Spanish Banks and Banking
Banking in Spain is fragmented. There are about 150 different banks. They serve different markets having different functions. Clearing banks, savings banks, lending banks, cooperative banks and some foreign banks of French, German or British parentage compete with each other. These banks have many branches but naturally some of the smaller outlets do not offer a full range of services.
The Spanish banking system has some unusual procedures but it is efficient, usually staffed by friendly, hard working, multilingual people capable of offering a customer some of the most up to date services including telephone and internet banking. Credit or debit plastic cards are accepted for the purchase of consumer goods or for obtaining cash from an ATM (hole in the wall cash dispenser) of which there are many.
In selecting a Spanish bank it makes sense that some staff should speak English and have access to services such as mortgages and investments. It should be a main branch thus preventing delays in foreign transactions.
Bank accounts of residents and non-residents are distinguished separately with a non-resident account called cuenta extranjera and a cheque book (talonario) marked cuenta en euros de no residente . Different tax regulations apply but the banking operation for a nonresident account is exactly the same as for a resident account.
A current account (cuenta corriente) pays a low rate of interest - practically nothing (0.1%). A resident will have 15% of interest earnings withheld and paid to the Spanish tax authorities - less than practically nothing, and a non-resident should declare any liability to the tax authorities back home. Yet this account will incur some of the highest bank charges in Europe irrespective of the currency involved. Write a cheque and a charge occurs; transfer a payment and a charge occurs. With the exception of some free banking, charges occur every time a transaction takes place. Spanish banking is expensive!
Deposit accounts exist. They pay different rates of interest depending on the amount invested, the time period fixed in advance and the currency in which they are held. Again a resident will have 15% of the interest withheld by the bank to cover income tax. The bank gives a receipt which is deducted from income tax liability upon completing an annual tax return.
