How to save on ATM fees when withdrawing cash overseas

How to save on ATM fees when withdrawing cash overseas

Credit cards are often the easiest way to spend your hard-earned abroad, but cash is still king in many countries for smaller payments such as taxi fares, market shopping and even that first cup of coffee after you arrive.

Yet withdrawing foreign currency from an overseas ATM can trigger a barrage of fees and service charges that most would rather avoid – and by following a few simple steps, you usually can.

1. Get familiar with your bank’s fees

We looked at the basic everyday banking products of ANZ, the Commonwealth Bank, NAB and Westpac, and found a common theme – each of the Big Four levies its own A$5 charge for most overseas ATM withdrawals.

Add to that a further 3% international transaction fee every time you punch in your PIN on foreign soil and you’ve already been stung for $8 to get your hands on the equivalent of just A$100.

That’s a whopping 8% lost to bank service charges, atop any withdrawal fee imposed by the ATM itself.

At that rate, there’s little advantage to using an ATM when you could simply pre-order foreign cash via Travelex and collect it at the airport on your departure.

2. Withdraw cash at your bank's partner ATMs

Accountholders with CBA and Westpac benefit from reduced-fee ATM withdrawals abroad when using their Debit MasterCard at a participating ATM.

CBA waives its usual 3% forex fee and lowers the fixed ATM usage cost to A$2 when transacting at ASB Bank ATMs in New Zealand and Commonwealth Bank ATMs in both Indonesia and Vietnam.

Westpac, on the other hand, is part of the Global ATM Alliance with its cardholders avoiding the regular $5 charge and any normal ATM-imposed fees at over 50,000 ATMs worldwide, although its 3% international transaction fee still applies.

Among the roster of Global Alliance partners: Westpac New Zealand, Barclays Bank (UK), Bank of America (USA), BNP Paribas (France, Italy), Deutsche Bank (Germany, Spain, Poland) and ScotiaBank (Canada).

Don't walk past that Barclays ATM in London: avoid Westpac's $5 ATM fee here.

Standard charges apply to both CBA and Westpac customers when withdrawing cash from ATMs outside their bank’s partnered international network, while ANZ and NAB cardholders are billed the same ATM usage fees wherever they transact overseas.

3. Switch to a fee-free bank account

If you travel often enough that ATM fees begin to take their toll or you're planning a trip to several countries where each uses its own currency, a bank account with no foreign ATM fees trumps the competition.

Case in point: the Citibank Plus Transaction Account and its companion Visa Debit card, with no monthly account-keeping fees, international ATM withdrawal or international transaction fees.

That gives you the freedom to make as few or as many trips to the ATM as needed throughout your journey without being hit with fees every time – although as with any bank, you're still at the mercy of any transaction fees imposed by the ATM itself.

Many travel insurance policies also limit the payout on lost or stolen cash to around A$250, so by withdrawing and holding only what your own policy will cover at any one time, you’re not putting your money on the line if your wallet goes walkabout.

Also read: The best credit cards for international travellers

Follow Australian Business Traveller on Twitter: we're @AusBT

 

22 Comments

  • UpUpAndAway

    UpUpAndAway

    22 Apr, 2015 12:10 pm

    I've always found it better to get cash in the country you visit rather then pre-buying, the only problem is having that first amount of cash for the cab fare.

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  • riley

    riley

    22 Apr, 2015 03:32 pm

    ING direct have no ATM's of their own and rebate any fees you incur from 3rd party ATM's. Make for convenient cash withdrawl.

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  • Colin Steven

    Colin Steven

    23 Apr, 2015 08:13 am

    The ATM rebate is only on Australian ATM's and if you deposit $1000 a month (via any source other than a transfer from another ING account), their fee for ATM withdrawls overseas is $2.50

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  • riley

    riley

    23 Apr, 2015 09:27 am

    Yes assuming one is depositing regularly (salary) if they're withdrawing regularly. 

    $2.50 charge overseas is the least of your concerns. They're not recognised at the majority of ATMs I've tried in Europe and Asia.

    It's not a travel friendly product so I use a combination of my CC and global wallet. 

