you. I loathe and despise ATM fees!

My wife and I bank at a local credit union that subscribes to the credit union shared banking (CUSB) and the Co-Op financial services networks. This means we can access surcharge-free ATMs at ANY credit union that subscribes to CUSB or any ATM that is a part of the Co-Op network (all 7-eleven stores, Costco and more). This helps us avoid ATM surcharges roughly 95% of the time. The other 5%, which is usually when we go to festivals or the farmers market, we just plan ahead and hit an ATM on our way out or at some point earlier in the week.

One tactic that just came to mind, though I have never had to employ it myself, is as follows: If you are forced to use an ATM that has a surcharge, estimate how much money you think you’ll need, then add an extra $20 to $100 to the total. This will reduce the chance of you needing to return to the ATM to get more cash later on. You can always redeposit the cash later on or hold it aside for use next month. Of course, this tactic only works if the surcharge is a fixed amount for each transaction.

God bless,

2 Matt Jabs

Good stuff Thomas… perhaps you can look into implementing cash envelopes and once/month cash withdrawals? 🙂

3 Thomas

Good point. It never really occured to me that I could use a partial cash envelope system along with budgeting software.

4 Matt Jabs

Yeah, that’s what we do and it works great.

5 Geoffrey

My credit union is also part of a network that offers surcharge-free ATMs. There’s enough of them that there is a convenient location pretty much anywhere in town.

6 Thomas Brown

Schwab checking also refunds all ATM fees including those from other banks. I’ve had their checking account for 2-3 years based on Ramit Sethi’s advice and I’ve loved it.

7 Matt Jabs

Thanks for the tip… I use Schwab for my IRA’s.

8 Paul

My credit union is fee free. I love it.

9 Matt Jabs

Gotta love free.

10 Chris @

Instead of going to a random bank and getting charged a fee I will go to a Walmart/Target/Meijer/etc and buy something simple like a pack of gum (or something i actually need at the time) while doing a debit transaction to get cash back.

11 Matt Jabs

Solid Chris… thanks for the tip.

12 Kal

I definitely recommend the envelope method. Works great with kids also. Gives them a visual way to track their saving and spending that you don’t get with a bank account. Little kids like it as much as us big kids.

13 Hunter

Thankfully my credit union does not charge any fees, as long as I use their ATM’s. It can be challenging making that happen, but it’s well worth making the effort to plan ahead.

14 Emily

I never use an ATM. DH does, but since we use a credit union rather than a bank, there is never a fee.

15 Paula @

I only use ATMs when I travel overseas, and in that time, I use my Schwab card. Schwab refunds all ATM fees. It also — as a bonus — sends you postage-paid envelopes, plus free return-address labels, that you can use to deposit a check into your Schwab account through the mail.

16 Mogul

I like this idea, but doesn’t carrying a lot of cash around make you feel nervous?

17 Matt Jabs

We don’t carry a lot, just a few hundred.

18 Mogul

I guess that’s not too crazy. I tend to feel nervous if I’m carrying more than 500.

19 Stanislav


Its a good article, but I there are 2 important items you skipped.

1) One can use a national bank, like Bank of America, and simply go to their ATMs.
2) Use a credit card + discipline.

On the subject of discipline, for (2), one can apply for a credit card like AMEX Fidelity Retirement Rewards card, which gives back 2% of all money you spend, without limits, forever, on everything. That 2% discount on every single thing you buy + relentless discipline has paid for many vacations in the last 3 years I’ve been a dedicated user. Even though the card makes it sound like it is for retirement, that is nonsense – you can get checks by mail or deposits straight into your checking account.

Happy saving.

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