Banking in Spain
The first thing you need to know about Spanish banks is that they are over 170 banking institutions where you can lodge your savings or open a current account. The banks are separated into two main categories, Bancos (banks) and Cajas (savings banks). Currently, there are around 50 banks and 120 savings banks. In the last few months, many of the savings banks have merged to consolidate their position and strengthen their economic base.
Banking history in Spain
Looking at the history of banking in Spain and to better understand the differences between the two types of banking institutions, you have to trace the origins.
During the 17th century, the church acted as a lender. People were able to borrow money from the churches by giving them some form of deposit. When the money was repaid, these deposits were returned. If a certain agreed time elapsed and the borrower was not able to return the money, the church became the owner of the whatever had been deposited. This concept evolved into the savings banks as they are now known.
At the same time, wealthy families created private institutions that loaned money charging interest which had to be repaid with the loan.
As you can see, both these types of lending have evolved into the current system you will find in Spain, the Banks and the Savings Banks.
The Savings banks are partly state-owned while the Banks privately-funded institutions and co-owned by shareholders with several people forming the board of directors.
You will find today that Cajas still adopt their historical role and support community projects by investing in local social, educational, scientific and cultural projects. Most Cajas still retain the name of the Spanish region where they originated.
Unlike some countries, the Bank of Spain (Banco de España) serves as the central reserve and is a financial regulator.
Choosing your banker whether it is Unicaja, BBVA, Santander, Bankinter, Bancaja or any other bank is a difficult task and you should take into consideration many factors when opening an account.
A smaller size bank that is based locally known might be more suitable than one of the large institutions. It all depends on the individual´s need. A smaller bank gives you a better chance of forming a personal relationship with the staff and management who may be able to assist in making decisions. A larger institution may rely more on a central office and offer less personal services to the individual.
There is also an opportunity to open accounts with foreign banks who open branches Spain and may offer preferential services to existing customers who have accounts in the UK for transfers, foreign exchange and other services.
The top four banks according to gross profit margins in the previous tax year are Santander Central Hispano – Grupo Santander, BBVA, Banesto & Banco Popular. The top two cajas are Caixa Catalunya and Caja Madrid.
Spain is part of the Euro zone. There is usually no minimum amount of money to open an account in euros. You can also open an account in other currencies such as dollars or sterling but will probably need to deposit a minimum amount.
To open a bank account, you will be required to present your ID card or passport. You will also need to decide if you open the account as a resident or as a non-resident. The only difference is the tax payable which does not apply for a non-resident.
To open a resident account as a foreigner, you will need to present your NIE card or certificate.
For non-residents, you will need to obtain a certicate from the police stating this. The certificate can only be obtained by the applicant and is not issue immediately but has to be collected after 10 days. You can ask your bank to do this for you but the process takes much longer.
Every two years, the bank has to re-confirm non-residency status which means you have to go through the same process again.
There are various accounts available, the main ones being a savings account (cuenta de ahorros) or a current account (cuenta corriente).
A savings account normally attracts a return on your income if the amount deposited is above a certain limit.
The current account is used for your direct debits (domiciliaciones bancarias). The current account would charge a few euros for transactions and cards but could offer deals on the monthly direct debits, such a discount or paying back a percentage up to a certain amount in a year of the money spent through the card payments or from the direct debits.
Banks also offer other types of account for specific purposes such as the mortgage (cuenta hipoteca), fix deposit accounts (cuentas de depósitos a plazo fijo), credit account (cuenta de tarjeta de crédito) or investment accounts (cuenta de fondos de inversión).
People working in Spain can apply for the account to receive their salary (cuenta nómina) so your employer can pay directly into this account, the bank may offer you free banking for doing this and savings in card maintenance fees.
People under 26 years of age and students can apply for the under 26 account which comes with many deals and discounts such as free credit cards, free subscriptions to a range of teenage magazines, invitations and raffle to events and concerts. This would depend on the bank and you should ask what they offer.
If you qualify for the under 26 account, you need to inform the bank when you are opening the account and provide documentation to verify your condition, such as your student ID card or National ID card as proof of age.
Most businesses will allow MasterCard, Visa Electro or Maestro debit cards (tarjeta de débito) as methods of payment.
You can use credit card (tarjeta de crédito) to pay although terms and conditions for credit cards will vary according to your personal situation and the bank. Most banks charge annual maintenance fees for all cards and for the accounts as well.
Cheques are not accepted by shops and supermarkets and are not widely used in Spain.
To transfer funds into your account, you can use cheques or cash at a branch office or through bank transfers from another bank account. You can also deposit cash directly at the cash machine at some banks.
Withdrawing money from a cash machine from a different banking institution will cost you additional charge although some banks have joined networks to waive these costs. The two mayor networks are Servired, Euro6000 and 4B. Ask your bank if they are part of the networks and learn about the benefits you get from it.
Traditional bank opening hours have always been:
Monday-Friday: 9am-2pm
Saturday: 9am-1pm
Due to the economic climate, most banks no longer open on a Saturday.
All banks offer online banking and will issue passwords and transaction security cards to users.
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