So, you’re looking for property for sale in Calahonda. And you’re preparing for an exciting new life in sunny Spain awash with warm weather and cool cocktails, then one of the many practical items on your Iberian to-do list (just after bikini shopping), may be making sure your local finance situation is in order. A Spanish bank is something of a necessity for expats in Spain who want to avoid the hefty bank conversion fees levied by the use of foreign accounts, and a local bank account is also required for the payment of utility bills. So, before you start looking for that Calahonda property brochure – what do we need to think about when choosing and opening a Spanish bank account? Here is your guide to buying a property in Spain.
Foreign Banks
British banks Barclays, HSBC and Halifax/Lloyds have branches in Spain so customers may be able to transfer funds from their British accounts to their Spanish accounts free of charge. HSBC, however, only have two branches in Spain; one in Madrid and one in Barcelona.
Barclays Bank has had a much larger operation in Spain, with 430 offices and branches throughout the country, but those thinking of banking with Barclays should be cautious. Earlier this year the Spanish wing of the bank was taken over by Caixa bank, and given that in June expat customers of Barclays in Cypress and Malta were abruptly told their accounts would close unless they could be furnished with a six figure sum, Spanish expats could be in danger of suffering a similar misfortune in the near future.
Halifax, or Lloyds International has 28 branches in Spain, including a handful along the Costa del Sol. Although retail banking services of this bank were also sold to a Spanish bank, Banco Sabadell, a few years ago, hopefully expat customers in Spain will remain unaffected. Citibank and Deutsch Bank also have branches across major towns and cities in Spain and internet banking services.
Spanish Banks
With the highest amount of banks per capita in Europe, those deciding to choose the right bank in Spain may find it to be no easy task. Spain has more than 170 financial institutions, with about 10 major banks. These are divided into clearing banks (bancos) and savings banks (cajas). Bancos are mainly privately-owned national chains, whereas cajas are state-owned local organizations that are often involved in charitable causes or development projects. When choosing a bank an important factor may be the location of the bank in relation to your home and/or workplace. Larger banks tend to be more popular among expats in Spain for the simple reason that their branches and ATMs are more widespread.
Other considerations for prospective account owners may be the charges for bank transactions, which are unfortunately quite high in this country. Expats coming to Spain with funds in foreign accounts will also need to compare and contrast the charges for international transfers from bank to bank. If your language skills still leave something to be desired, then you will probably be hoping to find a bank where fluent English is spoken. This is more likely to be found at one of the major banks, than at a pueblo cajas in rural Spain. Also, although most large banks today provide internet banking, only BBVA and Banco Sabadel offer this services in English.
CaixaBank The 3rd largest bank in Spain and the most branches, with 6,631 in the country.
BBVA (Banco Bilbao Vizcaya Argentaria) Is the 2nd largest bank with internet banking in English.
Banco Santander Spain’s largest bank.
Banco Sabadel The new owners of Lloyds International Spain and TSB provide internet banking in English and other languages.
Banco Polular Espanol The fourth largest bank in Spain and owner of five regional banks, Banco Popular Portugal and formerly of Banco Popular France.
Fees & Charges
An unfortunate inconvenience for expats in Spain are the bank charges, which are higher than other European countries. Account owners are charged for all types of transaction, and international transfer charges can be as high as 1000 Euros, as was found recently by an expat who transferred a large sum to the UK after selling his Spanish flat. In addition to this, most banks charge an annual administration fee, which can be from 15-30 Euros.
Other charges can be incurred by credit and debit cards, cheque-books or adding additional account owners. In Spain there are three ATM networks used by banks. When using an ATM that belongs to a different ATM network, charges will be incurred. These charges vary from bank to bank, but can be as much as 4 euros for a withdrawal of 100 euros.
Opening a bank account in Spain
Bank accounts in Spain can be opened by both residents and non-residents provided they are over the age of 18. By Spanish law residents are one of the following; people with a spouse or children resident in Spain, people who work or have business in Spain or people who spend more than 183 days a year in Spain. Residents will just need to take their NIE (Numero de Identidad de Extranjero – Tax Identity Number) certificate, which is also required for the purchase of property or a vehicle in Spain.
Non-residents will need to take some form of recognized photo identification, such as a passport or a driving license, along with a ‘certificado de no residencia’ which can be obtained from a police station. For day-to-day banking, you can either choose to open a current account (cuenta corriente) or a savings account (cuenta de alhorro). Many opt for the savings account because although they have offer fewer banking services, the interest is higher than that of savings accounts.
