Banking in Spain: Opening and Managing a Spanish Bank Account

There are two main types of banks in Spain:

• general retail and commercial banks (bancos), including registered foreign banks
• savings banks (cajas de ahorros)

The core banking services offered by both these types of entities are generally the same. One of the main differences is that cajas de ahorros are traditionally confined to specific regions or provinces, although the major ones have branches throughout the country.

Spain has one of the highest ratios of bank branches per capita in Europe; however, not all of these will offer an English-language service.

Choosing a Bank in Spain

It is quite usual to find that the products offered by banks, and in particular the tariffs they apply, vary significantly.

When choosing a bank, take the following into consideration:

• Location: the closest branch may not necessarily be most suitable. For example, the closest branch may not have English-speaking staff or ATM service, while these services may be available at a branch in the next town. In some small villages branches have extremely limited opening hours.
• Distribution: it can be beneficial to choose a bank with a strong presence in Spain as most banks charge a commission for using ATMs that are not a part of their ATM network; choosing a small regional bank with only a few local branches may make immediate access to banked money an expensive exercise. Some local banks may also opt out of pan-European international payment initiatives, meaning that international transfers would be more expensive to process.
• English-speaking staff: some banks have English-speaking staff at specific branches to help foreigners.
• Telephone/Internet banking: almost all banks in Spain now provide these services; some also provide them in English. There are a few that offer Internet-only banking services, although these are only available to Spanish residents.
• Statements and other documentation: some banks offer the option of receiving bank statements and other related paperwork in English.

Ranking of Top Banks in Spain

The top banks (bancos) in Spain include the following. Most provide website services and information in English:

• Banco Santander
• La Caixa
• Banco Bilbao Vizcaya Argentaria (BBVA)
• Caja de Madrid (in Spanish)
• Banco Popular
• Bancaja
• Banco Sabadell
• Caja de Ahorros del Mediterráneo
• Caixa Catalunya
• Bankinter
• Ibercaja (in Spanish)
• Caixa de Galicia (in Spanish)
• Barclays Bank S.A.
• Unicaja (in Spanish)
• Bilbao Bizkaia Kutxa (BBK)

Types of Bank Accounts in Spain

The 3 main types of account are:

• Current/checking account (cuenta corriente): the most typical type of account for undertaking essential, day-to-day banking activities. The interest rates for current accounts that remain in credit are usually quite low, if they pay any interest at all.
• Savings account (cuenta de ahorro): offer higher interest rates, but with a limited range of banking services and/or limited access to money, particularly at short notice.
• Deposit account (cuenta de depósito): as with savings accounts, these are aimed at customers who want to earn a higher rate of interest on their money, but this type of account does not permit day-to-day banking operations.

Most banks also provide these products in other major currencies (such as US Dollars or GB Pounds), although a foreign currency account may not be useful for day-to-day banking needs, particularly if regular transactions are made in Euros for payments such as utility bills.

When opening a savings account, a savings book (libreta de ahorro) is usually issued instead of an ATM/Debit card in order to access banked money. In ATMs of some banks (principally the ATMs of cajas de ahorro) a savings book can be inserted into a dedicated slot which will update the movements on the account within the book, and also allow the account to be viewed and cash to be withdrawn. 
Note: this only applies to ATMs of the bank with whom the account is held; it cannot be used in ATMs of other banks.

Residents and Non-residents

Banks offer accounts to both residents and non-residents, though residents will be offered a wider range of products and higher interest rates, and commissions will tend to be lower.

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

• live in Spain for at least 183 days per year
• use Spain as the base for a business or professional activity
• have a spouse and/or children under 18 who are permanent residents in Spain

Residents must submit an annual tax return. Non-residents do not need to submit tax returns, although they do need to confirm their non-resident status by completing a Declaration of Fiscal Residence (Declaración de Residencia Fiscal) form and an NIE number when opening an account. When a person first visits the branch to open an account and sign the relevant paperwork, the bank should provide this declaration form and then submit it to the tax authorities on their behalf once it has been signed.

The Declaration of Fiscal Residence is valid for up to two years. When it expires, another declaration will need to be signed. At this point the bank should get in touch with a client and advise them that they need to renew it. If a person decides to become a permanent resident, they must advise the bank, which will inform the tax authorities of the change in status.

