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MONEY

Spanish bank accounts: Why you shouldn’t leave them inactive for too long

Not using a bank account you have in Spain can cost you dearly in the long run, with both the country's tax agency and your bank having the right to take all or some of your money. Here's what you need to know.

Spanish bank accounts: Why you shouldn't leave them inactive for too long
Photo: AFP

Bank transactions in Spain are monitored by the watchful eye of the country’s Agencia Tributaria, also known as Hacienda, especially when it comes to payments above €3,000, transfers of more than €10,000 and deposits of €500 banknotes. 

Banks in Spain are in fact legally obliged to inform Hacienda of any of these transactions, as well as credits and loans above €6,000, but tax authorities can also request permission from financial entities to investigate a specific account at any time.

The general consensus is that the State and Spain’s private banks maintain a close relationship with little banking secrecy, at least when it comes to the financial movements of ordinary account holders (94 percent of Spaniards have a bank account according to 2018 estimates).

Spain’s Tax Agency can take all the money from inactive bank accounts

Rather than just being able to monitor transactions, Spain’s Tax Agency can also check for account inactivity as banks provide them with this information as well.

Fortunately, they only have the right to empty inactive accounts after 20 years without use.

Although this may seem to exclude the vast majority of account holders, Hacienda still managed to fill public coffers with an extra €12.57 million from these inactive accounts in 2019, 13 percent more than the previous year (€150 million over the last 10 years).

It could be an account which an elderly relative has and completely forgotten about, an account of a person without descendants who can inherit the money or one which you opened when you lived in Spain years ago.

It’s worth noting that this also applies to any inactive banking product: investment funds, fixed income securities, economic rights etc

Don’t leave your Spanish account without any money in it

The Bank of Spain has warned account holders in the country that when cancelling an account “it isn’t enough to leave your balance at zero”, but rather that you have to contact the bank to give express written instructions to cancel the account.

Even if you want to keep the account open in case you choose to use it in the future, remember that most banks in Spain charge maintenance and other fees on a regular basis.

This means that you could be unknowingly overdrawn if you have very few funds, and a penalty fee which could mount up without your knowledge if you’re not receiving correspondence from your Spanish bank.

More banking fees after three years of inactivity

As a general rule, when three years have passed and a Spanish current account has not registered a single transaction, Spanish banks put these dormant accounts on a separate list, to which a different set of maintenance fees apply with respect to regular account users.

The standard practice is for them at the very least to charge the maximum maintenance fees published in the Bank of Spain: €36 euros per year.

There are many cases of parents opening accounts and depositing a small amount for their newborns, only to forget about the accounts all together and then find out that they are a couple hundred euros overdrawn.

READ MORE:

Don’t expect banks to get in touch

Even though the Bank of Spain considers it bad practice for private banks to not inform the holders of inactive accounts that they are being charged, it’s still something which happens regularly.

According to consumer.es, Spanish banks don’t tend to pressure the customer to pay the expenses derived from an account that has been abandoned, allowing debt to mount up.

There are also reports that some account holders are instructed to withdraw all funds from their accounts instead of officially closing them, under the premise that after 6 months these will be deemed cancelled accounts, which is not correct.

You should always update your contact details and address so that you can receive all the necessary correspondence from the bank.

That way you will have a better claim as you do have the right to report them for not informing you about the charges.

If your bank doesn’t offer you a satisfactory solution, you can contact the “Departamento de Conducta de Mercados y Reclamaciones del Banco de España” (The Bank of Spain’s Department of Conduct and Claims) on 900 54 54 54 or 913 38 88 30 (C/ Alcalá, 48, 28014 Madrid). 

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MONEY

When to turn on your heating in Spain this year and other cost-cutting tips

Despite being famed for its high temperatures and sunny weather, parts of Spain can get very cold during autumn and winter. With energy bills rising, here's our top tips to save on heating costs in Spain, whether you use gas or electricity.

When to turn on your heating in Spain this year and other cost-cutting tips

Despite some of the more stereotypical perceptions of life in the Iberian peninsula, Spain does have seasons.

In fact, depending where you are in the country, the autumn and winter months can get quite chilly at times. 

Cold temperatures can be common if you live in central or northern Spain, or have particularly cold and gloomy apartment, as they so often are in Spain. Unlike in colder countries in Northern Europe, houses and flats in Spain are built to keep the heat out, not in.

READ MORE: Why are Spanish homes so cold?

As a result, heating your home during the colder months can be quite important in Spain. But with energy bills soaring, many households in Spain will be worried about finding the balance between staying warm and saving money this winter.

According to data from Spain’s Instituto para la Diversificación y el Ahorro de Energía (IDAE) heating consumption makes up almost half (47 percent) of a household’s total energy consumption, and with the ongoing energy crisis hitting Spaniards hard, the government recently announced that it would cut the VAT on gas to 5 percent until the end of the year.

READ MORE: APPROVED: Spain reduces VAT on gas bills

Gas is the most popular heating system in Spain, with 36.8 percent using natural gas. Electric heating is the second most common, with 19.5 percent of Spaniards having it at home.

The Local has put together a list of top tips to save on your heating bill in Spain below, including some specific tips depending on whether you’ve got gas, electric, or even oil heating in your home.

When to turn your heating on

  1. Turn off the heating at night – Unless you’re in a particularly cold place, keeping the heating on overnight it is not necessary to keep the house warm. Using the heating for a couple of hours before going to bed and then turning off the radiators, therefore, can help you make big savings.

    According to the Spain’s Ministry for Ecological Transition, turning off the heating at night can save you between 10 percent and 20 percent on consumptions.

  2. Knowing when in the day to turn the heating on 

    You know not to turn the heating on at night unless absolutely necessary, but when during the day should you turn it on?

