How Do ATMs Work In Canada?

How Do ATMs Work In Canada?

Written by Corrina Murdoch
Fact-checked by Caitlin Wood
Last Updated March 30, 2022

Short for an automatic teller machine, ATMs are meant to add convenience by providing access to banking services at any time. Whether it’s to make a deposit, a withdrawal, or pay a bill, ATMs give access to financial services around the clock. Even with the onset of online banking, the value of an ATM remains. After all, you can’t take out cash through your cell phone, nor can you make a deposit. ATMs combine the ease of digitization with the in-person benefits of an actual bank.

Chances are that you already know or have used these machines, but do you know how they work? How to use one safely? In this article, we break down everything you need to know about ATM security, function, and convenience.  

What Is An ATM? 

An ATM is an abbreviated term for an Automatic Teller Machine. It’s a computerized system that allows you to access banking services without waiting in line to speak to a teller. Instead of having lines of people waiting to speak to relatively few bankers, software engineers developed a system to address the most common, straightforward banking needs. 

While you can’t go to an ATM for financial advice, you can do most basic transactions like checking your balance and withdrawing or depositing money. Though nowadays actual online banking has co-opted many of the purposes an ATM serves, it remains essential for one key thing: cash handling. Accessible 24-hours a day, these small-scale banking devices enable you to withdraw and deposit cash quickly. 

ATMs vs. ABMs

Automatic Teller Machines (ATMs) and Automatic Banking Machines (ABMs), are exactly the same thing. The difference is entirely colloquial, meaning someone from Vancouver might call it an ATM, a Torontonian might call it an ABM,  while someone from Quebec might call it a guichet or a DAB (short for distributeur automatique de billets). Whichever name you assign them, ATMs are extremely handy — Canada roughly 70,000 in total — giving access to financial services in most communities across the country. 

Types Of ABMs/ATMs In Canada

Though the services are quite similar, there are three unique types of ATMs in Canada. These include: 

Financial Institution Full-Service ATMs

This type of ATM usually has the most features available and comes at the lowest cost. When you use ATMs from your own financial institution, there is usually no charge.  Because it is directly owned by the bank, you can complete many transactions. Among them, you can pay bills, make deposits, check account balances, and complete transfers. Even if you don’t bank at that institution, you can use the ATM to withdraw cash for a fee. 

Off-Premises ATMs Owned By Financial Institutions

Off-premise ATMs usually offer simple cash-dispensing services, though usually don’t accept deposits (largely for security reasons). If you bank with the institution that owns the machine, then you can often do other, digital transactions. Those who bank elsewhere can access cash dispensing services for a fee whereas existing customers get the benefit of free transactions

Independently-Owned And Operated ATMs

Dedicated to convenience, these ATMs are owned by private companies in competition with the banks. While large financial companies have the benefit of infrastructure (digital and physical), independent operators can offer convenience. However, these machines generally only offer cash withdrawals. 

You might spot one of these machines in a small-town grocery store, at a festival or concert, or anywhere you might find yourself in need of cash. While there’s a fee, it is still quite popular with  roughly 70,000 ABMs across the country 51,485 are independently owned. 

ATMs In Canada: Fun Facts

There are almost 70,000 ATMs in Canada, with banks operating 18,515 of these machines and 51,485 of these being operated by independent owners. ABMs continue to evolve, and so has their utility:

  • 53% of people report banking primarily online
  • 23% of participants rely on a banking app
  • 12% of people reported in-person banking

ATM Withdrawal Process

From the security features to the touchscreen surface, ATMs are built to be intuitive. To withdraw money, simply: 

  1. Insert your debit card into the ATM
  2. Key in your PIN (personal identification number) to confirm your identity
  3. State the account from which you want to withdraw funds (ex: chequing or savings)
  4. Press the button stating the amount you wish to withdraw and the bills you want it in. This is only available on some ATMs, with the most common bills being 20 dollars. However, some let you receive $5, $10, $50 or $100-dollar bills as well. 
  5. The ATM will show a screen asking you to confirm the transaction and any necessary transaction fees.
  6. Click OKAY and, when the system prompts you, remove your debit card.
  7. A screen will show up asking if you want a receipt. You can choose yes or no. 
  8. The machine will then push out the cash which you can now take. 
  9. If you got a receipt, take it out of the ATM. To protect your information, you can either place it in your wallet with the cash or destroy it. 