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  • Colin Steven

    Colin Steven

    23 Apr, 2015 10:02 am

    Then why didnt you put all that info in your first post. Not just the one line about ATM fee rebates???

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  • riley

    riley

    23 Apr, 2015 03:23 pm

    There are pros and cons with every product, I was merely pointing out a favourable feature that I assumed would resonate with most people.

    Again, assuming that most of your withdrawls are made in your home country, it's a neat feature. Furthermore, I drew the conclusion that if it's your primary bank account, you would be reaching the minimum monthly deposit threshold. 

    There are many more benefits and drawbacks with this product, I'm happy to email you a link to the PDS as it seems you're quite fond of small print and small details?

    Edited by Chris Chamberlin.

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  • Colin Steven

    Colin Steven

    24 Apr, 2015 08:10 am

    I was going to write a long winded answer about how the initial article was on ATM fees overseas and how I didnt think your initial response was sufficiant, and thats why I commented.  But given your scarcastic tone (and content now removed from the post above), I wont.  I honestly cant be bothered anymore. You win.... You have a great day.

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  • Chris Chamberlin

    Chris Chamberlin

    24 Apr, 2015 09:18 am

    Riley – As we always say, comment on the issue at hand rather than the user discussing the issue. Your post has been edited to remove personal comments made about a fellow user.

    This article solely discusses the use of ATMs when overseas, so although one product may have its advantages when here at home, you've declared it as "not a travel-friendly product" making it better-discussed elsewhere.

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  • willvill

    willvill

    22 Apr, 2015 05:30 pm

    You fail to mention in 'Getting on Top of your Bank Fees' is that on top of the quoted $8 is the near 3% lower currency exchange rate you get below the mid rate from the big banks,. So thats another $3 on a $100 transaction. And why for the life of me you mention Travelex, who consistently offer THE worst rates of all. In my many observarions of their rates thay are about 5 points off the mid rate minimum PLUS a fee. Use them at your peril...!!

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  • Chris Chamberlin

    Chris Chamberlin

    22 Apr, 2015 06:04 pm

    Hi willvill,

    It's a good point that banks can often pad their exchange rates from the mid-market rates, although as FOREX rates frequently change throughout the day and the article does not relate to a specific currency in which we could explore this further in detail, we zoned-in on the specific fees that are added on top of your withdrawals by the big banks and the fixed costs that apply when using ATMs abroad.

    Regarding Travelex – when Australian Business Traveller last compared a range of foreign exchange rates (as linked in this article and also here if you missed it), we found that Travelex's walk-up kiosks at Sydney Airport did indeed offer the least-competitive rates of those that we surveyed.

    However, when heading to the Travelex website and pre-ordering your foreign cash online (which was the method we suggested in this article), the rates offered by Travelex were actually the best in Australia (as at April 2014 when last updated), and tied for first place with American Express Foreign Exchange.

    Cheers

    -Chris

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  • willvill

    willvill

    22 Apr, 2015 07:27 pm

    Ive taken note and will test it out next month when I travel again. i hope I am pleasantly surprised. Thanks

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  • Greg84

    Greg84

    22 Apr, 2015 11:14 pm

    Have used Citbank Plus...very easy, good FX rate too...

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  • Demonoid

    Demonoid

    23 Apr, 2015 02:23 pm

    Citibank Plus is great for cash withdrawals and I also have the Citi Prestige Credit Card which gives you 3.33 points per dollar spent (I use either Velocity or Singapore Krisflyer) as well as a great FX rate better than the other big 4 banks.

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  • Colin Steven

    Colin Steven

    23 Apr, 2015 08:17 am

    One interesting note, one banks ATM's in Hawaii, USA have different fees depending on location of the ATM, eg: $3.40 at one ATM, but $5 at the same financial institution but in the food court, and $10 in a retail store.  So it pays to check if you want to save $'s

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  • Chris Chamberlin

    Chris Chamberlin

    23 Apr, 2015 10:26 am

    Huh, now that's 'convenience fees' at their finest!

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  • FuzzlerQ

    FuzzlerQ

    23 Apr, 2015 08:58 am

    The Bankwest Qantas transaction account has no $5 ATM fees overseas. The 2.95% foreign conversion still applies though. The other option is to get the Bankwest platinum credit card and load cash onto (so it's in 'credit' above the credit limit). All you pay then is a 2% fee at any ATM overseas!

