Why you should be careful when having your salary paid into a Spanish bank account

Why you should be careful when having your salary paid into a Spanish bank account
Photo: Gabriel Buoys/AFP
The Bank of Spain has warned bank customers they should carefully read the conditions of any contract they sign up to when setting up their "nómina" salary payment as Spanish banks often include hidden but stiff penalties for early cancellation. 

To domiciliar la nómina refers to the act of setting up the direct payment of your monthly salary into a specific bank account, which effectively becomes your payroll account in Spain. 

Spanish banks actively seek existing or new customers to choose them with enticing offers, as nóminas are one of the safest ways of guaranteeing regular income for the bank. 

It’s a scenario which can prove advantageous for customers, offering them an easier way to open a new bank account or enjoy financial or savings products that were previously unavailable to them or at a cost. 

But the central bank of Spain – El Banco de España – on Sunday blew the whistle on the financial entities it watches over, warning customers they should review all the nómina contract conditions in detail, especially clauses relating to permanencia (the minimum amount of time you have to keep the account open if you want to avoid financial penalties). 

Spanish money website helpmycash.com states that  this minimum fidelity period varies between banks, going from 12 to 48 months, and there can be other conditions attached to this permanencia.  

The financial penalties are not made readily available online by Spain’s top banks but they usually depend on how early the account holder has closed the nómina account. 

According to the Bank of Spain, “you can close your account at any time without prior notice.

“There is no charge for closing an account if it was opened with indefinite duration or if it has been held for more than six months in the case of a fixed-duration account.

“If the terms and conditions include the payment of periodic account fees and charges, you will have to pay the proportional part accrued when you close the account.

“However, the bank will have to reimburse you for the proportional part of any fees paid in advance.

“When closing an account, the bank must inform you of any outstanding fees you need to pay, such as the account maintenance fees or transaction charges, to ensure that your account is not overdrawn.”

In their latest statement on its banking customer portal, the Bank of Spain advises customers to “check the rest of the conditions, such as possible commissions of the account, commissions for associated services (transfers), commissions for credit or debit card. 

“The fact that a bank offers you more than any other bank to set up your payroll does not mean that its offer is the best overall , it may be the cheapest but it doesn’t necessarily suit your needs best.”

Not all Spanish banks require customers with nómina accounts to keep them open for a minimum amount of time, with ING and Bankinter currently offering “sin permanencia” payroll accounts.  

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