With all the extra money saved on ATM fees, you’ll have more to spend on keepsakes… like an alpaca wool sweater! Photo by: Evan Berman
Whether you travel frequently or only leave the house when you must, you will need cash on certain occasions. I use a credit card on every purchase that I can to earn rewards, but sometimes there are merchants or even a city that does not accept credit cards.
Often, when I need cash, I am in a foreign country and do not see my bank’s ATM. This will incur a fee both from my bank and from the bank with which I am withdrawing money. While the average out of network ATM fee is only $2.50 per bank (so $5 total), it is not unheard of to end up paying $10-$20 or more– just to access your own money! Couple that with the 0.01-0.05% APY you often earn and one might start to wonder why exactly you trust them with your money.
APY stands for Annual Percentage Yield. This is the basis for any interest that you earn. If you have $1,000 in your account and you earn 0.01% APY, your interest would be a whopping $0.10 after 1 year and $0.50 after 5 years! Woohoo! Contrast that with a 5% APY, your interest would be $50 after 1 year and $276.28 after 5 years! That’s a bit better, no?
Enter ATM Fee-Reimbursement Accounts
Why should you pay the aforementioned fee when there are free accounts that you can sign up for today? Certain accounts will reimburse you the ATM fee for the bank from which you withdrew money AND not charge a fee for withdrawing money from an out-of-network ATM. The 3 most well-known accounts that offer these ATM Fee reimbursements are: Schwab Bank High Yield Investor Checking® account, Fidelity Cash Management Account, and Capital One 360 Account.
Schwab:
I currently have a Schwab Bank High Yield Investor Checking® Account and highly recommend it for everyone. There is no minimum balance and all ATM fees are reimbursed. Additionally, your APY is 0.40%– not the best, but much better than the average value.
What’s the catch, you might wonder? Well, you have to open up a brokerage account at the same time as the checking account. However, there is no required balance and you can ignore the brokerage portion of your new accounts if you want! Just enjoy earning a small bit of interest and paying no fees of any kind.
I generally keep about $200 in the account should I need cash and transfer more when I travel or know I will need to withdraw cash. Your amounts may differ of course based on your situation.
Fidelity:
The other free ATM fee reimbursement option is the Fidelity Cash Management Account. While any international fee is not reimbursed (usually about 1%), any ATM in the MoneyPass® and Allpoint® network (more than 70,000) will not charge a fee. Additionally, as of October 6th, accounts under $100,000 have an APY of 1.58%. That’s below some of the top checking and savings accounts, but well above the average!
Once again, you can earn interest without having a minimum balance requirement. While this is a Cash Management account, not a checking account, one of the most important benefits still applies. Up to $1,250,000 is insured by the FDIC, so you won’t risk losing money should an issue arise with the solvency of the bank.
Capital One:
The Capital One 360 Account is another option for fee-free checking. Similar to the Fidelity account, there is no fee for using an ATM in the MoneyPass® and Allpoint® network, as well as Capital One’s own ATM’s. However, there may be a small fee for using an international ATM. This will likely be $2 or so.
Note that there are reports of some cardmembers being eligible for up to $15 in fees reimbursed each month. Your mileage (and money) may vary. The APY for this account is 0.10% no matter your account balance.
Other Options:
Both of the above accounts allow any new customer to sign up and there are no fees or catches! Of course, other accounts do offer ATM fee reimbursements but they may require a minimum account bonus (sometimes this is to avoid paying monthly fees, other times it is simply a requirement at account opening), a certain credit card, or investment account. If you have an extra $200,000 lying around, it is as easy as choosing your favorite bank. They will be more than happy to welcome you into their business! Citigold is a good option for all your financial needs– just make sure that you meet the $200,000 requirements!
Why You Should Care:
At Maxing Out Memories, it’s all about maximizing (see what I did there?). Paying with cash usually doesn’t get you any benefits– though sometimes a fee for using a debit or credit card acts as a de facto discount– so don’t pay for the privilege.
Just sign up for the Schwab Bank High Yield Investor Checking® Account, Fidelity Cash Management Account, or Capital One 360 Account. I use the Schwab account as I value never paying a fee for withdrawing cash over the slightly higher APY. Which one will you choose?
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