How does an ATM work?

If you earn and spend money, you’ll probably use an ATM at some point — if you haven’t already. 

You might be thinking, ‘Back up. What even is an ATM?’ It’s a machine that deposits and dispenses money. Sounds pretty straightforward, right? Well, when ATMs were first developed, they were revolutionary. Since ATMs are connected to banking networks, they allow people to quickly access their banking information, get cash, and deposit checks. They also improve accessibility for people who don’t live near physical bank locations or can’t go to the bank during the day — since most ATMs are open 24/7. 

If you’ve never used an ATM or have questions like ‘What is the meaning of ATM?’ and ‘How does it even work?’, we’ve got you covered. In this blog post, we’ll cover everything you need to know about using an ATM and keeping your info secure. 

What is an ATM? And how does it work, exactly?

ATM stands for automated teller machine. It’s a device that allows you to withdraw and deposit funds. They’re often located outside of banks and at convenience and grocery stores.

The good news? Using an ATM is simple and secure as long as you know how to keep your information safe. Follow these steps to learn how to use an ATM and how it works. Trust us — you’ll be a pro in no time.

1. Locate an ATM 📍

There are two main types of ATMs — third-party ATMs and ATMs owned by banks. You’ll know which is which by looking at the logos on the ATM. If it’s owned by a bank, you’ll see the bank’s logo on the machine.

If you visit one of your bank’s ATMs or your card doesn’t charge ATM fees, you can withdraw funds with no problem. However, some third-party ATMs charge a fee to withdraw funds, even if your card doesn’t.

Need to deposit a check at an ATM? Make sure to visit one of the ATMs owned by your bank.

Greenlight tip: While Greenlight can’t guarantee that an ATM won’t charge a withdrawal fee, Greenlight will never charge you for using your Greenlight debit card at an ATM. 

2. Insert your card and enter your PIN 💳 

So you’ve found a nearby ATM — now what? Once you insert your card, you’ll be asked to enter a PIN. A PIN — aka a personal identification number — is what keeps your account secure. 

Typically, you choose your PIN when you open your bank account and then use it later to access your account. PINs keep your money and personal info secure, so avoid choosing something easy to guess, like your birthday or address.

3. Complete a transaction ✅

Choose the type of transaction you’re making — deposit or withdrawal. Then, select your account and follow the on-screen prompts to complete your transaction.

4. Collect your card and cash 💸

Remove your card from the machine and exit the screen. If you withdraw money, wait for the device to release the cash. 

Regardless of the type of transaction, you can request a receipt that shows the transaction details and your new balance. 

Why are ATMs important for teens and young adults?

ATMs allow you to access money at a moment’s notice — which is convenient if you need cash or get stuck in an emergency situation. Imagine that you go to the local farmer’s market with friends and want to purchase something from a cash-only booth, or you need to take a cash-only taxi home from a concert. ATMs give you the flexibility and convenience of accessing your money whenever needed.

What else can ATMs do? They allow you to see your bank account balance, transfer funds between accounts, and deposit cash and checks. 

Greenlight tip: Did you know you can use your Greenlight debit card at any ATM with a Mastercard, Visa Interlink, or Maestro name or logo? Including international ATMs!

5 ATM security and safety tips

Safety first 🛑 ATMs are convenient for making deposits and withdrawing cash, but they should be used carefully. Because your money and personal information are important — and you don’t want them falling into the wrong hands. 

Use these tips to keep your transactions safe.

1. Protect your PIN

Your PIN grants access to your bank account, so don’t share it with anyone. It’s also a good idea to shield the pin pad whenever you type it in. 

2. Survey your surroundings

Be aware of the surrounding area when approaching an ATM. If people are lingering nearby, consider finding a different location. 

3. Take your receipt

Avoid leaving any personal information behind. That means taking your receipts and closing your transaction before leaving the ATM.

4. Be brief

Have your debit card ready when you arrive, and move away when you’re finished. It’s important to avoid counting cash or standing around the ATM with an open wallet.

5. Check for card skimmers

Look closely at the pin pad and card reader each time you approach an ATM. Card skimming devices may be placed on the card reader or pin pad to collect your information. Check for bulkiness, sticky residue, or loose fixtures by looking closely or wiggling the card reader and pin pad. When in doubt, head to a different ATM. 

ATMs? Check. Next stop — financial independence.

Now that you know how ATMs work, you can securely — and confidently — withdraw cash, manage balances, and deposit funds. That means managing money on your own 🥳

Greenlight is here to support you and your family along the way. Greenlight’s debit card allows kids and teens to set savings goals, make mobile payments, and learn to invest. The fun doesn’t stop there. Parents can send money instantly, track balances, and set store and ATM controls. 

ATMs + Greenlight debit card = A match made in personal-finance heaven. For the whole family.