2010 Checking Study
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Banks taking a bigger bite with ATM fees

Rising ATM fees have become as predictable as long lines at an Apple Store when a new iSomething is launched. In fact, the average ATM surcharge has risen every year but one since Bankrate conducted its first checking study in the waning years of the Clinton administration. This year was no exception. ATM patrons now pay an average of $2.33 to use an ATM, up from $2.22.

Unless you're a customer of the bank that owns the ATM, you can be pretty sure you'll pay that $2.33 fee. Bankrate's 2010 Checking Study found that 99.1 percent of ATMs charged a fee to noncustomers, a few ticks above the 98.7 percent that charged a fee last year.

But the ATM surcharge isn't the only fee you can expect to pay when you take out money these days. Your own bank will likely stick you with a fee for going outside its ATM network. This year, 75 percent of checking accounts are charging such a fee, up from 72.3 percent last year.

The fee those customers will pay also rose, inching up 9 cents, from $1.32 to $1.41, according to Bankrate's 2010 Checking Study.

For example, say you're out and need cash, but you can't find an ATM for your bank, Fat Fee Capital. The only ATM nearby is owned by Gouge Bank and Trust. When you take money out of that ATM, you won't just pay a surcharge to Gouge Bank and Trust for the use of its ATM. When you get your monthly statement from Fat Fee Capital, you'll also see a fee for going outside of its ATM network.

Between those two ATM fees, you'll pay a total of $3.74 to make an ATM withdrawal outside your bank's ATM network. That should make you think twice about withdrawing a small amount from such an ATM. If you withdraw $20, that $3.74 amounts to nearly 19 percent of your withdrawal -- a pretty hefty share.

ATM surcharge fees
ATM surcharge fees

Instead, says Greg McBride, CFA, senior financial analyst for Bankrate.com, you can avoid those additional charges by planning your cash withdrawals to coincide with the rest of your weekly banking business. Taking out your cash once a week can not only help you budget more effectively, it also helps you avoid throwing away good money on ATM fees, he says.

Bert Ely, a banking consultant and principal at Ely & Co. in Alexandria, Va., says the alternative is to do some shopping around and find one of the small but significant number of checking accounts that will pay all ATM fees for you. These provide credits to your account to compensate you each time you incur an ATM charge. Although it's a significant cost, some institutions offer the no-ATM-fees perk as a way to set themselves apart and cultivate a younger customer base, Ely says. The perk is especially useful for frequent travelers who often find themselves outside the reaches of their bank's ATM network.

Average fee to use other ATMs
ATM surcharge fees

"I can go anywhere in the country and pop money out of an ATM and it doesn't cost me anything," Ely says. "The bank absorbs the charge."

View infographic

But if you only incur the occasional ATM fee and don't want to change accounts, there's an ad hoc alternative. You can simply get cash back in a debit transaction when doing your grocery shopping or picking up prescriptions at the pharmacy. This method works if you're out and need to get money in a pinch. Buying a 75-cent candy bar and getting cash back is still cheaper than paying $3.74 -- and you get a candy bar.

Bankrate's 2010 Checking Study data are gathered by surveying the top 10 banks and thrifts in 25 of the country's biggest markets. We asked those institutions about terms on one generic noninterest account and one interest-bearing account most applicable to the general consumer.

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