Thoughts on the current international free withdrawal limit?

I was inspired to write this based on a thread that came up (and then subsequently disappeared) in the general board about Monzo not wanting to compete with Starling on offering free unlimited ATM withdrawals worldwide- that’s all well and good in the UK where not just the UK but the EEA is exempt from the £200/30 day limit which covers a good chunk of British vacationers, but for US cards where only the 50 states (and territories?) are unlimited in terms of not being charged by Monzo for ATM withdrawals, has anyone else felt constrained by the $200/30 day free international withdrawal limit?

At this point, this is one of the things keeping Monzo from being front and center of my wallet when I travel; certain countries I go to are still pretty cash-reliant (and even in card-heavy countries, it seems that certain businesses I like to frequent won’t take MasterCard- Chinese restaurants in particular) so cash access at ATMs is pretty important. In Japan the issue is now lessened by the existence of Apple Pay Suica, but it means I’m stuck in the iOS ecosystem to make that $200 limit workable.

But I recognize that not everyone travels as I do, and it may be that the majority of everyone else might do perfectly fine with that little, thus this post to gather some opinions.

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Out of interest, are fee free international withdrawals common at other banks (and with no markup in the exchange rate)? What bank are you using for your cash withdrawals abroad?

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Charles Schwab no ATM fees and unlimited ATM fee refunds globally.

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But is that a common feature amongst US banks, or is Charles Schwab one of a few (smaller?) banks offering this? I’m curious what customer expectations are.

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It is common amongst banks without branches.

There are no free ATMs in the US. The expectation is one uses their own banks ATMs only which are then free.

As online only banks do not have ATMs this is indeed an expectation.

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Understood for US withdrawals, but are free international withdrawals the norm amongst branch-less banks?

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The three banks I checked so far all do not charge ATM fees abroad.

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Do they offer the same forex rates as Monzo? Or do they charge for the account?

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No fees, forex will be Visa’s rate and they offer up to 1.99% APR on balances

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I’ve only looked at Chime, who I gather is the most popular digital-only bank in the US so perhaps the one Monzo will most commonly be compared to in the US. As far as I can tell, they are not completely free for ATM usage in the US. Only fee-free at MoneyPass and Visa Plus Alliance ATMs, which means fee-free at about 38,000 out of about 500,000 ATMs nationwide.

From what I can tell it looks like Chime are not fee-free for international ATM withdrawals unless I am missing something. Which are the ones you are aware of that are fee-free?

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Schwab, Fidelity, Simple.

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You need to wait and see what Monzo’s offer is after it comes out of beta.

However, I would be careful making comparisons between the EEA and the USA - you need to remember most EEA countries are much smaller than US States.

Also, there is the fact that only a minority of US citizens actually travel overseas at all, let alone hold a passport.

Though a sizeable minority – over 40% hold a passport (vs over 75% in England & Wales).

Coming back to this, basically the expectation is indeed that banks without branches don’t charge for international ATM withdrawals, as a selling point to use them over banks with branches (some of which don’t charge either, granted, see below). For example, currently, I have debit cards from five different banks (a bit overkill, perhaps, but I always like to have a couple of backup sources of funds scattered across my bags when I travel in case one stops working or I lose my wallet with my main debit card) that offer free accounts and don’t charge:

  1. Charles Schwab Bank (brokerage-owned bank, charges nothing and reimburses ATM operator fees)

  2. SoFi (technically an online brokerage cash management account, charges the Visa rate and reimburses ATM operator fees)

  3. Fidelity (also an online brokerage cash management account, charges only the Visa rate and reimburses ATM operator fees)

  4. Aspiration (online-only bank, same policy as above but MasterCard instead of Visa, though they announced to customers that they’ve started limiting reimbursements to five a month after one month where they had to pay someone over 100 separate fee reimbursements and decided that was rather abusive behavior)

  5. Capital One 360 (this one is an outlier; they do have a branch network on the East Coast but they only charge the MasterCard rate, though they don’t reimburse ATM operator fees either)

The card network rates do build in a 1% markup compared to the true mid-market rate, but 1% is low enough for the vast majority of people to not bother, and Schwab, as mentioned above, doesn’t even charge that 1% markup and only charges the mid-market rate or very close to it (I looked back at a fairly recent withdrawal I did and it was within 0.3% compared to 1% when withdrawing from my SoFi card).

