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Basic bank account for €3 per month

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Jim's Guide - Basic bank account for €3 per month

Don't get too excited by the title - there are strings attached to being eligible for such an account, and those strings mean that very few people will be able to benefit from it.

BACKGROUND

EU Directive 2014/92/EU introduced the requirement for EU member states to make basic bank accounts available to private individuals.

https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1585048611415&uri=CELEX:32014L0092

This was transposed into Spanish law by Real Decreto-ley 19/2017, but that just laid down the framework and didn't cover the detail.

https://www.boe.es/buscar/doc.php?id=BOE-A-2017-13644

Subsequent to the above, a ministerial order was issued by the minister of the Ministerio de Economía y Empresa - Orden ECE/228/2019 - and this does spell out the detail. Since its issue, there have not yet been any amendments.

https://www.boe.es/buscar/doc.php?id=BOE-A-2019-3113

EXTRACTS FROM THE LEGISLATION

I think it's easiest to describe eligibility for an account by just quoting directly from the legislation.

Discrimination:

EU - Consumers who are legally resident in the Union should not be discriminated against by reason of their nationality or place of residence

ES - it is necessary to guarantee the universal right of access to a basic payment account

Comment:

Banks can't refuse you because you aren't Spanish.

Residence:

EU - Credit institutions that offer payment accounts will be obliged to offer basic payment accounts to those potential clients who ... legally reside in the European Union

Comment:

After the end of the Brexit transition period, those who live in the UK will not be able to open such an account.

No extra charges:

EU - Member States shall ensure that access to a payment account with basic features is not made conditional on the purchase of additional services or of shares in the credit institution, unless the latter is conditional for all customers of the credit institution.

ES - Access to the basic payment account may not be subject to the acquisition of other services, or the acquisition of equity interests, or similar instruments, of the credit institution, unless it is imposed by the applicable regulations or unavoidable requirement for all the entity's customers.

Refusal to open an account:

EU - Consumers who are legally resident in the Union and who do not hold a payment account in a certain Member State should be in a position to open and use a payment account with basic features in that Member State.

EU - Member States should be able to permit credit institutions to refuse the opening of a payment account with basic features for consumers who already hold an active and at least equivalent payment account in the same Member State.

ES - Credit institutions will deny access to basic payment accounts when ... the potential client is already the holder in Spain of an account ... unless the latter has notified him of his unilateral decision to terminate that payment account ... In this case, before opening a basic payment account , the credit institution may verify whether or not the customer has an account in Spain.

Comment:

If you've already got an account in Spain, then you aren't entitled to open a basic account until you close the original account. Spanish legislation does not, however, exclude having an account in another EU country.

Account denied:

EU - in the event of refusal of such an application, the credit institutions inform the consumer of the specific reasons for the refusal

ES - The credit institution must inform the potential client of the refusal to open a basic payment account ...

The denial will be notified to the potential client in writing and free of charge, expressing the specific reasons on which it is based, without undue delay, and no later than a maximum period of ten business days from the date of receipt of the complete application.

Likewise, when notifying the rejection of the opening request, the entities will inform the potential client of the procedure that must be followed to file a claim against the denial and of their right to go to the claim procedure provided in article 30 of the Law 44/2002, of November 22, on Financial System Reform Measures, and its implementing regulations.

Comment:

You need to submit a written application for a basic account to ensure that the bank have to give details of a refusal in writing, plus details of how to appeal.

Justified account closure:

ES - Credit institutions may unilaterally terminate a basic payment account ... when ...:

The client does not legally reside in the European Union

That the client has subsequently opened another account in Spain

Features of an account:

EU - Consumers should be guaranteed access to a range of basic payment services. Services linked to payment accounts with basic features should include the facility to place funds and withdraw cash. Consumers should be able to undertake essential payment transactions such as receiving income or benefits, paying bills or taxes and purchasing goods and services, including via direct debit, credit transfer and the use of a payment card. Such services should allow the purchase of goods and services online and should give consumers the opportunity to initiate payment orders via the credit institution’s online facility, where available. However, a payment account with basic features should not be restricted to online usage as this would create an obstacle for consumers without internet access.

EU - Member States shall ensure that a payment account with basic features includes the following services:
services enabling all the operations required for the opening, operating and closing of a payment account;
services enabling funds to be placed in a payment account;
services enabling cash withdrawals within the Union from a payment account at the counter or at automated teller machines during or outside the credit institution’s opening hours;
execution of the following payment transactions within the Union:
direct debits;
payment transactions through a payment card, including online payments;
credit transfers, including standing orders, at, where available, terminals and counters and via the online facilities of the credit institution.

