Tips on moving money to and from Spain
Spain is part of the European Union and the Eurozone and replaced Spanish pesetas with the Euro (€) in the year 2002. Do not expect anybody to accept other types of currency, or to be willing to exchange currency.
Although Spain’s official currency is now the Euro, many Spanish people, particularly those in the older age group, still ‘think’ in Pesetas. You will find in some supermarkets that prices are shown in both pesetas and Euros, although payment is always made in Euros.
Currency exchange fees & commisions
If you wish to exchange money, you can do so at any bank (some may require that you have an account there before they will exchange your money), where you can also cash traveller’s cheques. Currency exchanges in pesetas, once a common sight, have all but disappeared since the introduction of the Euro.
Spanish bank charges are notoriously high and a large part of many banks profit margins are made thanks to the charges paid by clients for just about every banking transaction imaginable. It’s no wonder that many are still so uncompetitive when they are so keen to hang on to charges like these.
If you plan to make a lot of bank transfers every year, you should carefully consider how much this is going to cost you.
You could be tempted to think that since there are so many British banks that operate in Spain, you can just make your Currency exchange and money transfers to Spain and pay no charges at all, but unfortunately, that’s not the case. These banks are British by name but are totally separate from their British parents.
To name but a few there are Barclays, the Royal Bank of Scotland and Solbank, owned by Banco Sabadell.
If you plan to keep most of your money outside Spain and to make transfers periodically to your Spanish bank account, you should enquire about the facilities a bank offers for this (e.g. once the money arrives in your account, how long is it before you can use it) and also what their charges are. Keep in mind that most banks will charge you a commission for receiving the money transfer into your account.
In addition, your UK bank will also charge you for the international money transfer. Usually, there is a minimum fee of around 15-30 pounds sterling per transfer. Additionally, they will typically charge a commission of 0.4% of the total amount to transfer over the standard currency rates. These numbers can vary from bank to bank but they are good approximations of what you can expect to pay. The fact is that unless you have a huge account balance, they know you need their help to move your money abroad and they take advantage of this situation in terms of extra charges and fees.
Specialist currency exchange companies
Financially savvy people prefer to leave overseas money transfer requirements up to their currency exchange specialist. These specialists operate on behalf of hundreds of clients and get much better rates and conditions in the currency wholesale markets, just like financial brokers do for investors who invest their savings in collective investment funds to get a better rate of return.
There are a number of registered agencies providing foreign currency services in the UK as well as in other non-Eurozone countries. They can offer you cheaper exchange rates than banks and charge smaller transfer fees.
In fact, since they make their money from the buy/sell rate margins, if you move more than a certain amount of money (typically a few thousands) there may not be any charge at all.
More from Living in Spain
Is Sky the only option available for English TV in Spain? There are other options for your English TV Free to Air …