And personally, I don’t have an account at Chime partially because they not only don’t reimburse operator fees for international withdrawals, they charge their own $2.50 fee on top.

To tackle a couple of the later replies-

Yes, the US itself is larger and probably equivalent to the EEA itself in terms of size, however, Canada and Mexico are neighboring countries that do see a lot of tourist traffic from Americans (and both only require an “enhanced” driver’s license to cross in and out of by land), long-haul budget airlines like WOW (while they existed) and Norwegian have brought Europe within reach of more Americans, and the kind of person likely to use an app-based banking product like Monzo is more likely than not to be the traveling type (unless they want to start going after the unbanked/underbanked, which is a whole other topic).

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Next month TD bank will start a 3% surcharge and so I’ve been looking into replacement options for an American card that will allow me to pull cash from an ATM for free. Your post has the same wants as I do. I’ve been looking into Charles Schwab but was hoping Monzo could be a bit more accommodating.

it is good to see that both Charles Schwab and Fidelity are able to continue to reimburse ATM fees. Not sure how long they can eat these fees.
I see that Aspiration has changed to 5 free ATM withdrawals per month from their earlier unlimited withdrawals. If you recall, other banks such as Ally started with unlimited free withdrawals before they changed to current $10 per month limit.
I would not be surprised if SoFi brings a change to their policy soon.
Notwithstanding above comments, I would like to see Monzo increasing the international fee free withdrawal limit to $1000 per month.

There are a number of options for fee free withdrawals through online banks, brokerage accounts, etc as well as with normal Main Street banks. Many accounts offer 3-5 fee free withdrawals. You can also discuss with your bank what your needs are and many are willing to accommodate. You just have to ask. On average though I think that financial institutions are trying to avoid cash withdrawals as much as possible.

I have an HSBC account in US and UK. US account allows for 5-7 with an advance account but considers more if needed.

I have a current account with Chase and they offer three but if you have a higher tier account status it is free.

Citi offers me fee free withdrawals.

Schwab and Fidelity reimburse me for all fees.

Chime reimburses up to (five?) I think / yr. I know consolidating banking into one card is much easier but in general I find it’s easier to use each bank for what it offers best and transfer when needed.

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I think that in the case of the big brokerages, as long as they can cross-subsidize with profits made from the brokerage side (treating the bank account as a loss leader), then they can afford to do this indefinitely. Aspiration and a lot of other online banks, I think, are limited by the fact that they don’t have the same large money-making operations elsewhere to cover costs associated with the bank accounts. As a customer, I do hope that if SoFi introduces limits, that they go with number of withdrawals instead of dollar amount of fees, though. There are some countries where the local banks really like to take foreigners for all they’ve got in ATM fees-Thailand, for instance. Ally’s reimbursement limit would get me one withdrawal there.

Also, agreed on the idea to increase it to $1k/month; that’d bring them much closer to equal footing with the other players on the market. I’d even argue that’s enough for a lot of international travel.

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I agree, number of withdrawals vs nominal amount is so much better!

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Hey Jason! Just wanted to follow up here to let you know we’re actually not charging any ATM fees abroad for our US accounts right now. Based on some feedback we received from our community when we first launched around international ATM fees we decided not to charge them at this stage. This may change at some point in the future but we don’t have any plans to introduce international ATM fees for Monzo US customers at the moment.

This means that when you’re travelling abroad in the future you’ll be able to withdraw up to your ATM withdrawal limit ($500 / day $3,000 over 30 days) without being charged by us.
Sometimes the ATM providers will charge a fee, so you’ll need to look out for a fee free ATM but we won’t add a charge ourselves and we’ll also pass on the Mastercard exchange rate to you as long as you select to withdraw in the local currency (rather than allow the ATM to control the conversion by selecting to withdraw in dollars).

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