Information about the Spanish banking system as published by Round Town News There are a great number of banks in Spain and since April 1994, any European Union bank can open branch offices in Spain with few bureaucratic formalities. The Ministry of Finance (Hacienda) oversees the Spanish financial system in general, and the Banco de España is its instrument of monetary policy as well as the direct overseer of the banks. Types of Accounts Fiscal residents in Spain can open a current account and savings account for residents. Non-residents can only open current and savings accounts for non-residents. To open a bank account in Spain you will only need your passport or residence permit, and will be asked to fill out a form by the bank which will also set forth the bank's general terms and conditions. You will also be asked for your N.I.E. number. A current account (cuenta corriente) usually carries a very low interest rate, if any. You can ask for a cheque book. A fix deposit account (cuenta de imposición a plazo) will give you interest depending on the time period of the deposit and the amount deposited. Banks can be bargained with about these conditions! A savings book account (libreta de ahorro) also carries a low interest rate, but does give you a continuous written record of your account and in some cases can be used in cash machines for withdrawing money. The bank is obliged to retain 18% of the interest you earn, but not on a fix deposit by a non-resident. The bank should also prepare a statement giving your average balance for the year, to be used in your Wealth Tax Return. Transfers of Funds There are now no restrictions on transferring funds to and from Spain from other countries of the European Union and the EES. If you want to make transfers to or from countries outside the EU area, consult your Spanish bank. However, if you want to take out more than 13,253 Euro from Spain to another country, or move more than 80,000 Euros within Spain, you are obliged to communicate it to the authorities. Some banks are still charging heavy commissions on transfers of pensions from abroad, while other banks do not charge on such transfers. It is advisable to find out the conditions offered by the different financial institutions. The EU has decided to eliminate the commissions when using cash machines outside your own country, but inside the EU area. The cheque in Spain Write cheques only in ball-point pen or ink (never in pencil or typewriter with erasable ribbon!). Write (or accept) a cheque, to the person/business, that is to receive payment, and not to "al Portador" (bearer). To ensure that a cheque can only be deposited into the account of the person or business to whom it is made, write "a abonar en cuenta" (to be credited to the account of) before the name of the recipient, or cross the front of the cheque with two parallel lines. Do not leave blank spaces, which may be used to increase the amount. Keep blank cheques, destroy excess cheques, and never leave a blank signed cheque with anyone. Writing a cheque without funds in the bank is illegal. Bank Statements Most banks are willing to send your statement to any address you specify, in Spain or in your home country. The identifying number is the same as that on your cheques, with the first four digits giving the bank's number, the next four digits the branch number, then two control numbers and the last ten digits are your account number. Banks recommend that you use this entire number to avoid any confusion. Other Bank Services Standing Orders ("Domiciliaciones") You can order the bank to regularly pay certain bills when they come due - local taxes, garbage collection, electricity, water, phone, subscriptions. You must make sure that you have sufficient funds to pay such standing orders or you may arrive at your home to find essential services shut off for lack of payment (often requiring a reconnection fee!). Do not expect to get anything free from the bank. Ask for their list of fees for various transactions (which must be approved by the Banco de España). Mortgages (‘Hipotecas’) A resident or non-resident foreigner may take out a mortgage in Spain, including on State-subsidized housing ("VPO" or Vivienda de Protección Oficial). You may use a Spanish or a foreign mortgage holder, and the mortgage may be in Euros or a foreign currency. A resident may finance up to the whole value of a property. Interests on mortgages in Spain are low. Variable interest mortgages can be had at 4-5% per annum, and fixed interest mortgages from 5-7% so if you want to obtain a good interest you have to visit many banks to find out who offers the best mortgages. If you want to take out a mortgage with variable interest, the best reference for the variations is the I.R.M.H. (Indice de Referencia del Mercado Hipotecario) published by the Banco de España.