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ECONOMY

How rural Spain is rebelling against rampant bank closures

Life in many parts of 'empty Spain' is becoming increasingly challenging as a result of the closure of hundreds of bank branches, making it impossible for many to withdraw cash. But rural communities are fighting back.

How rural Spain is rebelling against rampant bank closures
In rural Spain people are protesting bank closures. Photo: Cesar Manso/AFP

Over the past year, all of Spain’s biggest banks have closed hundreds of branches, laying off thousands of staff in the process.

This decision has hit residents in rural areas of the country particularly hard, who now find it increasingly difficult to access their savings in cash.

In fact, The Bank of Spain warned that almost three percent of the Spanish population, around 1.3 million people, find it difficult to get their hands on legal tender.

This rings particularly true in rural areas in the Spanish regions of Castilla y León, Galicia, Aragón and Andalusia, where people, especially the older population, are finding it difficult to access their pensions and deal with online banking systems.

This problem, among others, is pushing people out of rural areas in Spain, making the depopulation in these areas even worse.

Fighting back

In Galicia, the announcement of new office closures has led to a wave of protests across the most affected municipalities. Abanca has recently closed several of its offices in the region, affecting some 10,000 residents.

These disgruntled account holders will now join the 50,000 other Galicians from 45 different municipalities that, according to the Galician Institute of Statistics, did not have branches or ATMs in their municipalities at the beginning of the year. The majority of these are located in and around Ourense and A Coruña.  

Abanca’s decision to close its branches is “unprecedented aggression against rural areas” which also targets the elderly, Carlos Costa, mayor of the Pontevedra town of Campo Lameiro argues.

Abanca justified their closures by saying that they are reorganising and that they plan to have “larger offices with more staff and a greater degree of specialisation”.

In 2008, before the merger of the savings banks, Galicia had 2,534 branches. Now there are only half left. President of the Galicia region Alberto Núñez Feijóo blames the central government for not passing a law that prevents these closures.

Photo: Jorge Guerrero/AFP

It’s in the region of Castilla y León however where the rural communities are most affected by the shortage of banks and ATMs. Here, protests by residents and city councils against depopulation and closures are increasingly common. Zamora and Ávila are the two provinces that have the fewest banks. 

Large banks continue to close branches in Extremadura as well. The Bank of Spain’s report for the first quarter of the year stated that four BBVA branches and seven Santander branches have disappeared since the beginning of the year.

Unicaja, which has just completed the absorption of Liberbank, has closed an office in the Extremaduran province of Cáceres. This equates to twelve bank branches closures in just three months.

Teruel Existe, a political group based in the province of Teruel in Aragón, has also been fighting the closures of financial offices in their province and has demanded a greater presence of branches in underpopulated areas.

In April 2021 two of Spain’s biggest banks announced thousands of layoffs. 8,300 jobs were axed at CaixaBank and 3,800 at its smaller rival BBVA, accounting for 16 percent of the workforce.

Last year Banco Santander, Spain’s largest bank also laid off 1,800 staff members. 

Potential solutions

In early 2021, the Salamanca Provincial Council created a system that incorporated ATMs into the library buses.

Valladolid has also invested in five public ATMs that will be installed in centres where they had been withdrawn years ago.

Banco Santander came up with its own potential solution when it sealed an agreement with Correos so that its customers can use the 4,675 post office service points from the first quarter of this year for free if the financial institution does not have a physical presence in the municipality.

The Bank of Spain has also proposed that money could be withdrawn from lottery booths or tobacco shops. The practice of asking for’ cash back’ in supermarkets and other convenience stores in the UK and Ireland has been commonplace for years.   

This practice was put into operation in 2016 by the ING bank in Spain when it signed agreements with Dia supermarkets and the Galp and Shell gas stations so that through its Twyp Cash app, you can withdraw between €20 and €150 in about 3,500 establishments.

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BANKING

The best bank accounts for self-employed workers in Spain

Whether it be financial advisors, savings incentives, or the flexibility to do things like paying taxes and arranging payrolls, finding the right bank account can really help your self-employed working life in Spain.

The best bank accounts for self-employed workers in Spain

Being self-employed (autónomo in Spanish) can seem a little tough in Spain at times. Whether it be the endless admin, high social security charges or tax brackets, sometimes it can feel as though freelance or small business life just isn’t meant to be in Spain.

One thing that can make life a little easier is having a bank account designed especially for the self-employed.

READ ALSO: CALENDAR: The key deadlines for self-employed workers in Spain in 2024

What is a self-employed account?

A self-employed account is basically a bank account designed for self-employed people that you can open in your own name to handle all your professional money matters.

Many self-employed people find this beneficial because you can keep personal money separate from business income, and generally keep a clearer, more balanced set of accounts — something that comes in handy when making a tax return in Spain.

Another benefit is that many self-employed accounts allow you to use banking services that you would not have access to via your normal current account, such as doing payrolls, if you have staff, or access to financing and loans that regular banking customers can’t get. Many also offer cash back on paying social security fees. Also, often when opening a self-employed or business account, banks offer you a personal adviser to help you with your financial decision.

So, which are some of the best bank accounts for self-employed workers in Spain?

