ATM fees hit a new record

ATM taxes rose for the fourth year in a row to hit yet another record high.

The combined average ATM fees for an out-of-network withdrawal, which includes the fee you pay to your bank and the surcharge applied by the ATM owner, hit $4.77 — the 19th all-time high, according to a Bankrate. (TARIFF) study released on Wednesday.

“If you make an out-of-network ATM withdrawal, expect to pay and pay more than ever before,” Bankrate said (TARIFF) chief financial analyst Greg McBride in a statement. “Fees have gone up again and you’ll usually pay two fees – one to the ATM owner and one to your own bank.”

ATM fees are charged on each transaction when you withdraw money from an out-of-network ATM. On average, banks charge $1.58 when you withdraw cash from an external ATM. That figure was unchanged from last year and remains 8% below a peak of $1.72 in 2017.

But ATM owners have continued to collect what they charge cardholders from other financial institutions who use their machines. In another record, the average ATM surcharge charged by ATM operators is $3.19, setting the 23rd highest level in Bankrate’s 26 years of surveys.

To avoid hefty fees, McBride recommends making cash withdrawals exclusively at in-network ATMs or requesting cash back when using a debit card. The Bankrate survey includes 10 banks and thrifts in 25 major U.S. markets.

It’s not just ATMs that hit consumers’ wallets. Overdraft fees — the fees financial institutions charge when a transaction sends a checking account into the red — also rose an average of 1.7 percent from last year to $27.08. About 94% of accounts still charge overdraft fees.

As part of the Biden administration crackdown on unwanted taxesThe Consumer Financial Protection Bureau proposed a rule in January to cap overdraft fees at some of the largest U.S. financial institutions. The agency said the move would save consumers $3.5 billion or more in taxes a year.

In the meantime, McBride said the best way to avoid these fees is to link a checking and savings account, so any shortfall is covered by personal funds rather than the bank’s.

Consumers are seeing some relief when it comes to non-sufficient funds (NSF) fees, which are charged when a customer doesn’t have the funds to cover a transaction. They fell 11% from $19.94 last year to a new record low of $17.72, according to Bankrate. More than a third of accounts don’t even charge an FSN fee.