ATM Withdrawal Limits

When you withdraw money from an ATM, there’s usually a withdrawal limit on the account, mainly for security purposes. It protects the account holder from the risk of loss, whether due to poor judgment or unfortunate circumstances. 

The total you can pull out of your account, per day, depends on the types of accounts you have. Most institutions set the limit to $500 – $1,000 per day. Bear in mind that you can adjust the limits to a lower amount to prevent overspending. 

Can You Deposit Cash Through An ATM?

If you plan to deposit cash through your ATM, ensure that it offers that service. Your best chance is to use a full-service ATM at your financial institution. Even during off-hours, banks keep these terminals accessible. To deposit money using an ATM, simply follow these steps:

  1. Insert your debit card
  2. Punch in your PIN number to verify your identity
  3. From the list of services presented, choose deposit
  4. Identify the account into which you plan to put the funds (ex: chequing or savings)
  5. State how you plan to make the deposit (if the ATM offers that service). Examples include cash, cheques, or both. 
  6. If the ATM has envelopes next to the machine, place your money inside of it and seal it before placing it in the machine. Otherwise, simply place your cash or cheque in the machine slot. 
  7. Confirm the deposit by verifying the details of the transaction.
  8. Remove your debit card and take the receipt. If you deposit cash, these funds should be immediately available to use. Cheques, on the other hand, will usually be placed a hold by the bank until the cheque is cleared. This can take up to three business days to process. 

Learn about NSFs and bounced cheques.

ATM Fees

Though ATMs are meant to be an affordable service, each ATM has associated fees with its operation. These include: 

  • Regular account fees – If you go over your allowable number of transactions for the month you may be charged a fee for each ATM transaction. This applies to bank accounts with limits on the number of ATM withdrawals you can make. 
  • Network access fee – When you use an ATM owned by a different bank, you’ll need to pay a network access fee. This charge is for the machine linking into your bank’s network.
  • Convenience fee – Privately-owned ATMs add a convenience fee, in addition to the network transaction fee. 
  • Currency exchange fees – Most banks charge a fee for exchanging currencies when you withdraw foreign funds. 

Avoid fees with these unlimited transaction chequing accounts.

Type of FeeFee Amount
Regular account fees$1.00 to $2.00 per additional transaction
Network access feeIn Canada: $2.00 to $3.00
International: $2.00 to $5.00
Convenience feeVaries based on the owner.
Usually between $1.00 and $2.00
Currency exchange feesFee for exchange: 2.5%

How To Find An ATM Near You

The good news is that it’s far easier to find an ATM than it is to locate an actual branch of a bank. You can find an ATM in most convenience stores, shopping centers, or festivals (situations where you need cash the most). 

To find an ATM, simply visit the website of your bank and look for the locations. If the bank has a branch near you, they will also have an ATM. Conversely, you can do a quick search for “ATM near me”. Provided your location settings are enabled, you will see a list of ATMs in your area. 

ATM FAQs

 

How much can I withdraw from an ATM?

The amount you can withdraw from an ATM depends on your bank and your account type. Most bank accounts come with preset daily withdrawal limits, you can call your bank to ask for an increase or even a decrease to limit spending.

How much do ATMs charge to withdraw money? 

ATMs usually offer free transactions for their own clients, though some charge as much as two dollars, depending on the type of bank account you have. If you use an ATM at a bank you don’t have an account with, it costs between two and eight dollars. Private ATM operators usually charge between two dollars and nine dollars.

How do I avoid paying ATM fees? 

There are some easy ways to avoid paying ATM fees altogether, and it all comes down to planning ahead. Identify ATMs from your banking institution that are close to you, or on your route to an event. 

Final Thoughts

Now, with the combination of ATMs and online banking, there are few reasons to actually visit a banking location. Together, you can perform almost any standard banking transaction. In fact, when you wait on hold to speak with any of the Big Five banks, the prerecorded message often directs you to visit their website. So whether you need to pay a bill, deposit a cheque, or have some extra cash, the services are easy to access. 

Corrina Murdoch has been a dedicated freelance writer and editor for several years. With an academic background in the sciences and a penchant for mathematics, she seeks to provide readers with accurate, reliable information on important topics. Working as a print journalist for several years, Corrina expanded her reach into the digital sphere to help more people gain insight into the realm of finances. When she's not writing, you can find Corrina swimming and spending time with family.

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