ES - 1. The basic payment accounts will allow the customer, at least, to execute an unlimited number of operations of the following services:
a) Opening, use and closure of account.
b) Deposit of funds.
c) Cash withdrawal at the entity's offices or at ATMs in the European Union.
d) The following payment operations in the European Union:
1. Direct debits.
2. Payment operations by debit or prepaid card, including online payments.
3. Transfers, including standing orders at the offices of the entity and through the online services of the credit institution when it has them.
2. Entities will provide these services to the extent that they already offer them to customers who have accounts other than basic payment accounts.
3. In any case, the client may manage and carry out payment operations in relation to the basic payment account at the branches of the credit institution where the account is open. You can also do it through the online banking services of the credit institution, when it has them.

Comment:

So far, it sounds very much like an ordinary current account.

Number of transactions:

EU - Member States should ensure, with respect to the services related to opening, operating and closing the payment account as well as placing funds and withdrawing cash and undertaking payment transactions with payment cards, with the exclusion of credit cards, that there are no limits to the number of operations which will be available to the consumer under the specific pricing rules laid down in this Directive.

ES - up to 120 annual payment operations in euros within the European Union consisting of payments made in execution of direct debits and transfers, including payments made in execution of permanent transfer orders, in the offices of the entity and through online services of the credit institution when it has them.

Comment:

There is a clear conflict here between EU and ES, but there's no point in an individual trying to get Spain to change the law.

Price - per Orden ECE/228/2019:

Article 4. Commissions or maximum expenses.

1. For the provision of all the services included in the basic payment account, the entity may not charge any commission, pass on costs or charge expenses to the customer, except as provided in this article.

2. The entity may charge the client a maximum, single and joint commission not exceeding 3 euros per month for the provision of the following services:

a) account opening, use and closure.

b) deposit of funds in cash in euros.

c) cash withdrawals in euros at the entity's offices or ATMs located in Spain or in other Member States of the European Union.

d) payment operations using a debit or prepaid card, including online payments in the European Union.

e) up to 120 annual payment operations in euros within the European Union consisting of payments made in execution of direct debits and transfers, including payments made in execution of permanent transfer orders, in the offices of the entity and through online services of the credit institution when it has them.

Comments:

I'm not happy with 2b, the Spanish wording for which is 'depósito de fondos en efectivo en euros'. The inclusion of 'en efectivo' could be taken as meaning that the account only allows cash deposits. I can understand this, because you're only allowed the basic account if you don't have another account - in Spain. Post-Brexit, when the UK is not in the EU, will you be able to do a transfer from a UK account? Having a non-EU account isn't catered for in any of the legislation, so I just don't know.

At first glance, 2e seems to put an annual limit on the number of transactions you can do, but read it again and the 120 limit doesn't apply to purchases and payments made using a debit card. Direct debit payments, and the few transfers we do, come to less than 50 transactions a year.

SUMMARY

All banks must now offer basic bank accounts to private individuals, with the monthly charge presently capped at €3.

You can't open such an account if you have another account in Spain.

This €3 is based on the following:

The bank cannot require you to subscribe to other of its products, like insurance.

Opening and/or closing the account.

Cash deposits.

Cash withdrawals at the bank or its ATMs.

Payments by debit card or online.

A maximum of 120 payments in a year, within the EU, in the execution of direct debits and transfers.

FINAL WORDS

As I said at the very beginning, it's unlikely that the account would be suitable or available to the majority of people.

If you do think it would suit you, and that you do qualify, then be prepared to refute whatever an uncooperative bank might say.

The principal objections I've heard of are the bank stating you have to be Spanish, which is incorrect - you just have to live here.

The other objection is that the account is only available to those on low income and is means tested. That again is incorrect - there is the €3 account available to anyone, and a separate free account for those on low incomes. This latter is subject of legislation different to that I have quoted in this guide, and I will at some point publish a guide about the free account.

Rather than incur the hassle of trying to open a basic bank account, I personally think it is better to open an ordinary account with a bank that does not charge any fees, such as the Cajamar Wefferent account.

 

Basic bank account for €3 per month

Jim's Guide - Basic bank account for €3 per month

Don't get too excited by the title - there are strings attached to being eligible for such an account, and those strings mean that very few people will be able to benefit from it.

