Free international ATM withdrawals with certain banks--who gives you what
Don’t you hate it when you come home from a lovely holiday, check your bank balance and see how much money you spend on ATM withdrawals? There are a number of ways to avoid this, including getting a special multi-currency card with perks that include free ATM withdrawals (most are free up to a certain amount per month, depending on your type of card and account).
But the good news is that a number of standard, traditional banks have banded together to form a Global ATM Alliance, and these banks offer the chance to withdraw funds from foreign banks without a fee, just like you would from your home bank in your home country.
Which banks are in the Global ATM Alliance?
The banks part of this alliance are Bank of America, Barclays, BNP Paribas, Banca Nazionale del Lavoro, Deutsche Bank, Scotiabank and Westpac. Some of these banks operate standard personal bank accounts in multiple countries, too.
- Bank of America (United States)
- Barclays (United Kingdom, Spain, Portugal, Pakistan, Gibraltar, Ghana, Kenya, and other countries in Africa)
- BNP Paribas (Eligible ATM machines in France, Ukraine, Turkey, Poland, Morocco, Italy, New Caledonia, Réunion, Guyane, Guadeloupe, Martinique, and Luxembourg).
- Banca Nazionale del Lavoro (Eligible ATM machines in Italy)
- Deutsche Bank (Eligible ATM machines in Belgium, Germany, India, Poland, Portugal and Spain)
- Scotiabank (Eligible ATM machines in Bermuda, Belize, Canada, El Salvador, Mexico, Chile, Cook Islands, Peru, Papua new Guinea, Guyana Samoa, Solomon Islands , Tonga and Vanuatu. plus several islands in the Caribbean: Antigua and Barbuda, Bahamas, British Virgin Islands/BVI, Cayman Islands, Dominica, Dominican Republic, Grenada, Jamaica, Puerto Rico, St. Kitts and Nevis, St. Lucia, St. Maarten, St. Vincent and the Grenadines, Trinidad and Tobago, Turks and Caicos, US Virgin Islands).
- Westpac (Eligible ATM machines in Australia, New Zealand, Fiji, and Papua New Guinea)
How do I benefit?
You benefit because you can withdraw money from an ATM at a foreign bank without a foreign withdrawal fee, which can easily range from around $4 to $10 per transaction, sometimes more.
For example, a Bank of America customer who withdraws funds in a foreign country at a non-alliance related ATM is charged a $5 flat fee and 3% of the amount withdrawn--and there is a charge both by Bank of America and the local or ATM, and it’s tough to predict how much the foreign ATM will charge. But if a Bank of America customer goes to France and withdraws money from a BNP Paribas ATM machine, the transaction will not yield a fee because both banks are within the same alliance and have an agreement not to charge each other. The same goes the other way around--BNP Paribas customers won’t get charged with a withdrawal fee if they take money out from Bank of America in the US.
Foreign transaction fees by major banks range wildly, but what you do know is that fees will affect you. Wells Fargo charges a flat fee of $5 per withdrawal in a foreign country and Chase fees are $5 and 3% of the US dollar amount you withdraw.
What should I watch out for?
While there is no withdrawal fee in the network, some banks still charge extra fees, like a currency conversion or international fee. For example, Bank of America charges a 3% debit card international foreign transaction fee. So while Bank of America customers don;t get a standard international ATM fee, the transaction fee still applies. Do your homework and make sure you’re aware of any additional fees your bank charges that apply to international withdrawals.
Exchange rates-banks take a margin, which means more money from your pocket
Fees for withdrawals are waived in this alliance, but if you are withdrawing money in a currency that does not match your home country, the currency conversion will cost you money. Why? Because banks charge above the standard, mid-market rate. In other words, the bank’s exchange rate does not match the actual exchange rate. This is one of the ways banks make money from withdrawals.
Most ATMs will display the currency conversion rate on the screen, so make sure you know what the real rate is so you can see how different the bank’s rate is.
How can I avoid a terrible exchange rate?
If you want to avoid losing money this way in general, you are better off getting a separate international bank account which includes a debit card. In this scenario, the cards are pre-paid, so you will usually need to transfer money from your home account to your international account and card before your travels. The transfer might incur a fee, but these fees are generally a lot less than the money you will lose with a bad exchange rate, and you often get full transparency on any fees every step of the way. And many of these debit cards come with no foreign transaction fees, too.
You also need to watch out about question you're getting ask on the ATM's scree: like if you should or not accept the currency exchange rate offered by the ATM?
Remember...As always, compare your options and make sure you’re not losing money due to bad exchange rates and obscenely high fees.
"a Bank of America customer who withdraws funds in a foreign country at a non-alliance related ATM is charged a $5 flat fee and 3% of the amount withdrawn"
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