ATMs: How Automated Teller Machines Work

An ATM is an automated teller machine that allows you to deposit and withdraw cash anytime, without needing to visit a bank during business hours.

Young man is withdrawing money from an ATM

An automated teller machine, or ATM, is a convenient way to access money almost anywhere you go. But not all ATMs are created equal. Here’s what you need to know about ATMs before you use them.

What is an ATM?

ATMs are electronic, self-serve banking terminals that allow you to access your money in a bank or credit union account and carry out transactions 24 hours a day without having to visit a branch in person.

Canada has more than 18,000 that are owned and operated by banks. Additionally, private companies operate thousands of “white-label” ATMs, generally located in bars, restaurants and stores across the nation.

What‘s the meaning of ‘ATM’?

“ATM” stands for automated teller machine. ATMs may also be called ABMs or automated banking machines. This technology, which has been in Canada since the late 1960s, has evolved to include more options than simply dispensing small amounts of cash — sometimes paralleling those offered by bank tellers.

What services does an ATM provide?

Withdraw cash

The most common service ATMs provide is allowing you to use your debit card and PIN to take out cash from your chequing and savings accounts. If you’re using your bank’s ATM, it may also allow you to withdraw from your line of credit.

Although you can also use your credit card in an ATM to take out cash, called a cash advance transaction, may come with significant fees.

Many ATMs allow you to choose the denomination of the bills, so for a $100 withdrawal, you could get one $100 bill or five $20 bills. Some machines even save your most commonly withdrawn amounts for one-touch access. And some Canadian ATMs also dispense U.S. dollars.

Deposit money

Machines owned by your financial institution, or its partner banks or credit unions, via a network, usually allow you to deposit money into your bank account in cash or by paper cheque.

Check account balance

If you’re using an ATM owned by your financial institution, you can check your account balances and recent activity for your chequing, savings and credit card accounts, as well as any lines of credit.

Transfer money between bank accounts

You can visit an ATM to move money between your bank accounts, such as your chequing account and a savings account or loans.

Pay bills

Your financial institution’s ATM often offers a bill payment option for payees you have registered or linked to your chequing account, such as your credit card.

Change your PIN

You can change your debit card’s personal identification number (PIN) at an ATM owned by your financial institution.

ATM fees and limits

The convenience factor of using these machines often comes with fees.

Types of ATM fees

Regular account fee

The monthly fee for your chequing account usually covers a certain number of transactions per month, whether you use your debit card at a retailer’s point of sale or the ATM. If you exceed this number of transactions, you’ll usually incur a fee.

For example, the RBC Day to Day chequing account includes 12 debit transactions each month. If you use your debit card at an ATM or elsewhere more than 12 times in a month, you’ll be charged $1.25 for each additional transaction.

Network access fee

If you’re withdrawing funds from another bank’s ATM, where you don’t hold an account, you likely will be charged a network access fee by your own financial institution. Some banks waive fees on a certain number of such transactions per month for their customers.

Convenience fee

Using another bank’s ATM will also come with a surcharge from the institution that owns the ATM for the privilege of using its machine. The convenience fee, also called a non-customer surcharge, can be higher for white-label ATMs operated by private companies.

How to avoid ATM fees

An easy way to avoid ATM fees is to withdraw money from ATMs owned and operated by your bank or the network your bank or credit union belongs to, such as The Exchange Network or Acculink. Internationally, some banks are members of organizations like the Global ATM Alliance. This means you won’t pay access fees when you take out cash at certain ATMs in other countries.

Another simple strategy is to plan ahead and take out more cash on fewer visits to an ATM. This tactic can minimize your number of transactions, helping you stay within the limit included in your regular bank account fee.

If you’re regularly paying extra ATM charges, you can contact your financial institution to discuss whether another type of bank account with more included debit or ATM transactions might better fit your needs.

ATM withdrawal limits

Your financial institution likely has a limit on the amount you’re allowed to withdraw via the ATM per day. This limit can vary from bank to bank and may depend on the type of account you have. It usually differs from your daily limit for point-of-sale or debit payments.

How to request an ATM withdrawal limit change

If your daily ATM withdrawal limit does not suit your needs, you can contact your financial institution to request a higher limit. You can also do it by logging into your online banking account or mobile app and changing your preferences.

For example, RBC allows cardholders to temporarily change their daily ATM withdrawal limit or their daily in-store purchase limit via online banking up to three times per calendar year for a maximum of 60 calendar days each time.

ATM withdrawal fees at major banks

Broadly, all of Canada’s major banks charge similar convenience fees when non-clients access their ATMs. And many also charge their own customers a network access fee when they withdraw money from another bank’s ATM. Here’s what you can expect to pay.

Bank Name	ATM Networks	ATM Withdrawal Fees (waived for some account types)
Royal Bank of Canada RBC	Royal Bank of Canada (RBC) and international PLUS System network ATMS.	Non-customers are charged $3.50. Customers pay an applicable debit fee on top of $2 for non-RBC ATMs in Canada, $3 for U.S. withdrawals and $5 per international transaction.
Toronto Dominion Bank	Toronto Dominion Bank TD ATMs across North America.	Non-customers pay $3.50. Customers pay $2 for non-TD ATMs in Canada, $3 for U.S./Mexico withdrawals and $5 per international transaction.
BMO Bank of Montreal	Bank of Montreal (BMO) ATMs across Canada.	Customers pay $2 for non-BMO ATMs in Canada and $5 for transactions elsewhere.
CIBC	CIBC ATM network in Canada and Plus or other Visa networks globally.	Non-customers pay up to $5. Customers pay $2 for non-CIBC ATMs in Canada, a 2.5% admin fee on top of $3 for U.S. withdrawals and $5 per international transaction.
Scotiabank	Scotiabank ABMs in Canada and Global ATM Alliance ABMs worldwide.	Non-customers pay $3. Customers pay $1.50 in Canada, $3 for U.S. withdrawals and $5 per international transaction.
National Bank of Canada	National Bank ATMs, Accel, THE EXCHANGE and Allpoint networks in Canada and around the world.	Customers pay up to $1.75. Transaction fee for Interac is $2, $5 for Cirrus and $0 for THE EXCHANGE Network.

Yes, you can use a credit card to withdraw money from an ATM. However, your credit card provider will likely charge a cash advance fee for the transaction. This fee can be a fixed amount or a percentage of the amount you withdraw, for a maximum of $9. Plus, the amount will immediately start accruing interest on your credit card. If you use an out-of-network ATM, the operator may charge a one-time fee, typically $2 to $5.

Some Canadian ATMs allow customers to withdraw U.S. currency, but the vast majority don’t allow the deposit of foreign cash. Some ATMs do accept deposits of U.S. cheques, such as CIBC machines.