An explanation of automated teller machines (ATMs) and how to operate them

With the use of a specialized computer known as an automated teller machine (ATM), you can conduct financial transactions without a bank representative being present. Numerous ATMs are easily accessible day or night and can be used for a variety of purposes, including checking account balances, making deposits or withdrawals, and transferring funds between accounts.

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What is an Automated Teller Machine?

Cash is dispensed by ATMs, which also let you conduct other banking operations. A screen, a card reader, a keypad, a cash dispenser, and a printer are the standard components of an ATM.

There are ATMs everywhere in the United States and the rest of the world. While off-premise ATMs are frequently available at locations like airports, grocery stores, and gas stations, on-premise ATMs are found at financial institutions like banks and credit unions.

Inserting your bank-issued ATM card, entering your personal identification number (PIN), and following the on-screen instructions are the only steps involved in using an ATM to complete your desired transaction.

The first ATM was allegedly unveiled at a Barclays branch in London in 1967. ATMs were first made available to the general public in the 1960s. Customers of Chemical Bank in New York were the first in the country to receive cash from an ATM when it opened in 1969. More than 450,000 ATMs were in use in the nation by the end of 2022, according to data from research firm Euromonitor International.

ATM transaction examples

A few typical banking operations that are frequently completed at an ATM are as follows:

Taking out money

Withdrawing money from an ATM is the most popular ATM transaction. Usually, banks set daily maximums on the amount that can be withdrawn. This sum can differ between accounts provided by a single bank as well as between banks.

Making a deposit

Cash or checks can frequently be deposited by account holders using an ATM. You will be required to place the money into a slot on the machine in order to complete this kind of transaction. The bank occasionally might not give you access to the funds after a check deposit until the check has cleared.

Money transfers

You might be able to move money between your bank accounts using an ATM. For example, you can usually choose the “transfer” option at the ATM to move $200 from your savings account to your checking account. You can use your bank’s website or mobile app to transfer money between accounts, just like you can with balance inquiries.

Balance queries

To see the balance on your account right now, you can also go to an ATM. If you want to know how much you can spend when using your debit card or writing a check, this feature might be useful. Alternatively, you can access your account balance by visiting the website or mobile app of your bank. Being aware of your balance will help you avoid overdrawing or overspending.

While it’s typically not possible to view your entire account statement, some banks do let users utilize ATMs to view a brief summary of their most recent transactions.

Things to avoid when using ATMs

ATM costs

Fees may be assessed by both your bank and the bank that owns the ATM if you use one that is not part of your bank’s network or is not owned by your bank. According to the survey, checking account and ATM fee study, the combined average fee is currently at a record high of $4.73.

Only using ATMs within your bank’s network and asking for cash back when making purchases at grocery stores or other retailers are two strategies to avoid ATM fees.

Limits on ATM withdrawals

Banks place restrictions on the daily amount of money you can withdraw from an ATM. In the unlikely event that someone obtains your ATM card and knows your PIN, this can help prevent fraud. Furthermore, since each ATM has a finite amount of money in it, restricting the amount per withdrawal enables the bank to control the flow of cash.

Location and security

Using ATMs in well-lit public areas is one way to prevent becoming a victim of crime when using them. To keep people from seeing you type your PIN, shield yourself with your hand or body. When you receive your cash, wait to count it at the ATM; better yet, wait to count it in a more private place, like your car.

In summary

With the convenience of 24/7 access to cash, ATMs frequently eliminate the need for in-person meetings with bank representatives or teller services. They frequently allow you to deposit money, check your balance, and move money between accounts. As long as you know about things like withdrawal limits and how to avoid paying out-of-network fees, ATMs are quick and simple ways to get your cash more easily accessible.