Opening a Spanish Bank Account
There are two types of banks in Spain: standard banks (or bancos) and savings banks (known as cajas). Many of the services offered by the two are similar and the main difference is that some of the savings banks are confined to, or have many more branches in, the region of Spain from where they originated.
What to look for when opening a Spanish bank account
There are a number of considerations to take into account when choosing a bank:
- Number of Branches: this is one of the most important issues as it is standard in Spain to be offered a free cash withdrawal service only at ATMs of the bank of which you are a customer. If withdrawing cash from the ATM of another bank, commission charges can vary between 1€ and 5€.
- Internet banking: While available from most banks, it is clear that some are more advanced than others, offering helpful apps for your mobile device for example. Most of the big banks offer internet services in English, but the number of services available varies considerably.
- English Speaking staff: in many areas of Spain this is not a standard service.
- Bank charges: Unfortunately in Spain it is standard practice to charge customers to maintain accounts as well as for procedures. It is a matter of checking and comparing charges for procedures that you are likely to carry-out on a regular basis.
- Banco or Caja: Cajas tend to be more regional and therefore have less branches or ATMs at a national level. Given the commissions that have to be paid then normally a banco will represent lower overall charges.
Spainwide Spanish Bank Account Service
Spainwide offers a free service to open a bank account in Spain. We are working together with Banco Sabadell, one of the top four banks in the country, which is currently offering the most complete banking service at attractive rates.
For more information on our banking services, please click here
Mortgages in Spain
Buying a holiday home remains very popular in Spain and most people will require a mortgage to do so. Typically, mortgages in Spain will cost somewhere between 1% and 2% of the value of the home. Given the current economic situation banks in Spain are somewhat more careful when making funds available and will now tend to offer foreign residents a maximum of 70% and residents in Spain 80% of the value of the property. Of course, with many foreign citizens now resident in Spain, they are eligible for the higher rate.
Banco Sabadell offers a number of different mortgage products, each of which is specifically tailored for individual requirements. All are available via Spainwide. If you would like to get advice, in English, on which mortgage plan would be the most appropriate for your circumstances then click here to speak to a representative.
Loans in Spain
A variety of loans may be applied for via Spainwide:
Car Loan: Available up to 60,000 euro and a repayment period of up to 6 years. You can choose between 12 or 14 repayments per year.
Student Loan: You can finance all or part of your academic courses, university studies, language courses, and even take a specialisation course or attend a seminar, without financial worries. We can also help you finance related costs (registration, materials, accommodation and relocation). It is even possible to delay repaying the capital when the training has finished.
The amount available is up to the cost of the course. If the cost of the course is less than 15,000€ then other costs may be financed such as materials, housing etc.
The repayment period is up to 10 years with an option of either 12 or 14 repayments per year. A period of interest only repayments during the course is available up to a maximum of 5 years.
Family Loan: Should you wish to renovate your home, buy furniture, take a trip or pay an unexpected expense, now you can and for very little per month, and with total comfort. With a Family Loan you choose the method of payment that suits you best or, if you prefer, pay nothing for the first 3 months.
For more information on applying for a loan via Spainwide, click here to speak to a Spainwide representative.
The Spanish Banking System
The Spanish banking system is highly regulated, a situation further compounded by Spain's introduction into the European Union and the adoption of directives relating to such things as the equity and solvency ratio of credit institutions.
In recent decades, the banking system has been transformed from a public, highly centralised and conservative institution into a dynamic multilayered sector. Moreover, the recent improvement in the economy has brought about an even greater dynamism with reduced interest rates and a wider range of services and products.
The Spanish banking system is made up of the following sectors:
1. The Bank of Spain
2. Other banks:
- Spanish and foreign banks.
- Savings banks.
- Credit co-operatives - Rural savings banks.
3. Financial institutions:
- Credit Financial Establishments-for such things as leasing, factoring, mortgage loans etc.
- ICO-Instituto de Credito Oficial (Institute for Official Credit). This institute acts as the State's finance agency and investment bank.
The Bank of Spain
The Bank of Spain largely acts as a regulatory and supervisory body for the banking systems in Spain. With the introduction of the European Monetary Union in January 1999, the Bank of Spain no longer controls monetary policy but is subject to the dictates of the European Central Bank in Brussels.
The private banking sector has undergone something of a revolution over the last 2 decades with the introduction of many foreign backs of international prestige into the market. This has brought about a much greater dynamism, a more extensive range of services to corporate and private and a more active, client-based approach.
Savings banks are very important in Spain and take up much of the private savings sector. They lend mainly to private customers via mortgages and loans. They are also restricted by law and are obliged to invest in the financing of major public and private projects.
Over the past few years, several Spanish banks have merged to take advantage of their collective resources and synergies. This has also helped them improve their international projection especially in South America.
Access to Finance
Traditionally, the Spanish Banking sector has been quite conservative when it comes to providing finance although short-term loans are normally quite easy to obtain. For longer-term financing they will normally ask for personal guarantees or collateral generally in the form of a property. The most common type of loan provided is the loan agreement or overdraught where the borrower has access to credit up to a maximum amount and during a limited time period.
Savings banks generally focus on loans for projects within their local areas. Commonly, these loans have to do with home purchase, agriculture as well as job creation projects.
The Official Credit Institute (ICO) often proves to be an easier option for smaller firms looking for finance for such things as investment in capital goods and expansion. The European Investment Bank is also becoming increasingly involved in the Spanish investment market by offering loans for specific areas and industries.
Updated March 2014