As soon as you know you want to buy a property in Spain, you will need to open a bank account there. Not only do you need a Spanish bank account to purchase a property, but you will also need to be able to set up direct debits to pay for utilities and bills.
Most of the main Spanish banks will cater well for English speakers, and you will generally be able to request that your contract comes in English – which will obviously ensure that you understand what you are signing! It is also a good idea to make sure that a branch close to your new property has at least one English speaker working there.
A number of different types of account are available – both for residents and non-residents, although of course the resident accounts are more flexible and have a greater number of benefits. Each bank has a range of accounts, such as those specifically for pensioners, or small businesses.
Most Spanish banks charge a fee for servicing your account and some charge more fees than others for all the extras, like domestic and foreign bank-to-bank transfers. Others offer fee-free accounts with certain conditions attached, and there are some particularly interesting accounts available for retired residents, with free credit and debit cards, cashback on utility bills (Santander offers a cashback scheme on your expenditure), and free domestic transfers. These accounts are popular as bank charges in Spain can be quite high, and some banks charge much more than others.
To open a non-resident account in Spain you will need your passport and some funds - and you may be asked for a copy of a UK bank statement. You will also need to show the address of the property you are buying and proof of your UK address. If you later become a resident, you can change your account to a resident's account. This will have advantages, but as in the UK, tax is taken at source.
Spanish banks do not generally issue cheque books; instead, payments are usually made by credit and debit cards (or cash of course). You will usually receive an annual fee for a Visa or Mastercard credit card; this will generally be around €30-40, and as in the UK, gold cards for higher earners come at a higher fee.
The main Spanish banks have reorganised, refunded and modernised themselves since the financial crisis hit in 2008. The five big banks across the country are Santander, Banco Popular, BBVA, Sabadell Atlanticó and La Caixa.
All utility bills in Spain must be paid by direct debit, so it’s important to keep your account topped up to cover these inevitable monthly payments – and these will be taken from your account, whether you have money in them or not! Defaulting incurs fines and threats to cut off the water, gas or electricity supply. Some utility bills are paid monthly, others bi-monthly or quarterly.
Nowadays card payments in Spanish shops, restaurants and supermarkets are made with chip and pin. If you pay with a UK card, you will often be asked if you want the payment to be in euro or sterling - always say in euro as the exchange rate for exchanging the amount into sterling charged by the card company will be better than that given by the shop’s Spanish bank. Visa and Mastercard are accepted in most places - but the Spanish fall far behind other countries in accepting American Express cards thanks to the additional charge that must be paid to Amex by businesses.
If you think you might go overdrawn, make sure you arrange this with your bank before the account is bereft of money. Most banks offer a facility to borrow money up to €5000 to cover major expenses - but rates will vary depending on the type of bank account you have and whether you have good credit record.
Generally, Spanish banks offer a good standard of service. You may be assigned a personal bank manager and the large banks have good internet banking sites which makes handling your money from the UK or Spain much easier. Be prepared for queues at the counter though, especially at certain times of the day. ATMs are to be found everywhere in Spain, but don’t forget that some may charge if they don’t belong to your bank’s group.
Spanish banks have different opening times in summer and winter and may not be open on Saturdays. Generally, they are open weekday mornings until 1-2pm.