Opening a Bank Account in Spain

To open a bank account in Spain the following is required:

• applicants must be aged 18 or over
• photographic proof of identity (passport or National Identity Card from the country of origin for each of the applicants)
• proof of occupation or status (employment contract/payslip, letter from accountant/lawyer, pension or disability payment confirmation, student card). This is an extra requirement introduced in 2007 by the Bank of Spain as a measure to combat money-laundering
• residents also need to produce their Foreigner's Identification Number and certificate (Número de Identificación de Extranjeros or NIE)
• confirmation of address (utility bill, driving licence or council tax bill; proof of address must have been issued within the last 3 months)

An applicant with all of these documents available when visiting a branch should have their account opened almost straight away, although it will take a few days for the cheque book and ATM/debit card (if applicable) to be issued. In this instance, a bank may provide a temporary pass book (libreta) so that money can be withdrawn, until the ATM/debit card arrives.

Some banks accept applications for new accounts submitted by post, although a visit to a branch may be needed to complete the identification process and present the originals of the personal documents.

Note: For security reasons, most banks will not send cheque books or ATM/debit cards to overseas addresses; they will need to be collected from the branch if there is no address in Spain to which they can be sent.

Bank Charges in Spain

In spite of the intense competition in the Spanish banking market, bank charges and commissions in Spain are high compared to other (particularly EU) countries. There is no free banking for current/checking accounts with a credit balance; expect to have to pay account opening and maintenance fees, as well as charges for specific transactions.

These tariffs can vary quite significantly between different banks, so before opening an account, think about how the account will be used and do a comparison of the tariffs.

Some banks offer packages aimed at non-resident customers which may, for example, offer reduced rates for international money transfers, free ATM withdrawals and so on for a fixed monthly or quarterly fee.

In certain circumstances the tariffs applicable on an account can be negotiated with the relationship manager in a branch, so it pays to investigate what offers are available before opening any account.

Numerical Value Formats and Numbering Standards in Spain

As with most countries in continental Europe, written numerical values in Spain are different from their "Anglo-Saxon" equivalent. Decimal points are represented as commas, whereas the separator for thousands is a full-stop. For example:

• One million euros appears as: €1.000.000,00
• Twenty three point seven percent appears as: 23,7%

Current Account Numbering Standard

All bank accounts in Spain follow a specific numbering convention. The account details will always appear in this format on bank statements and other documentation. The format is as follows (with random numbers shown as an example):

• Entity (entidad) = The bank with whom the account is held. Always four digits
• Branch (sucursal or oficina) = The number of the branch where the account is held. Always four digits
• Control Digit (Dígito Control, or D.C.) = An internal bank code. Always two digits
• Account Number (número de cuenta) = The personal account number. Always ten digits

IBAN (International Bank Account Number) Numbering Standard

The bank account number will also "convert" to the IBAN standard. IBAN is the globally recognised standard adopted by almost all financial institutions in the world, and is particularly important when making international money transfers. The number format is as follows (using the above current account number as an example):

• ES66 – 1234 – 0123 – 1201 – 2345 - 6789

The first two digits of the IBAN correspond to the country where the account is held: ES = Spain. The next two digits are calculated internally, based on a pre-determined formula and using the digits that actually comprise the account number. The remaining digits are the bank account number details, separated into "blocks" of four.

This information is usually printed on bank statements. If not, these details are available from the branch, Internet or telephone

ATM/Debit and Credit Cards in Spain

In most cases the ATM card is also a debit card; two separate cards are not required.

ATMs provide the standard facility of being able to withdraw cash. Most will allow the account holder to view the balance and movements, and make transfers. In some cases they provide more diverse facilities such as being able to top up a mobile phone balance and buy tickets to the cinema and sporting events.

Almost all provide the option of selecting the language in which to use the service, including English.

Note: There is often an extra charge to use an ATM that is not part of the ATM network of the bank where the account is held.

The vast majority of establishments in Spain accept debit cards for payment of goods or services. Most of them will not accept cheques which are not guaranteed. Some form of identification (passport, driving licence) is required when using a card for making a payment.

When using a debit card either to withdraw cash from an ATM or to pay for goods in a shop, the system will check if there are sufficient funds in the account or whether there is a pre-agreed overdraft in place. If either of these are in place, the withdrawal/payment request will not be accepted, regardless of the amount for which it is in excess.