BACKGROUND

EU Directive 2014/92/EU introduced the requirement for EU member states to make basic bank accounts available to private individuals.

https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1585048611415&uri=CELEX:32014L0092

This was transposed into Spanish law by Real Decreto-ley 19/2017, but that just laid down the framework and didn't cover the detail.

https://www.boe.es/buscar/doc.php?id=BOE-A-2017-13644

Subsequent to the above, a ministerial order was issued by the minister of the Ministerio de Economía y Empresa - Orden ECE/228/2019 - and this does spell out the detail. Since its issue, there have not yet been any amendments.

https://www.boe.es/buscar/doc.php?id=BOE-A-2019-3113

EXTRACTS FROM THE LEGISLATION

I think it's easiest to describe eligibility for an account by just quoting directly from the legislation.

Discrimination:

EU - Consumers who are legally resident in the Union should not be discriminated against by reason of their nationality or place of residence

ES - it is necessary to guarantee the universal right of access to a basic payment account

Comment:

Banks can't refuse you because you aren't Spanish.

Residence:

EU - Credit institutions that offer payment accounts will be obliged to offer basic payment accounts to those potential clients who ... legally reside in the European Union

Comment:

After the end of the Brexit transition period, those who live in the UK will not be able to open such an account.

No extra charges:

EU - Member States shall ensure that access to a payment account with basic features is not made conditional on the purchase of additional services or of shares in the credit institution, unless the latter is conditional for all customers of the credit institution.

ES - Access to the basic payment account may not be subject to the acquisition of other services, or the acquisition of equity interests, or similar instruments, of the credit institution, unless it is imposed by the applicable regulations or unavoidable requirement for all the entity's customers.

Refusal to open an account:

EU - Consumers who are legally resident in the Union and who do not hold a payment account in a certain Member State should be in a position to open and use a payment account with basic features in that Member State.

EU - Member States should be able to permit credit institutions to refuse the opening of a payment account with basic features for consumers who already hold an active and at least equivalent payment account in the same Member State.

ES - Credit institutions will deny access to basic payment accounts when ... the potential client is already the holder in Spain of an account ... unless the latter has notified him of his unilateral decision to terminate that payment account ... In this case, before opening a basic payment account , the credit institution may verify whether or not the customer has an account in Spain.

Comment:

If you've already got an account in Spain, then you aren't entitled to open a basic account until you close the original account. Spanish legislation does not, however, exclude having an account in another EU country.

Account denied:

EU - in the event of refusal of such an application, the credit institutions inform the consumer of the specific reasons for the refusal

ES - The credit institution must inform the potential client of the refusal to open a basic payment account ...

The denial will be notified to the potential client in writing and free of charge, expressing the specific reasons on which it is based, without undue delay, and no later than a maximum period of ten business days from the date of receipt of the complete application.

Likewise, when notifying the rejection of the opening request, the entities will inform the potential client of the procedure that must be followed to file a claim against the denial and of their right to go to the claim procedure provided in article 30 of the Law 44/2002, of November 22, on Financial System Reform Measures, and its implementing regulations.

Comment:

You need to submit a written application for a basic account to ensure that the bank have to give details of a refusal in writing, plus details of how to appeal.

Justified account closure:

ES - Credit institutions may unilaterally terminate a basic payment account ... when ...:

The client does not legally reside in the European Union

That the client has subsequently opened another account in Spain

Features of an account:

EU - Consumers should be guaranteed access to a range of basic payment services. Services linked to payment accounts with basic features should include the facility to place funds and withdraw cash. Consumers should be able to undertake essential payment transactions such as receiving income or benefits, paying bills or taxes and purchasing goods and services, including via direct debit, credit transfer and the use of a payment card. Such services should allow the purchase of goods and services online and should give consumers the opportunity to initiate payment orders via the credit institution’s online facility, where available. However, a payment account with basic features should not be restricted to online usage as this would create an obstacle for consumers without internet access.

EU - Member States shall ensure that a payment account with basic features includes the following services:
services enabling all the operations required for the opening, operating and closing of a payment account;
services enabling funds to be placed in a payment account;
services enabling cash withdrawals within the Union from a payment account at the counter or at automated teller machines during or outside the credit institution’s opening hours;
execution of the following payment transactions within the Union:
direct debits;
payment transactions through a payment card, including online payments;
credit transfers, including standing orders, at, where available, terminals and counters and via the online facilities of the credit institution.

