For the life of me, I don’t why know it took banks so long to catch up to reality. But I suppose that the old saying is true about how its better being late than never. Earlier this year, it was reported that a couple of the larger banks—namely Chase and PNC—were in the process of switching over to Automatic Teller Machines (ATMs) that actually dispense $1 and $5 bills. This is a convenience that’s long overdue in the realm of banking. However, as with many such improvements in service related to banking, there are advantages and disadvantages to this move.
As many of us forced to make an unscheduled withdrawal from our local ATMs know, this move by these two banks has the potential to save us tons of money by helping to curtail the spending of the excess change we are forced to deal with because we are forced to take out more than we need. In addition, the most could save some customers money in punitive and costly fees. For example, a customer who needs only $25, but would likely overdraw their bank account if they took out $40 would benefit from smaller denominations. However, the new ATMs are free only to the customers of the particular banks. The same $3 out-of-network fees apply to non-customers as they do for any of the banks' ATMs (a customer's own bank typically charges a fee of around $1.60 or more when they use an out-of-network ATM).
At this early point in this new banking practice, it might be wise to anticipate that banks making this move to ATMS that dispense these smaller bills might be tempted become creative with other types of fees and cost to make up for the fact that it cost banks to make this switch in the first place, as well as add the smaller bills. But until banks do start adding more fees for this particular convenience, the only way money can wasted is if the customer is not being cognizant of his/her withdrawal and spending practices.