Banks in Spain: Everything you need to know

Whether you are in Spain as a permanent resident, retiree, or digital nomad, at some point, you’ll need to open an account with one of the many banks in Spain. Not only does this keep your money safe, but it’s crucial for paying any taxes in the country.

In this article, we’ll explain how the Spanish banking system works, some of the biggest traditional and digital banks available, and what documentation you need to open an account.

How the Spanish banking system works

The banking system in Spain is an important and strong component of its economy. It is comprised of both domestic and international banks that provide a diverse array of financial services.

This system has undergone changes over time due to shifts in the country’s economy, regulatory modifications, and the global financial environment. However, if you are living in Spain, you must understand how the top banks operate.

Structure

The Spanish banking sector is made up of various institutions, including commercial banks, savings banks (known as “cajas de ahorros”), and cooperative banks. In recent decades, the sector has undergone significant consolidation, especially among the savings banks. Many of them merged or were absorbed by larger banks following the financial crisis that began in 2008.

The Banco de España (Bank of Spain) is the country’s central bank and a member of the Eurosystem. The Eurosystem makes up the central banks of the Eurozone countries and the European Central Bank (ECB).

The Bank of Spain plays a crucial role in implementing the ECB’s monetary policy within Spain, supervising the Spanish banking system, and maintaining financial stability.

Regulation in Spain

The banking system in Spain sees regulation by both national and European authorities. The Banco de España, the National Securities Market Commission (CNMV), and the Ministry of Economy and Business are the primary national regulators.

Because Spain is a member of the European Union, its banks are also subject to regulations and oversight from the European Central Bank. This is particularly true for the significant institutions that are directly supervised by the ECB’s Single Supervisory Mechanism (SSM).

Top 5 Banks in Spain

Spain is home to several big banks that have a significant presence both inside the country and internationally. Banco Santander and BBVA (Banco Bilbao Vizcaya Argentaria) are among the largest and are well-known globally, with extensive operations in Latin America, the United States, and other parts of the world.

CaixaBank and Bankia (which merged into CaixaBank in 2021) are also prominent players in Spain’s domestic banking landscape.

Banco Santander

Services and Features: Banco Santander is Spain’s largest bank and offers a comprehensive range of services, including retail banking, corporate and investment banking, asset management, and insurance. It is well-known for its global presence, particularly in Latin America and Europe.

Notable Features: Innovative digital banking services, international money transfer with PagoFX, extensive ATM network.

BBVA (Banco Bilbao Vizcaya Argentaria)

Services and Features: BBVA operates a wide range of financial services, including retail banking, wholesale banking, asset management, and private banking. It has a significant international footprint, with operations in several countries.

Notable Features: Strong focus on digital innovation and technology, mobile banking app recognized for user experience.

CaixaBank

Services and Features: After merging with Bankia, CaixaBank has become one of the largest banks in Spain, offering services like retail banking, insurance, asset management, and business banking.

Notable Features: Leader in mobile banking services in Spain, extensive branch network, offers social and charitable programs through La Caixa Foundation.

Banco Sabadell

Services and Features: Offers a broad spectrum of banking services including retail banking, commercial banking, corporate banking, and online banking. It has a strong presence in the SME sector.

Notable Features: Investment in digital banking and fintech, personalized banking services, international banking expertise.

Bankinter

Services and Features: Bankinter provides various banking products for individuals, businesses, and corporations, including retail banking, commercial banking, investment banking, and insurance.

Notable Features: Known for innovative banking solutions, strong focus on customer service, and extensive range of online banking services.

Digital Banking in Spain

Spain has one of the highest digital banking adoption rates in Europe. Spanish consumers are increasingly comfortable using online and mobile banking services for daily transactions, account management, and financial planning.

This is convenient if you are in Spain on the country’s Digital Nomad visa. It should be noted, however, that not all digital banks offer debit cards or allow you to send money internationally.

Popular Online Bank Accounts

Many of the biggest banks and fintechs in Spain offer online banking as an added service. A few notable examples are BBVA, Santander, and ING.

