Spain is renowned for its culture, climate, and cuisine, making it a top destination for tourists and expatriates alike. Whether you are already living in Spain or planning to relocate there for work, study, or retirement, you will often have to open a local bank account in Spain. In this article, we outline what you need to know about opening a bank account as an American in Spain. This includes what documents you need, types of Spanish banks, and the US reporting rules relating to having a bank account in Spain that you should be aware of.
Spanish currency and the need for a Spanish bank account
Spain, like most other European countries, uses the Euro (€) as its official currency. While you can withdraw Euros from US bank accounts at most ATMs, there are normally high fees and exchange rates when doing this, and most expats benefit from having a Spanish bank account. By having a local bank account, US expats in Spain can more easily receive their income, pay their local bills, and generally manage their Spanish finances more conveniently.
Furthermore, having a Spanish bank account lets expats benefit from various other banking services and products, such as credit, mortgages, and receiving funds from the US.
An Overview of Banking in Spain
Spain has a well-developed banking sector that offers the full range of financial services that Americans expect and need. Spanish banks fall into three categories.
- Several international banks (including US banks) have a significant presence in Spain. There can be advantages to opening an account at a bank in Spain when you already have an account at the same bank in the US already, such as ease of opening the account and interconnected international service. International banks in Spain include, Deutsche Bank, and HSBC.
- National banks have a presence throughout the country (and in some cases in other countries too). In bigger towns and cities, they may well have English speaking customer service representatives too. The main Spanish national banks are Santander, BBVA, and Caixabank.
- Regional banks are also known as cajas. They are often cooperatives or state owned, and offer a more limited range of services. They are more personal however, often with better customer service levels.
Spanish bank fees
Before choosing a bank in Spain, it’s important to compare the fees you’ll pay. Common fees include annual account maintenance and a debit card fee (typically a combined €30-50, ATM withdrawal fees if you use a non-Spanish, and foreign money transfer fees. While foreign money transfer fees may appear low, they are often combined with a relatively high currency exchange rate, making transferring money between Spain and the US bank to bank a relatively expensive way of transferring internationally. This is true both Spain to the US and the US to Spain. Instead, consider using a currency broker.
How to open a Spanish bank account
Opening a Spanish bank account in theory should be a straightforward process and similar to in the US. US expats typically need to provide identification such as a valid passport, proof of their address and residency in Spain, and a Spanish tax identification number (NIE). Some banks also require proof of income or employment. Research or contact the bank where you’re thinking about opening an account in advance to find out exactly what you need, then gather the documentation before scheduling an appointment. Once you’ve provided all the required documents, your account will normally be opened within a week.
US reporting of Spanish bank accounts (FBAR and FATCA)
US expats in Spain have reporting obligations to the US government relating to their foreign bank accounts. The most common one is known as the Report of Foreign Bank and Financial Accounts, or FBAR. Under the rule, Americans who have over $10,000 in total in foreign financial accounts, including all of their brokerage and bank accounts, at any time during a year have to report all their foreign accounts by filing an FBAR form to FinCEN. There’s no US tax liability relating to having foreign accounts, but there are steep penalties for not reporting them, so it’s something that you shouldn’t neglect.
Additionally, the US Foreign Account Tax Compliance Act (FATCA) law requires foreign financial institutions, including Spanish banks, to report information about US account holders to the US Internal Revenue Service (IRS). This means Uncle Sam can check FBAR filings. FATCA also requires expats with over $200,000 in foreign registered financial assets to report them on IRS Form 114 as well as on an FBAR. If you have any questions or need assistance meeting US reporting rules as an expat, seek advice from an expat tax professional.
Online Banks and currency transfer services
Many expats in Spain begin by opening an account at an online bank, as it is quicker and easier to do this and the fees are often lower if you just need a local checking account.
The most common online banks in Spain are, Revolut, N26, Tomorrow, and currency transfer service Wise.
However, if you require additional banking services such as credit or a mortgage, online banks won’t be able to provide these and you will have to open a traditional account.
Most American expats need to open a local bank account in Spain, and understanding the local banking options, what services are offered, the US reporting rules, and the process of opening a bank account in Spain in advance will allow you to make a smooth financial transition. Each bank has its own advantages and considerations, do your research, gather the necessary information, and make a decision that will set you on a path to financial success in this vibrant and captivating country.
If you have any questions about financial planning as an American living in Spain, get in touch.
This article is for informational purposes only; it is not intended to offer advice or guidance on legal, tax, or investment matters. Such advice can be given only with full understanding of a person’s specific situation.
