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Why banks in Spain are obliged by law to offer a low-cost basic account

Low-cost basic accounts may not be widely advertised in Spain, but they are available and your bank must, by law, offer you one if you want.

Published: 17 January 2023 17:11 CET
Updated: 29 February 2024 11:20 CET

Why banks in Spain are obliged by law to offer a low-cost basic account

Why banks have to offer you a low-cost basic account. Photo: LLUIS GENE / AFP

According to EU law, banks must offer a “basic account” for essential operations such as depositing and withdrawing money, making transfers and receiving salaries.

The EU created this “basic account” with the aim of avoiding financial exclusion and providing everyone residing in the bloc with a current account, even if they hardly earn any money or don’t have a fixed address.

READ ALSO: What’s the maximum amount you should have in a current bank account in Spain?

What are these basic accounts?

They allow you to carry out up to 120 operations per year and have a debit card, paying only a commission of €3 per month or €36 per year to use it.

The Bank of Spain along with consumer associations are encouraging banks in Spain to make these types of accounts more well-known to their customers.

READ ALSO: What to be aware of before opening a shared bank account in Spain

Who are these basic accounts for?

The accounts are ideal for those who have minimal incomes, as well as those who are not comfortable with technology such as using computers, tablets or smartphones as they don’t require you to use any apps or carry out any extra operations online.

They are also good for vulnerable consumers, due to the fact that banks must agree to give you the account free of charge for two years, extendable two by two, provided you demonstrate that you continue to be so.

You will be considered vulnerable if:

You are not part of a family unit and you do not earn more than twice the amount of the IPREM. For 2024, this will be €14,400 per year.
Or, if you are part of a family unit of fewer than four members and you earn less than 2.5 times the IPREM – no more than €18,000 in 2024.
And if none of the members of the family own property, except for the main residence, or own a company.

Can banks refuse to give me a basic account?

Not really, no. Banks are obliged by law to be able to provide these low-cost accounts and can’t refuse you unless they find out that you are using it to launder money or threaten national security.

READ ALSO: The Spanish bank accounts you can open with just a NIE number

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How would the BBVA takeover of Sabadell affect customers in Spain?

Following news that Spain’s second-largest bank BBVA is attempting a hostile takeover bid for smaller rival Banco Sabadell, many customers may be wondering what impact this could have on them if the takeover goes through.

The Spanish government has since vowed to block the move, but BBVA’s new bid came three days after Sabadell’s board of directors rejected a merger proposal, saying it was “not in the best interest” of the bank.

READ ALSO: Spain’s Banco Sabadell rejects BBVA merger offer

The takeover proposal values Sabadell, Spain’s fourth-largest banking group in terms of capitalisation, at nearly €11.5 billion ($12.3 billion).

Though the situation is still developing and Economy Minister Carlos Cuerpo has warned the government “will have the last word when it comes to authorising the operation”, there are a few things that would likely happen in the case that this takeover goes through.

Here’s how it could potentially affect millions of BBVA and Sabadell customers.

What if I have a mortgage with one of the banks?

In case of a takeover or merger, mortgages or loans would not be affected. This is because mortgages are essentially contracts with defined terms and conditions, so they could not be modified unilaterally by a bank after a takeover.

The requirements for interest rates on loans would also stay the same. However, the conditions of linked products (insurance premiums, for example) could theoretically be changed if they aren’t outlined in the contract.

What will happen to my bank card and account number?

After mergers and takeovers, as a general rule, the resulting banks tend to standardise the terms and conditions of their products, as well as their fees. This means that your card or account could gain (or lose) some fees, such as those for issuing a new card or maintaining the account.

This is not usually an immediate process, but be aware that banks can change the terms and conditions of accounts and cards following a merger or takeover.

It is likely your conditions will initially remain the same without much change, but the new/resulting bank may change the conditions later down the road.

However, banks are always obliged to inform customers months in advance of any changes so you can decide whether to accept the conditions or to change bank.

In practice, it is most likely that customers of the absorbed bank, in this case Sabadell, will see their IBAN code changed, although this is a procedure that shouldn’t really change much as it is the bank itself that does it. You’d just need to update your payment details where necessary.

What about investment funds and pensions?

In the case of investment products such as pensions, customers are likely to be forced to transfer their funds into the products marketed by the new bank, as not all banks market the same investment funds and pension plans on offer.

As such, doing this may oblige customers to assume the fees of the other bank.

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