What Is an ATM? Overview and How It Works

By Kristi Waterworth – Updated Jun 23, 2025 at 2:07 PM | Fact-checked by Frank Bass

Key Points

ATMs enable cash withdrawals, balance checks, deposits, fund transfers, and payments.
Using ATMs can incur fees and possible risks from card skimmers; careful selection is advised.
Despite digital banking advances, ATMs remain crucial for cash transactions.

Automated teller machines (ATMs) are ubiquitous in today's world, but that wasn't always the case. In fact, the ATM is a relatively new invention, and its popularization is also only a few decades old. Find out more about this useful machine inside.

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Person smiles while using ATM machine outside. — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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Kristi Waterworth has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.