Banks are barely out of the headlines across Europe at the moment, thanks to the lingering debt crisis in the Eurozone, but what is it like to be a customer with a bank in a Euro country, such as Portugal?
Article written by The Overseas Guides Company
If you’re on the verge of buying a property in Portugal or relocating there, you’ll need to open a local bank account, so to help prepare you this week Ben Taylor, an expat in the Algarve and author of the PortugalBuyingGuide.com, talks about his own experience of banking.
If you’ve only experienced UK banks, banking in Portugal might deliver a few surprises. Unless you’re in a big city, you’re likely to find banking a far more personal experience in Portugal. For example, in Tavira where I live I know my bank manager by name and have his direct phone number. If something significant happens on my account, like when I recently transferred a large sum to pay a tax bill, my manager notices and calls me. This can could seem truly bizarre to anyone used to the depersonalized banking experience in modernday Britain.
But such a service doesn’t necessarily come for free. Free personal banking, like that in the UK, is actually quite unusual. In Portugal, you will probably pay a monthly account fee of €5 or more and should expect fees for things like issuing cheques and debit cards. Whether the extra service makes the fees seem fair will come down to personal opinion.
When it comes to choosing a bank, it’s good to ask other expats or check Web forums for recommendations. Although you may notice some familiar names (including Barclays and Santander), don’t assume that there will be any linkage between their UK and Portuguese operations. Outside of rural areas, you will generally find that bank employees speak good English regardless of your choice of bank.
Banking in Portugal can seem highly sophisticated and slightly primitive all at once. For example, the multibanco ATM system is one of the most advanced in the world and can be used for everything from withdrawing money to paying household bills and buying train tickets, phone top-ups and fishing permits. Meanwhile, Portugal seems to have no formal credit referencing system, with loan and credit
decisions often still “sent up to Lisbon”.
Many Portuguese current accounts are combined with savings accounts. If you have one of these accounts, you may initially be disconcerted when the bank automatically moves money into your savings once you reach a certain balance. The money automatically moves in the other direction, however, should you need it, for example to pay a large bill via the cash machine.
Getting any kind of credit, loan or overdraft is difficult in Portugal, and not helped by the current economic climate. It can be even harder for expats, especially those whose financial affairs are not fully visible in Portugal. To get credit from a Portuguese bank, you’re likely to need to show tax returns, residency and various other miscellaneous pieces of paper that they will decide at the time (seemingly at random!). As such, it’s best to assume that credit is a “no go,” at least until you are firmly established in the country. Once you are, however, don’t be surprised if the bank manager calls you personally to offer you a credit card!
With all this in mind, many expats hold on to UK accounts and sometimes credit cards once they move. Although there have been anecdotal reports of some banks refusing to maintain accounts for people living overseas, most are happy to do so when accounts are in good standing.
Keeping accounts like this is a recommended strategy, as it can be very hard to open new accounts when first arriving back in the UK. However, an English account and debit card should never be seen as an alternative to a Portuguese account. The multibanco system alone makes a proper Portuguese debit card an essential for anyone living in the country.
For details of property for sale in Portugal, visit the Portuguese listings on Rightmove Overseas. One way to save money when buying property in Portugal or living there is to use a currency specialist when transferring your pounds into euros. For more information on this, visit the Currency Zone.
To understand the full step-by-step process to buying a property in Portugal, collect The Overseas Guides Company’s ‘Portugal Property Buying Guide’
The views and comments herein are those of the author and do not necessarily reflect the views or opinions of Rightmove Overseas, Rightmove Group Ltd or Rightmove Plc