BBVA offers a fully digital banking experience with no fees for account management or maintenance. It offers mobile payments, international transfers, and investment products, in addition to personal finance tools. Similarly, Santander provides digital wallets, fast transfers, and personalized financial advice through its app.

As far as pure online banking goes, the most popular option among Spaniards is ING Direct. It offers a simple, straightforward banking experience with a focus on savings and investment products. It’s no-fee checking account and high-interest savings accounts have made it one of the biggest online banks in the country.

Benefits of Digital vs. Traditional Banking

Digital banking has a number of advantages over traditional banking, primarily centered around convenience and efficiency. It allows you to access banking services 24/7 from anywhere with internet access, eliminating the need to visit physical branches.

Digital banking platforms, including mobile apps and online portals, enable a wide range of transactions such as transfers, bill payments, and real-time account monitoring. They often come with enhanced features for budgeting, investment, and financial planning.

Digital banks can also offer lower fees and higher interest rates on savings due to reduced operational costs. However, traditional banking is still important for those who prefer personal interaction and services that require in-person meetings, such as complex transactions or negotiations.

How to Open a Bank Account in Spain

Requirements for Opening an Account

Opening a Spanish bank account is relatively easy. However, each bank might have slightly different requirements when it comes to documentation or residency status. Before heading to the counter to open an account, ensure that you have the following documentation ready:

Identification: A valid passport or national ID card for EU residents. Non-residents will need a passport and possibly additional identification documents.

Proof of Address: A recent utility bill, rental agreement, or any official document showing your current address. For non-residents, proof of address in their home country may be required.

NIE Number: For residents, a “Número de Identificación de Extranjero” (NIE) is essential. This is a tax identification number in Spain for foreigners.

Proof of Employment Status or Income: Documents such as a recent payslip, a tax return, or an employment contract may be required to show your financial status.

Application Form: A completed application form provided by the bank.

Additional Documentation: Depending on the bank, you may be asked for additional documents, such as proof of your economic activity or student status, especially for specific accounts or services.

Non-residents can open a non-resident bank account with similar requirements but will need to provide proof of their non-resident status, usually obtained from a police station or a consulate. While these are only general guidelines for the documents required, it is always best to check with the bank directly for what you need to provide.

Key takeaways from banking in Spain

The banking system in Spain is a complex and dynamic sector that has undergone significant changes over the years. It consists of a mix of traditional banking institutions and an increasing focus on innovation and digital banking services. The stability and evolution of the system continue to be influenced by both domestic and international economic factors.

However, the Spanish banking sector has faced numerous challenges, including those arising from the global financial crisis of 2008 and the European sovereign debt crisis. These challenges led to strict regulatory reforms, bailouts, and an emphasis on increasing the sector’s resilience.

The ongoing digital transformation presents both challenges and opportunities, with banks investing heavily in technology to improve efficiency, and customer service, and compete with fintech startups.

Frequently Asked Questions About Banking in Spain

What is the best bank to use in Spain?

Spanish banks offer similar services to each other, so it can be challenging to decide on the best bank overall. However, the best way to find out is to have a look at what the leading banks offer in terms of service and features.

Can a US citizen have a bank account in Spain?

Yes, a US citizen can open a bank account in Spain, both as a resident and a non-resident. However, the requirements for what you need to provide can vary from one leading bank to another. Generally, credit institutions require a valid passport and proof of NIE.

What are the major banks in Spain?

Spain is home to several large traditional banks, including Banco Santander and BBVA (Banco Bilbao Vizcaya Argentaria), which are well-known internationally. Some of the most popular online banks include ING Direct and N26.

What are the two types of banks in Spain?

In Spain, the two types of banks are traditional banks and digital banks. While most banks offer a debit card and savings accounts, a digital bank offers lower fees.

Which bank is best in Spain for foreigners?

Many of the largest Spanish banks offer a debit card for cash machines and direct debit functionality from your current accounts. This is important for foreigners, as the money must always be readily available.

Additionally, while low fees can be a deciding factor, the best bank for foreigners don’t require them to speak Spanish when asking about financial products. As with banks back home, it essentially comes down to what you need.