How ATM Fee Reimbursement Works (ALLY, EVER)

As of 2016, many banks reimburse for automated teller machine (ATM) fees by keeping track of the charges incurred over a statement cycle, then electronically depositing the sum of those charges into the customer's account. Online banks, most of which do not maintain physical ATM locations and thus require customers to incur fees for using out-of-network ATMs, are leading the trend toward fee reimbursement. For customers who use ATMs regularly, fee reimbursement represents a welcome solution to years of frustration. However, most banks that reimburse ATM fees impose specific restrictions and limitations on this service. Therefore, customers need to remain aware of reimbursement program provisions.

Even in an increasingly paperless world, sometimes you simply have to pull cash from an ATM. Getting cash at an out-of-network ATM invariably results in a fee between $2 and $4. Sometimes, customers have to pay this fee twice: once to the bank that owns the ATM and again to their own bank for using an out-of-network ATM.

These fees can add up for those who use ATMs more than sparingly. Paying a fee just to access one's own money is tantamount to throwing money down the drain. Customers of online banks in particular fall prey to these fees, given online banks' lack of physical ATM locations.

In most cases, banks reimburse ATM fees at the end of each statement cycle by crediting the customer's account with the total fees the customer was charged that cycle. Since most banks issue statements monthly, customers can expect reimbursement for ATM fees once per month.

Nearly every bank that offers ATM fee reimbursement completely automates the process. Customers do not need to keep receipts or fill out paperwork. When they use an ATM and pay its bank's fee, their own bank is made aware of the fee, even if it does not impose its own fee. For example, Ally Financial Inc. (NYSE: ALLY) and most online banks do not charge their own ATM fees. Moreover, many of them have deals with other ATM owners that allow their customers to use those ATMs with no charges.

Banks tend to limit their largesse when it comes to ATM fee reimbursement. Most impose monthly reimbursement limits, while others maintain stringent conditions for getting reimbursed. For example, Ally limits ATM fee reimbursement to $10 per statement cycle. In contrast, banks from EverBank Financial Corp. (NYSE: EVER) and E-Trade Financial Corp. (NASDAQ: ETFC) require $5,000 minimum daily average balances to qualify for ATM fee reimbursement.

One notable exception is the Bank of Internet Federal Bank, a subsidiary of BofI Holding Inc. (NASDAQ: BOFI), rewards checking account. This account offers unlimited fee reimbursement from any ATM in the United States. Best of all, customers get reimbursed the next day, not at the end of their statement cycle.