A Simple Guide to Banking in Spain

When buying a property in Spain, you might want to look into what deals Spanish banks have to offer. Since April 1994, it has been possible for any bank within the European Union to open a branch in Spain, offering two types of bank, savings and loans banks and clearing banks.

Initial experiences with Spanish banks can be a bit of an eye opener. They have the most expensive fees in Europe and funds transferred from overseas can take an unprecedented period of time before reaching your account in Spain, often having rested in Madrid for a couple of days before becoming accessible.

when opening a Spanish bank account it would be wise to ask the following questions:

Does the bank speak English (if you do not speak Spanish)?
Are facilities in place to receive and transfer money overseas?
Is there a convenient local branch? Do they have Internet banking facilities?
How soon can you get a debit card, cheque book or credit card?

• Types of Accounts:

There are two tiers of banking in Spain, non-residents are able to open non-resident current and savings accounts and fiscal residents can have a current and savings account for residents.

Opening a bank account in Spain is relatively pain free. To open a resident's account you will need your passport, residence permit and N.I.E. number which is obtained from your local police station and similarly for a non-resident account except for the resident permit. As with any bank you will also need to complete a form agreeing to the bank's terms and conditions.

Cuenta Corriente (current account) will have a low interest rate, debit card and cheque book. Cuenta de Imposcíon a Plazo (deposit account) will offer interest depending on the size and length of time of deposit

Libreta de Ahorro (savings account) has a low interest rate and some times debit facilities are available to withdraw cash from the ATM

On resident's accounts the bank will retain 18% of any interest earned on deposits. All banks will prepare an end of year statement giving your average annual balance, which is necessary should you need to make a Wealth Tax Declaration

• Transferring Funds

Within the European Union there are no restrictions on transferring funds overseas. However, it is necessary to consult your particular bank if you wish to transfer outside the EEC. If you move more than 13.253€ from Spain to another country, or transfer over 80.000€ within Spain, it is necessary to inform the authorities.

Most banks charge high commissions on overseas transfers but some banks do charge on transferring overseas pensions.

Cheque books are available on checking accounts however they are not commonly used in Spain . If issuing a cheque it is advisable to take the following precautions:

Write 'a abonar en cuenta' or cross the front with two parallel lines to ensure that the cheque can only be deposited in the payees account
Write in ink Do not leave spaces
Writing a cheque with insufficient funds is illegal in Spain

• Bank Statements

Bank Statements can be sent to any address specified by the account holder, in Spain or overseas.

The information on the statement should be fairly straightforward but here is a brief glossary of terms:

Date of statement - Fecha del extracto
Current balance - Saldo actual
Date of transaction - Fecha
Bank number of the transacting bank - Oficina
Transaction code or word - Concepto
Date when a deposit starts to accrue interest - Valor
Transaction value - Importe
New balance after each transaction - Saldo

The identifying number of your account is the same on the statement and chequebook. It is recommended that the entire number be used in all correspondence to avoid any confusion.

Bank number - first 4 digits
Branch number - next 4 digits
Control number - next 2 digits
Account number - last 10 digits

• Standing Order

It is possible to pay regular bills, local taxes, utilities etc, through the bank by setting up a Standing Order (domiciliación). You will need to complete a form either supplied by the bank or the billing company and then ensure that both bank and billing company are aware of the arrangement.

• Overdrafts

Overdrafts in Spain are uncommon and are generally looked down upon. It is essential that you have sufficient funds to cover any standing orders to avoid facilities being withdrawn through lack of payment and the need to pay a fee to be reconnected.

Mortgages in Spain

Obtaining a Spanish mortgage (Hipotecas) is not difficult in Spain for a resident or non-resident. All banks rate applications according to their own policy and require different documentation as proof of earnings and ability to repay. There are also many mortgage brokers who can help you secure the best mortgage in Spain for your status. Interests on mortgages in Spain are low. Variable interest mortgages can be had at 3-4% per annum and fixed interest mortgages from 5-7%.