Banking in Spain

Which bank do you recommend in Spain is a question that I see often on the expat forums on Facebook.  As with your home country one bank is pretty similar to the others so a lot comes down to personal preference.   There are a few things to bear in mind though and some differences in how the banking works.

Co operatives

Caja Rural and Cajamar are a co operative group so are run by the people for the people, at least in principle so are not looking to make a profit in the same way as the others.  However, they do take a members deposit when you set up a bank account or take a loan or other credit product.  This money is not lost, it will be returned if you close the account.   The amount is c€100 to €300 so best to know in advance.

Cashpoint networks

In some countries the cashpoints all work for all cards but here in Spain there could be a fee if you use one outside your network.  Generally these are split into Visa and Mastercard.  So if your card has a visa symbol on it and you use it in a Mastercard machine your charges could be pretty hefty.  This article from Wise tells you more.

Can I open a bank account as a non resident

Many people wonder if they can open a bank account in Spain if they are not resident.  The good news is that yes you can.  The easiest way if you are non resident is to pop into a branch with your passport or photographic ID card and go from there.  You may also be able to do it online but some online account applications expect you to have an DNI number which is a different format from the NIE numbers that foreigners are issued with.  If you don’t yet have an NIE it is automatically requested if you are buying a property,  Or you can apply for one from your local Spanish consulate.

Fees

Banks do often charge fees for transfers and any other services.  Good branches will help you by explaining the charges and whether you can use the banking app to do it for free.  The banking apps are very good and allow you to move money wherever you like and keep an eye on things wherever you are at whatever time.  If you opt for an internet based account you can still go into branch and ask for help but the fees may be higher.  If you think you will need a fair bit of support it is best if you choose a High Street account.

You do still see people in Spanish banks and there are branches in every major town right down to large villages.  At the moment.

Direct Debits

Direct debits work in kind of the opposite fashion to a UK one.  In UK the account holder (you) set it up.  Here in Spain it is most common for the business or institution that you are going to pay to set up the direct debit.  You can still cancel it in your banking app though.

Government activity

Your tax can and often will be deducted by the government or local town hall with no prior warning.  This is also the case for social security payments – autonomo so be prepared.  Lots of people keep the bare minimum in their Spanish bank account and keep the rest in an account in their home country or in a N26, Revolut or Wise account or similar.

Currency transfer

If you are holding money overseas or have earnings from outside Spain you are likely to need to transfer some of that to Spain.  Transferring from UK or US etc bank to a Spanish one can be expensive in terms of fees and the exchange rate that you get can be poor.

When buying a property many agents will sign you up to their preferred currency transfer company.  This is because they earn commission from every transfer that you make.  If the commission is 0.5% that’s €1,000 earnt for a transfer of €200,000.

You can use someone like Wise if you are happy doing it yourself.  Their exchange rates are pretty good and it is easy to use.

I work with Total Currency Exchange as they give a truly personal service at rates similar to Wise.  I don’t receive any commission from them.  If you would like to know more please get in touch and I will tell you about them and put you in touch.  info@idealcasa.net or WhatsApp +34 744 609630

Cashpoint functionality

Spanish cashpoints have lots of additional functionality.  Not only can you pay cash in but you can also pay bills.  Official bills from the town hall (ayuntamiento) or government sources (junta or hacienda) have bar codes on them.  If you go to a cashpoint and press pay invoices, you can then scan the barcode under the red or orange light and the cashpoint system will take you through automated payment.  If it is for a recurring bill like IBI (property tax) or car tax you can click “set up direct debit” and the payment will automatically be collected next time.

The cashpoints also know your preferred language from the moment you tap or insert your card, which comes in handy.

Credit

The credit score from your home country is unlikely to be considered by Spanish banks, at least not in the first pass.  Loans and credit cards do seem easy to get.  It is done the old fashioned way – you go and talk to the bank manager.  They confirm the rates, ask you for lots of forms and signatures.  You may even need to pay a visit to the local notary to get a line of credit signed off.

I managed to get a 5 year car loan very easily with minimal input.  I did have to go to the branch about 5 times to sign this or that document though.

Summary

Banking in Spain is both more old fashioned and more modern than what I was used to in the UK.   There certainly are some quirks.  Getting money back from a government agency or insurance company when it has been paid in error can take quite some time.   Remember to update your account when you become resident to a residents account.  This could save you fees and taxes.  Taxes are saved as information is shared by banks to government authorities.  There are various non resident taxes.