Sabadell Self-Employed Account – Cuenta Autónomos Sabadell

Sabadell’s Self-Employed account offers an account for the self-employed zero commission charges and zero conditions. You receive a free business debit and credit card, with no maintenance fees.

Aside from immediate transfers, all other transfers are free within the EU.

You also get a return of 3 percent of your direct debit electricity and gas bills paid via the account, something handy for self-employed people with offices.

Bankinter Professional Account – Cuenta Profesional

Bankinter’s Professional Account gives you remuneration of up to 5 percent APR in the first year and up to 2 percent APR in the second (maximum balance of €5,000).

It is a commission-free online account (via web and mobile app) with which you can separate your personal and professional expenses, and you will have a personal manager at your disposal to help you resolve all your doubts and needs.

You also receive a free credit card, free national and intra-EU transfers, can make free cash withdrawals over 17,000 cash points, advance deposits, and get multi-channel access to your account.

However, there are some conditions. You must deposit a minimum of €800 per month in the account (cash deposits not be valid), keep the card active, and make at least three charges per receipt per quarter.

READ ALSO: The social security fees Spain’s self-employed will pay in 2024 

Payhawk Enterprise – Payhawk Empresas

Payhawk accounts are a little different and go beyond the traditional definition of a business account. Unlike conventional accounts, Payhawk provides an entire banking ecosystem designed to optimise financial control and simplify the management of business budgets and expenses.

This account might appeal more to self-employed and small business owners with a significant staff or turnover, rather than to individual freelance workers.

The Payhawk Business account has automated expense management, offers Visa corporate cards (physical and virtual) that have usage limits and integrated spending policies.

The Payhawk platform also automates accounting, enables budget creation and frees you up from laborious administrative tasks, and the mobile app allows you to approve funding requests and make payments from anywhere.

READ ALSO: The financial aid available to Spain’s self-employed workers in 2024 

Revolut Pro Account

The Revolut Pro Account offers 0.8 percent cashback on card payments, create professional invoices, receive payments with QR codes, and spend and send money abroad with great exchange rates

This account may be better suited to individual self-employed workers in Spain.

Revolut Pro offers various banking plans with extra features:

Standard: Free
Plus: €2.99/month
Premium: €7.99/month
Metal: €13,99/month.

N26 Business Account

The N26 Business Account appeals to the self-employed by offering a 5 percent refund of the monthly autónomo social security charge to those who pay their self-employed fee with the N26 account (up to a maximum total of €180 per year).

The N26 Business Account is 100 percent online, free, and focused on the self-employed. It offers a free Mastercard debit card, which gives you 0.5 percent back on your purchases, allows free transfers to Spain and the Eurozone, and does international transfers through Transferwise.

You can make free withdrawals at any ATM a maximum of 5 times a month, and N26 offers a 24/7 customer service.

CaixaBank Business Account – Cuenta Negocios

Caixa’s Business Account gives you a specialised bank manager who will accompany and advise you throughout the life cycle of your business. If you don’t have a website but you want to make online sales through social networks or WhatsApp, Caixa’s SocialCommerce tool allows you to do all that and manage your online business.

If you do have a website, Caixa uses Cyberpac or Addon Payments to accept payments in your online shop in a simple and secure way. Similarly, if you want to further invest in or expand your business, you can finance your fees and receipts to expand or renovate your business and take it to the next level.

The account also has no fees or commissions. However, you’ll need to meet 3 requirements in order to pay no fees on the account:

Direct debit income of at least €750 a month or €9,000 a year.

Set up a direct debit for your self-employed social security payment.

Make any of the following payments from the Caixa Business account: your taxes, employee social security contributions, employee pay slips, utility bills or card purchases.

There is a maintenance fee of €15 per month if you don’t meet the requirements.

Santander ONE Business Account – Cuenta Santander ONE Empresas (autónomos)

For new customers, Santander’s ONE Business Account offers no account maintenance fees for the first 12 months

Neither are their issue or maintenance fees for Santander debit and credit cards, or for making transfers in Euros via online banking, mobile and ATMs, except for urgent transfers. No fee for debit cash deposits and withdrawals at more than 30,000 Santander ATMs worldwide either.

You have to meet some requirements to pay no commissions:

Deposit or invoice at least €1,800 every three months by means of POS, transfers, bills, or cheque deposit.

Make one of the following operations: payment of employee salaries, payment of the self-employed quota, or make 6 uses of the account card.

The maintenance fee if you do not meet the account requirements is €30 per month.

BBVA – Business Welcome account – Cuenta Negocios Bienvenida

BBVA’s Business Welcome account allows you to transfer your direct debits from other banks free of charge, and you’ll be given a specialist bank manager whenever you need one.

If you pay your taxes and/or social security contributions directly into the Welcome Business Account, BBVA offers you 3 percent of what you pay back – up to €100 gross per quarter, meaning you could earn back €400 per year. This offer is only for new self-employed customers.

On top of that, there are no fees on conditions during the first year with BBVA’s Business Welcome account. From the second year onwards, you have to meet the following conditions each month:

You must set up a direct debit to pay your social security or professional association fee through the Business Account, and you must also pay your taxes (IVA, IRPF, business tax or corporation tax) by direct debit.

There is a maintenance fee of €12 per month if you do not meet the account requirements after the first year.

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