Lost or Stolen Cards

A lost or stolen cash card must be reported to the bank as soon as possible, or phone the appropriate number:

• Red 6000 - Tel: 915 965 335
• Servired - Tel: 902 192 100 or 915 192 100
• Telebanco 4B - Tel: 902 144 400 or 913 192 100
• To complain about service from a Spanish bank (in accordance with the regulations set out by the Bank of Spain - Banco de España): Click here (in English)

Credit Cards

The use of credit cards instead of cash for undertaking transactions is steadily increasing in the Spanish retail market, and they are accepted in the majority of establishments.

Most banks also offer credit cards which can either be applied for during the current account opening process, or can be opened independently, (for example via a different credit card provider). However, a credit card applied for via an independent provider, will still require a current account from which the monthly payments are made. Some independent providers will only offer credit cards to Spanish residents.

Making Domestic and International Payments from an Account

It is very easy to set up a direct debit (domiciliación de recibos) or standing order (traspaso) on an account. The branch can provide the required forms. Most utility companies supply a template when subscribing to their service; the subscriber simply adds their signature and bank account details to the form.

These payments can also be created and managed via most Internet and telephone banking services.

Note: direct debits from an account will remain in force until they are cancelled by the account holder. Even if a subscriber cancels a service being provided by a utility company, (such as telephone/electricity/gas) the company may continue processing the direct debit, even though the service has been cancelled. Any claims for the return of incorrectly charged direct debits will usually be returned without question within 30 days of the debit being made on the account, but after 30 days the matter can become very complicated.

When cancelling a utility service or transferring the "ownership" of the service to someone else, remember to cancel the direct debit straight away.

Domestic and international transfers to/from an account

Domestic transfers (transferencia) can easily be made from an account, either from the cashier's desk in the branch, via the Internet/telephone banking service or from an ATM.

It is also easy to send and receive international transfers, which are treated in more or less the same way as domestic transfers. The only extra requirement is the IBAN number of the account in Spain, which must be provided for inward transfers, or the IBAN of the receiving account for outward transfers.

SEPA (Single European Payments Area)

In 2006 the European Central Bank started work on the SEPA initiative, with the collaboration of most of the major banks in the European Union.

The ultimate goal of the SEPA initiative is to implement a transparent mechanism for making cross-border payments between countries of the European Union. However, this will depend on whether the bank is a subscribed member of the SEPA initiative. For example, a small regional bank with only several local branches may have chosen to opt out of the SEPA implementation, which means that the cost of international money transfers will be passed on to the customer (and will therefore be more expensive).

Paying with Cheques in Spain

Personal cheques (talón or cheque) are rarely used in Spain, and are not accepted as a form of payment by most establishments as they are not guaranteed (note: debit and credit cards are not cheque guarantee cards).

There may be certain situations in which a cheque is required, for example paying the deposit on a house to an individual. Before issuing any cheques, particularly for larger amounts, it's recommended to check the commissions that may be applied by the bank, and see if there are alternative and cheaper means of making the payment.

Note: Most banks calculate the commission for processing cheques as a percentage of the nominal amount of each cheque, so if a cheque is written for a large amount the commission will be very high.

An alternative method of paying by cheque is to request a Bankers Draft (Talón Bancario or Cheque Bancario), drawn on the bank and branch (Note: a fee is charged for a cheque issued by the bank).

According to the laws enforced by the Bank of Spain (Banco de España) it is illegal to write a cheque if there are not sufficient funds in the account to cover it. If this occurs, the account holder will have to pay a penalty, usually 10 percent of the excess amount, as well as the charges levied by the bank for processing an unpaid item.

Filling in a Spanish cheque

1. Bank account details.
2. The amount, following Spanish numbering conventions. The # character may be used before and after the amount to prevent it from being altered (it's not obligatory).
3. Cross the cheque.
   Note: by default, most Spanish cheques are not crossed when they are printed, meaning they can be exchanged for cash by the holder of the cheque. This means that if the cheque is lost, it can be cashed by anyone that finds it. For security, cross the cheque with two lines as shown, and write the words PARA ABONAR EN CUENTA (For Payee's Account) in between the lines which ensures that the cheque can only be paid into the payee's bank account.
4. PAGUESE POR ESTE CHEQUE A… = Pay this cheque to…
5. The town in which the cheque was written (usually pre-printed on the cheque)
6. Write the date of the cheque, with the date and year as numbers, the month in words (in Spanish), for example 19/10/2008 = 19 DE OCTUBRE DE 2008
7. The cheque number.
8. Signature goes here. (Note that the cheque does not include the account holder's name)
9. The cheque number and account details in digital format. Do not write in this section.