Banks and banking for expatriates living in Spain. Includes information about: accounts for foreigners, Transferwise, Revolut, VISA cards, debit cards, transaction fees, online banking, cajas and foreign-owned banks.
... be aware that when you go to a local bank to open your account, the employee probably won't speak English, and won't have experience in this type of account..."
First, a small cultural note: for writing large numbers in Spain they use a “.” to separate groups of thousands whereas some of us normally use a “,” eg. 1,000,000.00 (US expats) = 1.000.000,00 (Spain).
Second, if you move to Spain you will have to own a Spanish/Spain-based bank account. Basically you need to be able to pay your utility bills from a bank account with an IBAN starting with ‘ES’. It's incredibly annoying and (potentially) illegal given the EU directive requiring institutions to place no restrictions on the country pre-fix for accepting payments.
Third, during the application process for your visa or residency, you will almost certainly have to have a European bank account in order to pay your annual health insurance premium. As a not-yet-resident, this could be problematic. For our NLV application we ended up having to make special arrangements to pay by credit card and paid an extra fee to do so. The other option was to pay by wire transfer, which is also $30 charged by my bank.
Behold, there is a solution!
Recently a new category of banking options for expats has emerged. So-called “neobanks” or “challenger banks” offering online-only and foreign currency account banking to compete against the traditional brick and mortar retail banks. Wise and Revolut are two of the most popular examples. Spain has a homegrown one called Bnext. They are both offering cheap currency exchanges and digital banking in many different currencies and will even send you a visa debit card (although it's hardly necessary with Revolut since they offer Apple Pay through their digital card). I have both cards. But, I mostly use my Revolut card.
Most of these challenger bank accounts will have a free option, I.e., no monthly maintenance fees. This is a great option if you want to just use your account for internal transfers and are willing to use Apple or Google tap to pay options at retail (which, btw, are everywhere! I almost never have to carry cash or any cards). Revolut, N26, and some others offer premium monthly plans that include some interesting and useful bonus features beyond a fancy physical card, including travel insurance, electronic items insurance (especially good for traveling with a laptop!) and more.
Some people in the Facebook group asked me why I was mainly using my Revolut card when I could have only used my
TransferWise card. So, which is better between TransferWise and Revolut? The short answer is: both. Since some people need primarily to transfer currency between countries, say, transfers from your parents or to your kids, and for that Transferwise is great. For your own money management or for transferring money from other Revolut users, go with Revolut. Also, in a breakdown of fees between the two, Revolut has lower fees for larger transfers and currency conversions.
I fully expect to expand this article to a full review and breakdown, but seriously, there's no reason not to have both. Neither charge a regular fee unless you upgrade to their premium account, and both offer very very competitive (actually they totally beat the banks) rates on exchange.
There are still some government fees and utility bills that can only be paid with a Spanish IBAN number, despite the law clearly requiring them to accept all IBANs. In this case you should consider an N26 or a BNext account, or you can get yourself a resident or nonresident bank account through one of the traditional retail banks.
It was recently pointed out that because the systems work so well, it facilitates the continued success of the black market.
There are two types of traditional bank accounts for foreigners:
The regulations are clear, but be aware that when you go to a local bank to open your account, the employee probably won’t speak English, and won’t have experience in this type of account, or may offer you an account that does not earn interest. Furthermore, they may charge you extra fees -eg. setup costs - for this type of account; they may also tell you about “setup fees” that never happen anyway. Paying the utilities and rent is typically done by granting the ability to debit your bank account. Checks are rarely used. A landlord may ask for the rent in cash—that’s so they don’t have to declare the rent on their income tax form. Undeclared money is called dinero negro or dinero en B—fairly common in Spain. Banks charge high fees in Spain, and mutual funds/money markets are not very developed, so it may be better to keep most of your money back in your country. As an example of fees, La Caixa charges the following for transfers into and out of the account.
There may also be yearly fees, fees for each debit card, even fees for the stamps they put on correspondence with you. Shop around, these fees may be negotiable. Some banks will offer you a bank book, called a libreta.This is fine for balancing your accounts and keeping track of your current accounts, but much more convenient is the debit cards using the Visa transaction infrastructure. Try to get both if you can. In general, the Spanish banking system is modern, especially so after a massive bank consolidation in 2017 rescued a large number of customers of the smaller banks. It was recently pointed out that because the systems work so well, it facilitates the continued success of the black market. Almost all banks offer online banking, transfers between banks happen fast, and relative anonymity is relatively assured for now. USA: There are Citibanks in Spain, but it doesn’t make your international banking any easier: the same charges apply as if it were a different bank. With some Spanish banks, you can open both dollar accounts and euro accounts, and transfer between them. If you’re under 26 you can qualify for a foreigner’s account with Caixa Catalunya that includes a Visa debit card and all transaction fees are free (in general, not including other banks’ fees). They seem to have nice people, but you’ll probably have to speak Spanish. Some online banking systems are very good. Cajas are nonprofit banks. Being non-profit, the Cajas spend their profits on cultural programs. The best art exhibitions I’ve seen in Spain have usually been thanks to the Cajas. As banks, they generally offer lower fees (but tend to have longer lines, too).
Information on exchanging currency from sterling and dollars to euros for expatriates living in Spain.
Information on income taxes and income tax rates in Spain, paying tax in Spain, special taxes, VAT/IVA, double taxation, taxes on property and real estate, and US forms and publications for expatriates living in Spain.
A great article from Mark Wilkens of the Rights Group regarding the actual costs of buying property in Spain 2007.
Information about filing taxes for Americans in Spain, including filing Spanish taxes, filing US taxes, tax rates, special tax rates, income credits, residency determination and typical scenarios.
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