|
Private Banking
The number of banks has increased considerably over the last few
years. In Spain you will find the two mainstream forms of banking
- clearing banks and savings banks - as well as many well known
private banks.
Private Banks
Private banking, also known today as "wealth management" is well
established in southern Spain, especially in the Marbella area.
This form of banking can be useful to those who have 100,000 euros
or more to invest and seek management for. Generally, a private
banker will focus on helping you to pursue financial stability and
growth. Naturally, this will be done in the context of your personal
level of risk tolerance. In exchange, you can expect to be charged
fees based on the type of relationship you form. For example, if
you choose to limit the private banker's role to that of a pure
advisor, fees will inevitably be higher than those charged to clients
depositing money into the bank and using its services. A private
banker will probably emphasise the confidential nature of your relationship.
And you can expect this condition to be upheld at all costs in the
case of legitimate clients.
Savings & Clearing Banks
Banking has become highly automated and with regard electronic banking
they compare favourably with other European countries and their
ATMīs are among the worldīs best. In addition to clearing banks,
Spain has over 80 savings banks which were originally charitable
organisations granting loans for public interest and agricultural
policies. They comprise co-operative savings banks whose members
are agricultural co-operatives, although they play only a small
part in Spainīs banking system and hold just a few per cent of total
bank assets. Savings banks are similar to building societies in
Britain and savings and loans in the USA and hold over a third of
all deposits.
There are around 50 foreign banks and these are well represented
in Andalucia, although there are fewer and with an overall smaller
market share, than in most other European countries. The most prominent
British banks in Spain are Barclays, Solbank and Lloyds. These banks
are full members of the Spanish clearing and payment system and
can provide normal cheque accounts, cash and credit cards, and direct
debit/standing order services. Banks located in the major tourist
regions generally have at least one English speaking member of staff.
Opening Hours
Normal Bank opening hours in Spain are from 8.30 am or 9.00 am until
between 13.30 and 14.30, Monday to Friday and from 8.30 and 9.30
until 12.00 or 1300 on Saturdays in winter (banks are closed on
Saturdays from June to September or October).
Opening an Account
You can open a bank account whether you are a resident or non-resident.
It's best to open a Spanish bank account in person, rather than
by correspondence from abroad. You must be aged 18 and provide proof
of identity, such as a passport, your address in Spain and your
NIE. If you wish to open an account with a Spanish bank while you're
abroad, you must first obtain an application form, available from
foreign branches of Spanish banks or direct from Spanish banks in
Spain.
Although it's possible for non-residents to survive without a
Spanish bank account by using cash and credit cards, eurocheques
and traveller's cheques, this isn't wise and is an expensive option.
You will also need a bank account to pay utility and tax bills which
are best settled via direct debit.
Cheque Accounts
Checking accounts are provided by all Spanish banks however, overall,
cheques are not used as payment. All cheques, including post dated
cheques are payable on presentation and cheques are valid for six
months from their date. If you write a cheque without sufficient
funds in your account, your bank must pay out whatever is in your
account as part payment, although this isn't always done. It is
illegal to overdraw a bank account in Spain without prior agreement
and can led to many problems.
Savings Accounts
It's possible to open a savings account with all clearing and savings
banks in Spain. There are varying interest rates, minimum deposits
and withdrawal restrictions, depending on the type of account and
the bank. For short-term savings and small amounts, it's best to
open a savings account where funds are on call and withdrawals can
be made at any time. Interest is generally paid twice a year. However,
for residents, the interest earned on bank accounts and deposits
is subject to a 25% withholding tax at source on account of personal
income tax.
Cash & Debit Cards
All banks offer customers a combined cash and debit card which are
widely used and accepted throughout Spain. Purchases and cash withdrawals
are automatically debited from your cheque or savings account. You
don't receive a monthly statement and can't run up bills with a
cash or debit card. Cards allow holders to withdraw up to 300 € a day from automated teller machines or ATM's and obtain account
balances and mini-statements. There are three ATM networks - Telebanco
4B (indicated by a blue and yellow striped logo with the inscription
4B), Red 6000 and Servired. Cash can also be obtained from the ATM's
of other networks although there will be a small charge.
Loans
All Spanish banks provide loans and overdrafts and are quite happy
to do so to foreign residents, particularly if they are homeowners.
It pays to shop around for a loan as interest rates vary considerably
depending on the bank, the amount and the period of time.
Mortgages
Most banks will have a standard criteria before considering a mortgage
application. For example, you have to be 25 years or over, in full
time stable employment, or have been self-employed for a minimum
of three years. How much you can borrow will depend how much income
you receive and what financial commitments you have. In general,
you can borrow up to 70% of the purchase price of the property or
to a maximum of 2.5 times your gross annual income. .In order to
check that the price is appropriate and fair, the bank will request
a professional evaluation. This comprises a detailed report in respect
to the quality of construction and material use, the situation,
state of repair, etc. of the property and, most important of all,
its market price which takes all the above into account.
The fee for the evaluation is approximately 270 € but obviously
varies according to the size of the property. A search must also
be made in the Land Register and a certificate issued for the corresponding
entry to check on the possible existence of mortgages or loans.
If the home you are buying is still under construction, the builder
may require the cost of the property to be paid in a series of payments.
Most lenders can provide a mortgage that matches these requirements
subject to certain safeguards.
Financial institutions will offer you a choice
of repayment plans which usually include: Endowment Mortgage - whereby
every month or quarter you make two separate payments, one for the
interest on the loan, the other for the premium on the endowment
policy. Capital Repayment Mortgage - whereby you make either monthly
or quarterly payments of interest and capital on the mortgage. During
the early years, each monthly payment comprises mainly of interest.
In later years, more of the capital is paid off. You will generally
be given a period of up to 20 years to repay your mortgage and it
is your responsibility to ensure that you have a suitable mortgage
protection policy to repay the loan if you die before the end of
the mortgage term. In general, you can expect to pay approximately
10% of the property purchase price in associated taxes and fees.
top of page
|
