Taking Care of Your Savings...

Banks and Building Societies
The Spanish banking system has seen many changes over the past two decades, which were initially introduced due to the influx of foreign investors in the country, whilst more recent reforms have been largely influenced by the recession and borrower’s inability to repay loans and mortgages. General banking follows much the same principles as in other parts of Europe, although the taxation system can be difficult to digest, and leave foreign investors in particular wondering how their savings have disappeared. As in the UK, Spain has two different types of bank: the regular clearing/ commercial banks, or “Bancos”; and the “Caja de Ahorros”, which operate in a similar way to building societies. Each type of account provides all of the customary banking services, such as credit/debit cards and chequebooks and instant access to your money unless otherwise specified.

Resident And Non-resident Accounts
Spain also uses an additional category to define your banking terms and conditions, which vary according to whether you are a resident or non-resident. If your permanent place of residence is overseas, meaning that you plan to spend less than six months per year in Spain, you should be eligible to pay tax in your own country and as such will be classed as “Non-resident” in Spain. This means that you qualify for a non-resident account, and will need to supply personal identification such as a passport and/ or NIE number to apply. You will probably also be expected to supply evidence of your non-resident status, which will prevent the bank from retaining a percentage of the interest earned as tax. If your status changes and you choose to reside permanently in Spain you are obliged to inform the bank so that they can adjust your tax allowance accordingly. A resident account generally carries less fees, so if your main country of residence is in Spain, it is advisable to ensure that the bank offers you the correct type of account. This might involve providing evidence that you are a fiscal resident, and eligible to pay your taxes in Spain. Be aware that if you do not point this out, as a foreign person the bank may just assume you to be a non-resident and automatically open that account for you, costing you significantly more money each year!

Debit And Credit Cards
Once your account is up and running you will usually be given the option of having a debit card, which can be used to pay at the point of sale or obtain cash from ATM’s. If you have an adequate sum of money being paid into the account each month you may also be eligible to apply for a credit card. The terms and conditions of the credit agreement will vary from one bank to another, and are not necessarily the same as credit cards which you had back home, so it is important to read them through carefully before you agree to anything. If you do decide to use a credit card it is advisable to use it for making any online purchases, as it is a more secure method of payment than a debit card should your details be obtained and used fraudulently. Credit cards are not always available with non-resident bank accounts, even if you have adequate funds available to support the use of one.

Use of Cash Points
It is free to check your balance, receive a statement or withdraw cash from the cash point (ATM) at any branch of your own bank. However, if you wish to make use of any of these services at other bank’s cash points you should expect to pay a small fee. If your bank is part of a network of ATM’s, such as Euro 6000 or Servi-Red, you will be able to make free use of any of the cash points belonging to that group, so make sure you check for the appropriate symbol to avoid being charged. As always, it is wise to be cautious when withdrawing cash from ATM’s, and ensure that no one is watching, or following you once you have completed your transaction. If an ATM appears to have been tampered with then do not use it, and if your card is stuck inside during a transaction then contact your bank to cancel it immediately.

Internet Banking
Whether you are at home or away, internet banking will enable you to keep on top of your finances, manage your direct debits and make money transfers to other accounts should you wish, from the comfort of your home. You may not feel that you need it when you open your account, but circumstances can change so it is advisable to get the system up and running and collect your passwords from the outset, even if you just store them in a safe for the time being. If you are unsure of how to use internet banking then ask the bank clerk to go through each step of the process with you- even if you have to attend a separate appointment it will certainly be worth it and save you lots of time and effort once you have grasped the concept!

Managing Your Direct Debits
If you are a property owner in Spain you are likely to have several regular payments coming out of your account, such as water, electricity, telephone and internet, with direct debit being the easiest way to ensure that they are paid on time each month. This is particularly important if you do not live in Spain all of the time and are not on hand to arrange the payment if something should go wrong. The Spanish direct debit system operates in exactly the same way as in the UK, whereby you supply the company concerned with your bank details and they instruct the bank of the sum owing and when the payment should be transferred. If you have access to online banking it is always sensible to keep an eye on your direct debits, to ensure that no incorrect or unauthorized payments are leaving your account. Bear in mind that a time limit is applicable should you wish to retrieve an inaccurate payment, so the sooner you identify and act on it the better! If you wish to cancel a direct debit you should contact your branch directly and ask them to remove it from your list, or you may also be able to arrange this online, which is perhaps the best option as you can feel assured that it has been done.

Bank Charges
As mentioned previously, the “maintenance” charges applied to resident and non-resident accounts differ greatly, with residents paying between €15 and €25 per year and non- residents looking at charges of an average €160 per year. Additional charges will often apply for certain transactions such as overseas transfers, as well as charges for postal statements to be issued and use of your debit card, so it is best to get a list of these charges when you open your account. Bank charges can vary considerably between establishments, with special offers and concessions available according to your circumstances, so it is certainly worth shopping around to get the best deal before you sign up!