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Bank accounts

Resident/Non resident account:

To open a resident bank account you will need your residencia/residential permit, for a non-resident account you will require your passport. You will not be able to open a resident account whilst waiting for your residencia to be processed.

Despite the recent change in the law which no longer requires an EU citizen to apply for a residencia the banks are currently still demanding to see one. Once in possession of your permit you must change a non-resident account immediately to a resident one. The only real difference between the two accounts is that a resident account has 15 per cent of any interest withheld by the bank. This money may be returned when you file your tax returns at Hacienda if you have not earned enough money to be liable for tax.

Types of accounts

There are three main accounts that you can hold. A current account (cuenta corriente) has the benefit of a chequebook, but generally has very low interest. A savings account (libreta de ahorro) which also carries a low interest but offers cash card facilities and a written record of your account. The third main account is a timed deposit account. Any interest that is earned will depend on the length of time you are prepared to deposit the money.

When writing cheques you should always put the person’s name or company name. You should never make the cheque out to Al Portador (the bearer) because if it is lost anyone finding it will be able to cash it. Abonar en cuenta, which translates as ‘to be credited to the account of’, should be either written before the person’s name or by crossing the front of the cheque with two parallel lines if you want to ensure that a cheque can only be deposited to a certain account.

It is illegal to write a cheque when you have insufficient funds in your account. An account in Spain has 20 digits; your chequebook will carry the same number. The first four numbers identifies the bank, the following four indicates the branch of the bank. The next two digits are control numbers and the remaining ten numbers are your actual account number. To avoid any mistakes banks recommend that you use the full 20 numbers.

Banking Services

Banks offer various services including standing orders these are called pago domiciliado. The bank is ordered to pay such bills as electricity, water, community fees for you when they fall due. This is usually, though not always a free service. It is quite a simple procedure to operate you just inform the bank and the company involved. If you have set up standing orders, ensure you have enough money in your account to cover the costs or you could find that the services are cut off due to not being paid, probably resulting in embarrassment and reconnection charges. Always ask your bank what the charges are for certain transactions. As the saying goes nothing in life is free, and this has never been as true as in the Spanish banking system. However, all fees are approved by the Governing bank, which is the Banco de España. Do expect to pay an annual fee for a cash dispenser card. Likewise, expect to pay for the bank to look after your money, called literally a maintenance charge, which will be automatically debited from your account.

Mortgages

Residents and non-residents can apply for a mortgage or Hipoteca in Spanish. It is always better to shop around as interest rates vary dramatically from bank to bank. At the moment interest rates are very low so some would consider a fixed rate option. There is another option that does not exist in England. This mortgage carries a variable interest rate but you fix the amount you want to pay each month and while this does not change with interest rates what does change is the period of time for repayment. This way you could initially state a ten year period and if the interest rate is lower when you took the mortgage out your mortgage could be paid within seven or eight years. Of course if the rate is not favourable the reverse could happen. Whatever type of mortgage you choose it is very important to get good, legal advice. This is a long term financial commitment and as with all financial matters it is better to be safe and sure now rather than sorry later.

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