What Is an ATM and How Does It Work?

An ATM, or automated teller machine, is a self-service machine that lets you access certain banking services without speaking to a teller.

You can usually withdraw cash, check your balance and complete other basic transactions using a payment card and personal identification number, or PIN.

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What Does ATM Stand For?

ATM stands for automated teller machine.

It is designed to complete some of the transactions you might otherwise handle at a bank branch.

Depending on the machine and your financial institution, an ATM may allow you to:

• Withdraw cash

• Check your account balance

• Deposit cash or cheques

• Transfer money between accounts

• Change your PIN

• Print account information

Not every ATM offers every feature.

How Does an ATM Work?

When you insert or tap your card, the ATM reads information associated with it.

You then enter your PIN to verify that you are authorized to use the account.

If you request a cash withdrawal, the ATM sends the transaction through a payment network to your financial institution.

Your financial institution checks:

• Whether the card is valid

• Whether the PIN is correct

• Whether you have enough available funds

• Whether the transaction is within your withdrawal limit

If the withdrawal is approved, the ATM dispenses the cash and your account is debited.

Where Does the Cash Inside an ATM Come From?

ATMs store physical banknotes inside secure cash cassettes.

Banks and ATM operators regularly replenish the machines based on expected withdrawal volume.

The amount of money inside varies significantly depending on the machine and location.

Can You Deposit Money at an ATM?

Some ATMs accept deposits.

Depending on the machine, you may be able to deposit:

• Cash

• Cheques

Modern ATMs may count cash automatically or scan deposited cheques.

Your financial institution may place a temporary hold on some or all of the deposited funds before making them available.

Do ATMs Charge Fees?

Sometimes.

You may be charged a fee when using an ATM that is not operated by your financial institution or its network.

Possible charges include:

• A fee from your financial institution

• A surcharge from the ATM operator

• Foreign exchange costs when withdrawing money abroad

The amount depends on your account, financial institution and the ATM you use.

Using an ATM within your financial institution's network can often help reduce fees.

What Is an ATM Withdrawal Limit?

Your financial institution may limit how much cash you can withdraw from an ATM each day.

The limit is usually based on your account and card rather than how much cash the ATM physically contains.

For example, an ATM may have thousands of dollars available while your card has a daily withdrawal limit of only a few hundred dollars.

Limits can help reduce losses if your card is lost or stolen.

Can an ATM Keep Your Card?

Yes.

An ATM may retain a card in certain situations, such as:

• Several incorrect PIN attempts

• A damaged or expired card

• A technical problem

• A card that has been reported lost or stolen

If this happens, contact the ATM operator and your financial institution.

Are ATMs Safe to Use?

ATMs are generally safe, but you should take basic precautions.

Before using one:

• Check the card slot for anything unusual

• Cover the keypad when entering your PIN

• Avoid accepting help from strangers

• Use ATMs in well-lit locations

• Review your account for unfamiliar transactions

Criminals can sometimes use devices known as skimmers to steal card information.

If the ATM looks damaged or unusual, use another machine.

What Happens If an ATM Doesn't Give You Your Money?

Occasionally, an ATM may approve a withdrawal but fail to dispense the correct amount of cash.

If that happens:

1. Keep the receipt if one was provided.

2. Note the ATM location and time.

3. Check whether your account was charged.

4. Contact your financial institution.

Your financial institution can investigate the transaction and determine whether an adjustment is required.

Can You Use Any Card at Any ATM?

Not necessarily.

Your card must be supported by the ATM's payment network.

Most debit and prepaid cards display network logos that indicate where they can be used.

When travelling internationally, check whether your card supports overseas ATM withdrawals and what fees may apply.

What's the Difference Between an ATM and a Bank Teller?

A teller is a bank employee who can help with more complicated transactions or account questions.

An ATM is automated and designed primarily for routine transactions.

ATMs are convenient because they can be available outside normal branch hours and allow you to access cash quickly without waiting for a teller.