The hidden costs of opening a Spanish bank account

In 2019 we asked our readers to tell us which bank accounts they thought were the best for foreigners in Spain and what new arrivals should watch out for when opening an account. 

Most respondents stressed that hidden costs are rife in the Spanish banking system and recommended that future account holders go through their contracts with a fine-tooth comb before signing on the dotted line.

In the first quarter of 2017, Spain's six biggest banks made more than €5 billion in hidden costs alone.

According to Guillermo Vicandi, co-founder of banking app BNEXT, “Spanish banks base their strategy on selling accounts that are apparently free of charges, but with lots of requirements.

“The first trick they play to get their hands on those extra costs is to include conditions that most people are unaware of or will not be able to meet, because they don't read the extremely small print”.

In 2020, with Spaniards’ attention turned to keeping their jobs during the coronavirus crisis, there is little to suggest the state of affairs in Spain’s banking system has changed.

On October 1st, Caixabank – which is due to merge with Bankia – will start charging its current account holders up to €240 a year in maintenance costs.

According to Spanish consumer watchdog Facua, the Bank of Spain doesn’t generally set a maximum limit of fees that financial institutions can charge, which gives them absolute freedom to lay out whatever charges they see fit.

And as you’re about to see, there are plenty.

 

Debit/credit card replacement fee (Comisión por duplicado de tarjeta)

If you lose your bank card or it stops working, you are likely to have to pay for a replacement.

Most banks in Spain include instructions online on how to cancel a card if your wallet has been stolen or you want to order a new card, but they don’t necessarily mention how much it will cost you to get a replacement.

BBVA for example charges €5, Abanca charges €3, but other banks may charge more depending on whether it’s a debit or credit card.

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Debit/Credit-Card Maintenance Fee (Comisión por mantenimiento de tarjeta)

That’s right, banks in Spain even charge you for having a bank card, even though it’s not clear what kind of ‘maintenance’ they’re actually providing.

Spain’s three biggest banks (Santander, BBVA y CaixaBank) charge an average of €20 to €40 a year for debit cards, whereas the maintenance costs for credit cards is around €20.

According to a study by HelpMyCash.com, Santander is the most expensive overall in this regard, charging its customers an average of €36 a year to own a debit card, although the latest news suggests CaixaBank is now on par with this.

Overdraft Fee (Comisión por descubierto)

This may seem like an obvious one that exists in other countries as well, but consider this: if you have a small amount of money in a Spanish account which you hardly use and aren’t paying much attention to, you could be charged hidden fees that end up putting you in the red.

The overdraft penalty is the percentage that is applied to the largest amount that the client has owed during a specific period of time.

The average fee is reportedly 4.35 percent according to HelpMyCash, although a recent study by consumer group Asufín suggests this rate is even higher now.

The table above shows the interest charged by different Spanish banks when it comes to overdrafts, the fees and fixed penalty charges, the total amount charged and the APR rate per bank. 

Most banks apply a minimum cost of €15 to €18, as well as factoring in interest rates and sometimes other fixed financial penalties.

You would’ve hoped that during Spain’s lockdown the banks would’ve given their struggling clients some breathing room. But unfortunately, this system has continued in place, with Bankia, Banco Santander and Liberbank charging the highest fees for overdrafts at over 10 percent.

Returned item fee (Cargo por suspensión de pago)

Similarly to being charged for being overdrawn, you could also be charged if you try to make a transaction that can’t go through due to insufficient funds in your account.

This is a hidden bank fee you’ll be charged if a payment is blocked, and is quite common in other countries other than Spain.

Fee for breach of contract (Comisión por incumplimiento de contrato)

Different Spanish banks use different names for this fee which applies to customers who do not meet the account requirements for it to be ‘technically’ commission-free.

There are also cases in which banks have changed the initial conditions which the account holder agreed to (which were often more beneficial) and then started charging them fees as a result of these sudden breaches they were unaware of.

For example, Santander applies a “liquidación de contrato” charge for account holders who fail to swap over to their newer accounts or don’t abide by the new conditions, sums which amount to around €60 every three months on average.

Make sure you stay on top of your emails from your Spanish bank and provide them with an up-to-date address so they can send you the latest in the post.

This could also apply to “cuentas sin nómina” (accounts which don’t require you to have your salary paid into them), as they usually entail instead that you put a certain amount of money in each month or make a number of withdrawals in order to meet their conditions.

Inactivity fee (Cargo por inactividad)

The Bank of Spain considers overdraft fees and other charges on dormant accounts is bad practice as the banks have not provided a real service that encourages the collection of any commission. That’s not to say they won’t try it on.

Punitive inactivity charges are generally a bit more common with credit cards.

If you’re not using the account at all the best thing to do is to close it for good. If you are being charged fees for an inactive account, contact either consumer group OCU or the Department of Market Conduct and Claims of the Bank of Spain.

Paper statement fee (Comisión por extracto bancario en papel)

If you hadn’t figured it out already, banks in Spain will charge you for practically everything.

Every bank statement sent in the post will cost account holders an average of 60 cents. So unless this is something that you explicitly want, cancel the service and use online banking instead (you can always print the statements for less than 60 cents).

Early closure fee (Comisión por cierre anticipado)

Are you put off by everything you’re reading and wondering if you should close that Spanish account you just opened? Well, some banks require you to keep the account open for a certain period of time, especially savings accounts. This may also apply to loans (préstamos) that you can pay ahead of schedule and cancel.

Fee for using another bank’s ATM (Comisión por el uso de cajeros automáticos)

This is one of the first hidden costs foreigners in Spain learn about: use your card at an ATM that doesn’t belong to your bank or the same bank group and you will get charged between €1 or €2.

The only silver lining is that according to a 2016 Spanish law, only the bank of the ATM being used can charge the customer, whereas previously the card user’s bank would also often try to get a cut.