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  • flyme2themoon

    flyme2themoon

    23 Apr, 2015 03:38 pm

    The Qantas Credit Union is the winner for me. Depending on the amount you either hold or deposit the union gives you a monthly allowance for fees that you occur, including ATM fees in Australia and overseas.

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  • eight10man

    eight10man

    23 Apr, 2015 06:34 pm

    How competitive are the Pre-paid travel VISA cards (like the one inside the Velocity FF card) if you take out money using the pre-converted currency abroad..?

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  • Reg

    Reg

    24 Apr, 2015 07:27 pm

    Yep, Citibank Plus account works just right - used in South Africa, Seychelles, Singapore and not a cent of transaction fee. I transfer online to the plus account and use debit card in stores etc and at ATMs. Best value by far...

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  • Brian Tonkin

    Brian Tonkin

    24 Apr, 2015 10:13 pm

    There are so many ways the banks bite you and all one can do is be as smart as possible to minimise the size of their meal. After many years of overseas travel here are my tips to achieve that end. Firstly if you regularly go to a certain currency zone such as US dollars, Euros or Sterling your cheapest option is to open an overseas bank account with both cheque book and debit card facilities in the overseas country. Then use a THIRD PARTY foreign exchange intermediary to transfer your own currency to your overseas bank account. Such organisations will give you a much fairer exchange rate than any Australian bank provides. They are also fast and reliable.Your next best option is to take overseas cash which you buy from Australia Post. They act as an agent for American Express. Their exchange rates are better than most of their competitors and ther'e no commission. You can order online and then pick up your cash from a convenient Post Office. I would NEVER countenance a pick-up from Travelex at the Airport. If there's been a hiccup you're RS. Another tip is that if you are carrying a large sum of cash overseas don't store it all in the same place and if you have a travelling companions split the cash between you. My  final tip is that if you are going to use overseas ATM's, make sure you withdraw draw the maximum sum the ATM allows so as to minimise the number of fixed ATM fees you pay. By trial and error you will discover which bank's ATMs offer the highest withdrawal amount and this figure can vary dramatically between banks. Let's face it, you're better off paying a $5 fee for a maximum US$800 withdrawal (at say Wells Fargo ATMs) than paying a $5 fee for a maximum US$200 withdrawal (many small US community banks). Likewise most Aussie banks will ALSO hit you for a fee per overseas withdrawal so small ATM withdrawals hit you with a double whammy !! Avoid small withdrawals like the plague.

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  • Melflighty

    Melflighty

    26 Apr, 2015 06:23 pm

    As an International flight attendant I can deffinately say the Citibank Plus account is the best. They Visa rate they give is pretty good.

    Some countries such as Thailand it's better to take AUD to change there but then other countries like Some cities in the USA, Japand doing that you will actually get a worse rate.

    The worest rate is the pre paid Visa and Mastercards. Terrible rates! But everything has there pros and cons. If your planning to travel in the future if could pay to lock in a rate with a pre paid card. Eg: the USD is now terrible had you locked it in when it was at paradity you would still be better off now.

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  • Aussie495

    Aussie495

    11 Apr, 2016 08:41 pm

    In Ho Chi Minh City, Vietnam I needed a considerable amount of money in a hurry so I withdrew the maximum allowed from the three banks for which I have cards. The results were really surprising. Using my Citibank Plus card gave me 8,000,000 dong at nil cost using the Currency Converter XE midrate as a comparison. They have been doing this for at least 6 months now. How they do it I do not know. The following costs were also done using the Currency Converter XE midrate. Using a Commonwealth debit card at a Commonwealth Bank no fee ATM to withdraw 9,000,000 dong cost 6.8%. I then tried my Commonwealth debit card in a Citibank ATM to withdraw 8,000,000 dong. That cost 5.2%. Using my ANZ visa card to withdraw 5,000,000 dong from an ANZ ATM cost 3.8%. Conclusion: In Vietnam at least the Citibank plus card is a real winner and the Commonwealth Bank's no ATM fee is basically a fraudulent scam.

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10 Dec, 2016 08:11 am

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