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MONEY MATTERS
Spain, unlike many other European Countries does not operate a credit economy, most Spaniards pr efer to pay and be paid in cash, however in the larger towns and cities credit and debit cards are widely accepted, if you are unsure check with the establishment first. If you are on holiday travellers cheques are widely accepted and offer a good level of security
SPANISH BANKING
Spanish banks operate in the same way any other bank operates with cheque accounts and deposit accounts. Banking is not free in Spain with almost all transactions attracting a commission fee, these range from a fixed fee to a percentage charged against the transaction figure. Almost all your domestic bills will be paid by direct debit from your bank account, this is the easiest and most effective way to pay your utility bills.
If you are a resident, 18% of your interest earnings will be deducted and paid directly to the Spanish tax office in your name, this is the same for Spaniards. You may be eligible for a refund on this tax. If you are a non-resident, no tax will be withheld, but you will be liable for tax in your country of residence.
If you are receiving your pension or investments paid directly to your Spanish bank account, in order to reduce the commission your bank is charging on your pension cheques, make sure that you are receiving them by direct transfer in euros.
Most foreigners hold two bank accounts, one in their home country and a Spanish bank account, this avoids the pitfalls of currency exchange rates, especially if your investments are paid in a currency other than euros.
Banks will lend to residents and non-residents alike, arranging a mortgage to buy a property should be straight forward as long as you qualify for the loan.
INVESTING MONEY
Investing your money in a Spanish bank deposit account operates on the basis that the interest rate you are given depends on how much you invest and the duration of the fixed period.
CHEQUES
Personal cheques are not as widely used in Spain as they are in the rest of Europe, when you write a personal cheque out to someone in Spain, you will find it quite common for the person to ask for the cheque to be made out to “portador” this is in fact cash, it means the person can present the cheque at the bank and effectively cash the cheque over the counter instantly. Many Spaniards will refuse a cheque made out to them personally.
Another peculiarity in Spain with cheques is the fact that if the issuer does not have the funds to pay the cheque in full, the bank will take what funds are in the account and pay this to the cheque holder, the holder can represent the cheque later for the balance of the value.
In Spain a post-dated cheque is actually presentable from the minute it was issued whether the date is 2 months ahead.
INVESTING MONEY
Your cheque account will probably be paying you 0.1% on your current balance, if you want to Invest your money, you should enquire about the banks deposit account, this operates on the basis that the interest rate you are given depends on how much you invest and the duration of the fixed period the longer you lock your finances into the bank the more favourable the rate will be.
BANK TRANSFERS
If you are transferring money from a bank outside Spain to your Spanish bank account it is adviseable to convert the funds at the source bank into euros before you transfer, Spanish banks charge commission if they have to convert the funds at their end.
Generally bank transfers can take up to 5 days to appear in your Spanish bank account, make sure you take this into consideration when arranging transfers.
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