Types of bank accounts in Spain

Most people open a current account or a savings account with their bank. A current account in Spain is much the same as that in any country and you'll be issued with a cheque book and ATM / debit card. Note that cheques are generally not accepted as a form of payment in shops and businesses. Debit and credit cards are. You will receive monthly statements regarding your account.

Some banks pay nominal rates of interest on current accounts, although by the time withholding tax at 25% has been deducted, you sometimes wonder why they bother.

Saving Accounts

Saving accounts are generally different from current accounts in that they offer interest, although interest rates paid at present are very low (only marginally higher than current account rates). With savings accounts you are issued with a cash book where all transactions are recorded. In some banks, you can use the cash book to withdraw money from cash machines. Savings accounts sometimes include the option of a debit card, but you can't have a cheque book.

Investment Accounts

Long-term savings accounts and investment accounts are also available, although these generally have restrictions on the amount you can withdraw or penalties for withdrawing funds before a fixed period of time. Interest rates vary, although at present no standard savings accounts in Spain offer a good rate of interest.

The best rates are obtained from investment account linked to stocks and shares, although there are associated risks of losing some or all of your investment.