It’s ironic that as we increasingly become a cashless society, we’re still forking out a small fortune to access our own money.
Not surprisingly perhaps, ATM withdrawal charges top the list of most hated bank fees. A survey by ING DIRECT shows ATM fees aggravate us more than any other bank fee including account keeping fees, credit card fees and international charges.
Here’s why. We Australians collectively fork out over $600 million annually just to get our own money out of an ATM. This comes five years after the Reserve Bank of Australia (RBA) introduced measures to rein in these fees, including compelling ATMs to display a message saying you’re about to be charged a withdrawal fee.
Despite these measures, we’re now paying more – not less, in ATM fees. Comparison site Mozo found eight out of 14 ATM operators have increased their charges since the RBA’s reforms came on board. A friend recently complained to me she was charged $2.75 to withdraw cash from an airport ATM – a significantly far higher charge than the $2 fee commonly levied several years ago. Fees as high as $3 exist.
Sure, for most of us, a few dollars here and there isn’t such a big deal. The problem is, all these fees add up. Making say, three weekly withdrawals at an ATM charging $2.50 could mean paying fees totaling almost $400 in a single year. Over five years it can add up to around $2,000. That’s serious money, and a really bad way to spend it.
To be fair, the main culprit here is foreign ATMs – machines that don’t belong to our own bank. It is a fee that can be avoided, yet surprisingly, around 40 per cent of ATM transactions are made at foreign ATMs.
The key to cutting these irriatting ATM fees is knowing which banking network you belong to and sticking to machines on that network. Check out one of the apps like Find My ATM designed to help you locate a machine that won’t charge you for a withdrawal. Or head to one of the big supermarkets where you can usually withdraw cash for free without having to make a purchase.
While you’re taking steps to cut fees on everyday banking, it’s also worth casting your eye over your other financial products to see where savings could be made.
In particular, take a look at the latest statement from your super fund and check to see what you’re paying in fees there.
It’s estimated super funds rake in fees totaling around $20 billion annually. On super savings worth $50,000 we’re paying fees averaging over $700 annually.
That’s a big chunk out of your future nest egg, especially over potentially, decades of work. And the thing is, while no one can guarantee the investment returns your nest egg will earn, fund fees are something you can take charge of.
If you reckon your current super fund is charging over-the-top fees, think about switching to a different fund. It can mean having more money to enjoy in retirement, and that’s what super’s all about.