According to Bankrate.com, ATM fees have been increasing, and currently, they are on a record high. A survey by Bankrate.com indicates that currently, the average cost for a withdrawal from an ATM is around $4.72, which is a 3.3% increase in the last three years. Since it began tracking the data in 1998, the cost has grown significantly by 33% from around $1.97.
Declining rates necessitating an increase in service fees
The Federal Reserve is to blame for the disproportionate increase. With rates declining, banks’ margins tend to shrink, and therefore, to make up for the deficient, they increase their convenience and service fees, which is passes to customers at most ATMs. The rates will most likely continue to decline, which means the fees will continue growing year after year.
Low-income people feel the impact of ATM fees, especially in neighborhoods where banks usually avoid. This drives people to take money from ATMs that are not owned by their banks. Equally saving money in the bans seems to be tough than before, considering banks have lowered interest rates paid to depositors.
Customers will pay a surcharge for using an ATM of their bank, and there is the fee most banks charge the customer for using a different machine. Currently, on average, surcharges by machine owners are at $3.09. The average fee for 67.7% of the banks that have “non-bank ATM fees” is $1.63.
Houston charging highest ATM fees
Bankrate.com surveyed 25 metro areas, and out of all those Houston had the highest ATM fee at around $5.58 while the area with the lowest ATM fees was Los Angeles at $4.15. Bankrate.com chief financial analyst Greg McBride indicated that banks have been boosting their fee income from the ATM fees. He said nobody cares about estranging non-customers.
The ATM fee is not the only bank service charge that has been increasing. Bankrate.com indicates that the overdraft fee is also on the rise, and the fee is up to $33.36 from last year. In recent years banks have been concentrating on overdraft fees, and last, they collected $34.3 billion from the same.