Banking in Spain

When sending money to or from Spain, you’ll need a Spanish bank account in order to receive the funds, and to make transactions whilst in Spain (avoiding potential charges from your UK bank). It will also enable you to set up Direct Debits to pay for various utility bills, solicitors’ and agents’ fees, taxes etc.

The Spanish banking system is as sophisticated as that in the UK, so whichever bank you choose, you can expect to find a large network of branches and ATMs that you can use located across the country, and online services allowing you to operate on a 24/7 basis. As in the UK, charges and tariffs
can vary significantly from bank to bank. Free banking is a rarity in Spain.

Choosing a bank

Don’t just plump for the first bank you see. There are a number of considerations to bear in mind before making your choice.

• Size of network. Most banks charge a commission for using ATMs that are not a part of their own network, so make sure the bank has a good distribution of branches and cash points. If you choose a small regional bank which only has a few local branches, it could be costly when you try to access your money from elsewhere in the country. Regional banks may also charge more for international transfers.
• English-speaking staff: In some of the most popular areas with foreign buyers, some banks have English-speaking staff, which can make life easier if your Spanish is not good.
• Don’t just choose the closest branch to home as it may not have English-speaking staff or an ATM and in more remote places, branches may have extremely limited opening hours. It might be beneficial to choose a bank further away where these issues are eliminated.
• Telephone and internet banking. Nearly every bank in Spain now provides these services and some even provide them in English.
• Translated statements and other documents. Some banks offer customers the option of receiving bank statements and other paperwork in English – again, useful if your Spanish is not strong.
• Charges and free services. Consider the kind of transactions you’re likely to use and how much each bank charges for those transactions. For example, some banks charge a fee for banker’s cheques and transfers, others may charge commission or even offer it for free.

Resident and non-resident accounts

According to Spanish law, a person must meet at least one of the following criteria in order to be considered a resident:

• He or she lives in Spain at least 183 days per year
• He or she has a spouse and/or children under 18 who are permanent residents in Spain
• He or she bases a business or professional activity in Spain

Spanish banks offer accounts tailored to residents and non-residents. Residents will usually have access to a wider range of products and tend to get better interest rates and lower commissions and charges.

Residents must prove their status by presenting the bank with their residence identity certificate/card, which contains details of their NIE and home address. They must also submit an annual tax return.

Non-residents are not liable for capital gains tax or submitting tax returns though they do need to provide an NIE number and complete a Declaration of Fiscal Residence (‘Declaración de Residencia Fiscal’) form when opening an account. The bank should provide this Declaration form when the applicant first visits the branch to open the account and sign the paperwork, and the bank will submit it to the tax authorities once it has been signed.

The Declaration of Fiscal Residence is valid for up to two years, after which a new Declaration must be signed. The bank should contact the account holder when this renewal is due. If the account holder decides to become a permanent resident at any time, they must advise the bank, which in turn will inform the tax authorities of the change in status.

Opening a bank account

There several different types of bank account available, but the main ones you’ll be considering are:

• Current account (‘cuenta corriente’), for everyday banking activities. As in the UK, little or no interest is paid on accounts in credit.
• Savings account (‘cuenta de ahorro’), which with have a limited number of banking services and may not allow instant access to funds, though balances attract higher interest rates.
• Deposit account (‘cuenta de depósito’), offering yet higher interest rates no day-to-day banking services.

To open a bank account in Spain, applicants must be aged 18 or over and present the following documentation at a branch of the bank:

• Photo ID, typically a passport or national identity card from the country of origin (for each applicant if opening a joint account)
• Proof of occupation or status, for example an employment contract, payslip, pension or disability payment confirmation, student card, letter from an accountant or lawyer
• A confirmation of address not more than three months old, for example a utility bill or driving licence
• Residents also need to produce their NIE card/certificate

Presenting all these documents at once should ensure that the account is opened almost straightaway. A cheque book (though cheques are not commonly used in Spain) and ATM/debit card should follow within a few days, though some banks with provide a temporary pass book (‘libreta’) to allow withdrawals until the ATM/debit card arrives.

For security reasons, most banks will not send cheque books and ATM/debit cards to overseas addresses. If you don’t yet have an address in Spain to send them to, they will need to be collected from the branch.

Continue to section 7: Currency exchange