Banks and Bank Accounts

Everyone who buys property in Spain will need to open a bank account in Spain - probably a current account (cuenta corriente). Non-residents can open a non-resident account (cuenta extranjera).

For prospective property owners, opening a Spanish (euro) bank account is often felt to be a necessary first step. You will need one in order to get a Spanish mortgage ('hipotetica') and to contract for services from electricity, water and telephone utilities companies. You don't necessarily need one to make the initial mortgage application(s).

There are many local and international banks in Spain but not all of them offer the same level of service, retail banking charges vary significantly, branch networks vary from region to region and not all banks are well prepared to deal with the requirements of overseas clients.

Spanish banks have more branches, more staff and tend to be more bureaucratic, more costly and more time-consuming to use than you may be used to in the UK. Branches are often like 'open plan' offices and it is usual to approach whichever desk and person is free. There are many more cash machines than in the UK and credit cards are used universally, but don't expect to use one for mobile phone 'recharges' - the profit margin is too low.

You may be provided with a chequebook (talonario), although cheques are not used with the same frequency as in the UK. Note that post-dating a cheque is ineffective; it can be drawn on immediately. Many Spaniards ask for cheques to be made out to the portador i.e. cash, to avoid declaring it for tax purposes.

It is important to get your choice of bank right because having to change your bank later on can only be described as a complete pain in the neck (surveys show that people change their spouses more often than their bank).

Furthermore the charges that banks levy on services such as receiving international transfers and issuing guaranteed cheques can be scandalously high so making the wrong choice of bank can drive up the cost of your property purchase by 1% or more. Residents have 15% of interest earned deducted direct for tax purposes, though you can recover this if you are not liable for tax. Bank charges in Spain are high, even for routine operations. Commission on transfers out of Spain vary tremendously.

Transferring money between accounts at different banks - within Spain, or internationally - costs a lot more than you might be used to. A 100,000€ transfer can be eroded by 500€ by the time it reaches the destination bank. If you are the 'sender' you can specify a) sender pays charges or b) recipient pays charges or c) charges are shared. Cash withdrawals and deposits do not usually carry a charge.