    GAS: Depending on your type of boiler and the size of your house, turning on (or pre-setting a timer) to turn on the gas heating half an hour to an hour before you wake up or get home is ideal because most gas boilers generally take between 15 and 60 minutes to heat up.

    Or alternatively, turn it on as soon as you arrive home and keep it on until you go to bed, unless you’re cooking or doing physical exercise that would make the heating unnecessary. 

    ELECTRICITY: Similarly to gas heating, it is recommended to only turn on your electric heating when you’re at home, or, if possible, pre-set it to turn an hour or so before you arrive home during the colder months as electric heating generally takes longer to heat up the house.

    The IDAE recommends maintaining the temperature between 19C and 21C for both types of heating.

  3. Every degree counts – It is a common myth that increasing or lowering the temperature of your heating makes no difference to your energy consumption and bill. Lowering the temperature by even one degree can offer energy savings of between 7 and 11 percent. According to a study by the University of Zaragoza, lowering the temperature to 16C makes a difference of 13 percent compared to a constant temperature of 20C was maintained. 
  4. Don’t crank up the thermostat to heat up the house quickly – Similarly, another misconception is that putting the heating to a higher temperature and blasting the house for a short period of time will heat it up quicker. This is not true – the only thing to go up will be the price of your bill.
  5. Different rooms, different temperatures – Think about which rooms you’re heating up, for how long and at what temperature, and how much you actually use it. The temperature in the living room, for example, despite your cosy winter blankets probably needs to be higher than they kitchen where there’s an oven or open flame.
  6. Flush your radiators – If you aren’t flushing your radiators in preparation for the winter months cold, you should be. Doing so allows your radiators to heat your house more efficiently, which means they expend less energy heating up, which means your bill will be lower.
  7. Turn off the radiators in rooms you don’t use – If there’s a room in the house you rarely use, consider turning off the radiators in there for good. Or if you know you’re only going to be using one room for a few hours (the living room when watching a film or football match, for example) then turn of the radiators in the other rooms.

    The same concept applies for when you’re going to be out the house for hours at a time. Leaving the heating on all day at a constant temperature will not save you more energy (and money) than turning it off.
    SPAIN-HEATING-SAVING

    A common misconception is that putting the heating to a higher temperature and blasting the house for a short period of time will heat it up quicker. (Photo by Ina FASSBENDER / AFP)

    READ MORE: Shared central heating in Spain’s buildings to end soon: what you need to know

  8. Replace the windows or seal them – Obviously this tip is much more budget dependent but if you’ve got the cash to replace your windows with more energy efficient glass, you can make big savings. Similarly, poorly sealed windows can lead to hot air escaping and a loss of energy efficiency. There’s no point paying for the heating if you’re just going to let it straight out the window.

    If you can’t afford to replace your windows, a cheaper option would be to put weatherstripping on the door and window frames to prevent airflow.

  9. Check the insulation: Continuing on the theme, according to the IDAE, between 25 and 30 percent of heating needs in a home are due to heat losses. Making sure your house or apartment is properly insulated is key to not wasting energy and limiting your energy bills. Whether it be full roof insulation, as is common in colder countries, or simply utilising heat preserving things like rugs and carpets in the colder months, insulating your home can be a big help with bills.

    The Spanish government offers subsidies for improving the energy efficiency of both bigger buildings and for family flats and homes, offering reduced rates. 

  10. GAS – Upgrade your boiler – Another pricer option but one sure to save your a lot of money on heating bills in the long run is upgrading your boiler. If you have an older boiler, it will almost certainly be inefficient, while a condensing boiler, for example, has 100 percent efficiency and will reduce consumption by around 35 percent.

    Even upgrading to a newer model standard boiler can improve your house’s energy efficiency and help you save on bills.

  11. GAS – Keep up with inspections – keeping up with your mandatory natural gas inspections, as well as checking your gas boiler occasionally, will keep it in good condition, maintain its safety, and avoid problems that could limit the efficiency of your energy consumption and cost you more money.

    In Spain there are mandatory inspections every five years, though in Basque Country it is every four years.

  12. ELECTRIC – Know on/off peak times – As you probably already know, electricity prices in Spain have, like many parts of the world, soared in the last couple of years. Knowing when the most expensive and cheapest times to use your electricity can be a big help hen trying to save on heating costs. This is especially true as heating your home with electricity is less efficient than with gas.

    In Spain, the electricity tariffs are broken down into hora punta (peak time), hora llana (flat time), and hora valle (off-peak). Naturally, if you use your electric heating during the peak time, you will pay more. 

    READ MORE: Inflation hack: what time should I use the washing machine in Spain?
    READ ALSO: Spain to cut electricity tax by half to ease inflation pain

  13. ELECTRIC – Find a cheaper tariff – In that vein, if you are really feeling the combination of rising electricity prices and colder temperatures in your wallet, consider moving to a cheaper provider with a more affordable tariff. Fortunately we already searched for the best rates, which can be found below.

    READ MORE: The cheapest rates Spain’s electricity companies don’t want you to know about

  14. OIL – Keep an eye on prices – Finally, for those with oil (gasoil in Spanish) heating as is common in more rural parts of Spain, keep in mind that fuel prices in general have increased hugely over the last year. It is important that you pay attention to the price of heating oil, which is different in each autonomous community, in order to buy it at the right time. For example, the winter season is when the price of heating oil tends to skyrocket, so you can stock up on this fuel for your boiler at a time of less cold.
  15. OIL – Efficiency – You can also add certain additives to your oil tank to make the burning more efficient. Not only does this mean you need less fuel to operate your boiler, but it will increase its shelf life and save you repair costs down the line.

READ MORE: REMINDER: How drivers in Spain can get 20 euro cents off every litre of fuel

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