Whether you have a bank account in Spain as a resident or a non-resident, you will notice that there are differences between the Spanish bank you deal with and the banking system you are familiar with. Understanding the Spanish banking system is essential to making informed decisions.
In this article, we explain some of the key features you can expect and learn more about the alternatives.
Are banks the same everywhere? Of course, the principles are the same, but it is a mistake to think that your Spanish bank will offer exactly the same services and conditions as your Spanish bank. Of course, it depends on the country you come from.
However, some features and working methods may surprise you if you are not prepared for them.
- Residents and non-residents :
In order to have a resident bank account, you must prove that you have sufficient documentation to prove that you are resident in Spain.
You can also get a bank account even if you don’t live here. For non-resident accounts, you will need to provide proof of income, your NIE number and your passport.
These documents must be resubmitted to the bank upon request, usually every two years.
Of course, depending on your state of residence, you can expect to receive a different type of service and account. Spanish banking system: credit cards
You can usually apply for a debit or credit card through a Spanish bank.
As you would expect, debit card payments are immediate, while credit cards postpone payments until the end of the month.
This allows you to pay it off in full without accruing interest or with interest if paid off over time.
The maximum amount you can spend on a credit card and the repayment period may be more limited than you are used to.
This prevents you from accumulating large debts on your credit cards, which could be considered a benefit.
This is still a useful payment option, and at least you won’t have to pay huge amounts of interest over the years.
Spanish banking system:
This is an unusual idea for many foreigners who view their bank accounts as a private, untouchable matter. In most cases, this is true unless you owe money to the Spanish authorities. If even the friendliest inquiries about late taxes, unpaid fines or speeding tickets are ignored, you may find that the authorities will freeze and then collect the amount owed directly from your account.
- Spanish banking system fees:
Don’t expect free banking from the major Spanish banks. There are often ongoing account maintenance fees, annual card fees, as well as certain transaction fees, especially for transactions made “in the office” rather than online.
If you regularly receive money from another country, you may consider transferring money through specialist currency exchange companies such as Currency Direct.
These exchange companies can help you skip bank fees when sending and receiving money between different currencies.
- Branching out:
There are many other services that Spanish banks will try to sell you. One of the most important arguments is the issue of insurance.If you already have an insurance company, be careful and check what the bank offers. It must have the same terms and conditions as the insurance you already have. They can be very persuasive and very difficult to convince if you want to try another insurance company.
Depending on your circumstances, you can also rent a car, set up a pension plan, and get a loan or mortgage. Just be careful that what you sign up for matches what you understand.
In the past, banks have been found guilty of failing to clearly explain all terms and conditions to their customers.
Most of these practices have been reformed, but as a foreigner you may be at risk and should look at the offer first and compare.
New bank
- Neobanks are becoming more and more popular:
These banks do not have physical branches that provide customer service. All work is done digitally and popular examples are Wise and Revolut.These banks are quick and easy to join and often offer their services at lower prices than major banks.
However, there are also disadvantages. There are actions you can take with a traditional Spanish bank that would not be possible with a new bank.
Depending on who you choose, your IBAN may not be in Spanish. Also, since there is no specific ATM at your bank, if you can withdraw cash, you will likely have to pay more for this service.
However, the feeling of being more “in charge” of your bank account and reduced fees make it an attractive option.Communication line. It is fair to say that all banks – whether NEO or otherwise – are becoming more and more distant from us .With fewer branches and more online, we can feel disconnected. However, most banks offer some level of personal service. You must have a contact person.
Oscar Paoli Abaco Advisors