ES - 1. The basic payment accounts will allow the customer, at least, to execute an unlimited number of operations of the following services:
a) Opening, use and closure of account.
b) Deposit of funds.
c) Cash withdrawal at the entity's offices or at ATMs in the European Union.
d) The following payment operations in the European Union:
1. Direct debits.
2. Payment operations by debit or prepaid card, including online payments.
3. Transfers, including standing orders at the offices of the entity and through the online services of the credit institution when it has them.
2. Entities will provide these services to the extent that they already offer them to customers who have accounts other than basic payment accounts.
3. In any case, the client may manage and carry out payment operations in relation to the basic payment account at the branches of the credit institution where the account is open. You can also do it through the online banking services of the credit institution, when it has them.

Comment:

So far, it sounds very much like an ordinary current account.

Number of transactions:

EU - Member States should ensure, with respect to the services related to opening, operating and closing the payment account as well as placing funds and withdrawing cash and undertaking payment transactions with payment cards, with the exclusion of credit cards, that there are no limits to the number of operations which will be available to the consumer under the specific pricing rules laid down in this Directive.

ES - up to 120 annual payment operations in euros within the European Union consisting of payments made in execution of direct debits and transfers, including payments made in execution of permanent transfer orders, in the offices of the entity and through online services of the credit institution when it has them.

Comment:

There is a clear conflict here between EU and ES, but there's no point in an individual trying to get Spain to change the law.

Price - per Orden ECE/228/2019:

Article 4. Commissions or maximum expenses.

1. For the provision of all the services included in the basic payment account, the entity may not charge any commission, pass on costs or charge expenses to the customer, except as provided in this article.

2. The entity may charge the client a maximum, single and joint commission not exceeding 3 euros per month for the provision of the following services:

a) account opening, use and closure.

b) deposit of funds in cash in euros.

c) cash withdrawals in euros at the entity's offices or ATMs located in Spain or in other Member States of the European Union.

d) payment operations using a debit or prepaid card, including online payments in the European Union.

e) up to 120 annual payment operations in euros within the European Union consisting of payments made in execution of direct debits and transfers, including payments made in execution of permanent transfer orders, in the offices of the entity and through online services of the credit institution when it has them.

Comments:

I'm not happy with 2b, the Spanish wording for which is 'depósito de fondos en efectivo en euros'. The inclusion of 'en efectivo' could be taken as meaning that the account only allows cash deposits. I can understand this, because you're only allowed the basic account if you don't have another account - in Spain. Post-Brexit, when the UK is not in the EU, will you be able to do a transfer from a UK account? Having a non-EU account isn't catered for in any of the legislation, so I just don't know.

At first glance, 2e seems to put an annual limit on the number of transactions you can do, but read it again and the 120 limit doesn't apply to purchases and payments made using a debit card. Direct debit payments, and the few transfers we do, come to less than 50 transactions a year.

SUMMARY

All banks must now offer basic bank accounts to private individuals, with the monthly charge presently capped at €3.

You can't open such an account if you have another account in Spain.

This €3 is based on the following:

The bank cannot require you to subscribe to other of its products, like insurance.

Opening and/or closing the account.

Cash deposits.

Cash withdrawals at the bank or its ATMs.

Payments by debit card or online.

A maximum of 120 payments in a year, within the EU, in the execution of direct debits and transfers.

FINAL WORDS

As I said at the very beginning, it's unlikely that the account would be suitable or available to the majority of people.

If you do think it would suit you, and that you do qualify, then be prepared to refute whatever an uncooperative bank might say.

The principal objections I've heard of are the bank stating you have to be Spanish, which is incorrect - you just have to live here.

The other objection is that the account is only available to those on low income and is means tested. That again is incorrect - there is the €3 account available to anyone, and a separate free account for those on low incomes. This latter is subject of legislation different to that I have quoted in this guide, and I will at some point publish a guide about the free account.

Rather than incur the hassle of trying to open a basic bank account, I personally think it is better to open an ordinary account with a bank that does not charge any fees, such as the Cajamar Wefferent account.

 

Disclaimer

While we try to ensure the guides are accurate and up to date, things change and mistakes happen, so please consider this when using the guides.

Jim, the author of the guides, is based on Costa Blanca, and so the articles are biased to that region, although in most cases they are the same or very similar for other areas.

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