Disclosure - By clicking the images or links in this article when applying for your Wise account it doesn't cost you, and you will be helping a local business (All Tech Plus) . I will earn a small commission after you make your first transfer with Wise.
Perhaps one of the most annoying things about living here in Spain is the carte blanche or maybe I should be saying carta blanca that Spanish banks have in charging their customers for very little in return. If UK banks can offer free bank accounts (they make their money in other ways) why can't they here? It seems to me that not only do they charge what they like, when they like, they also change the terms and conditions of your bank account without informing you.
Spanish banks: they charge what they like, when they like, they also change the terms and conditions of your bank account without informing you.
You, probably like me, have just learned to come to terms with this, however, given the need to pay in a set amount to my bank account each month to avoid additional charges, and the fact that business is bad (at the time of writing during the Corona virus (Covid 19) pandemic) I needed to transfer some of my savings from the UK to Spain - something that I haven't really had to do until now. I realise that banks charge for transfer and currency conversion, and know for a fact that Sabadell would also want a cut too, so I remembered Wise (formerly Transferwise!), a company I had looked into in the past. I duly hopped on my browser of choice, Google Chrome and looked them up. I was pleased that their fee for transfer was not only good value but also at the market rate as well, the same one you see when you type '1 pound in euros' into Google to see what the rate is, knowing full well that your bank would never give you that.
I also discovered at this time that I could open (for free) what Wise call a borderless account. With the borderless account I now have effectively 4 bank accounts - now whilst this might sound like overkill, bear with me whilst I explain. Those 4 account are a UK bank account (complete with sort code and account number, just like your usual UK bank account), a Euro account (complete with IBAN number), a US dollars account, and bizarrely a Polish Zlotys account. I also got a debit card which I can use to pay for things just as you can with any other debit card. The Euro account is based in Belgium but don't let that put you off. There aren't any real branches you can visit, and at present the only way you can credit any of your accounts is by transferring money in electronically - you can't pay cash in but for most people this shouldn't be much of an issue. You can however withdraw cash at cashpoint machines subject to a monthly limitation.
Get a UK bank account and a Euro account complete with the usual bank account sort code, account number and IBAN number you would usually expect for free.
I opened my account prior to Brexit, and had some clients at the time who operated out of the UK and preferred to pay me in Sterling - this was easy, because all I had to do was give them the account details for my Wise UK account and they were able to transfer their payments just as they would with any other UK based account. In my account online, I can see the balances of each of my 4 accounts. With Sterling in my UK account I can use my debit card to spend Sterling with UK suppliers if I wish, or I can simply convert it to Euros and move it either into my Wise EU account or, and as I still have it, to my Sabadell account. In the case of the latter, all Sabadell see are Euros arriving, and therefore there are no charges from Sabadell. This should work for those with pensions paid in Sterling - give your pension providers your Wise UK account number, and then convert it to Euros yourself in the same way I do, using Wise. There are fees to pay but I promise you, they'll be quite a lot less than you expect - and of course if you want to test drive it first, open the account anyway, pay something from your existing UK account (or get a friend to send you a tenner) into your Wise UK account and then use your account to convert it to Euros.
Ask your pension provider to pay into your UK account (Wise) instead of directly to your Spanish account. Login to your Wise account, transfer the UK balance either to your Spanish bank account converting to Euros with Wise, or move the balance to your Wise EU account and spend it with your debit card from there!
Spending with your Transferwise Debit Card
- Wise will post your debit card to you here in Spain. They make a nominal one off charge of around 5 euros for personal customers for the card, it is free for business customers.
- Previously in order to spend in a particular currency with your card you had to have balance available in that currency, now Wise have what they term Smart Conversion Technology - basically if you buy something for 100 euros and only have 90 euros in your Wise euro account, they'll debit that first then automatically convert from one of your other balances to euros to cover the rest. What's more they'll use the balance that has the lowest conversion fee. (I haven't tested this feature yet, since it used to be the case that you had to have enough balance so I used to convert it manually - I'll update this page once I've made use of this feature). UPDATE 09/03/21 - The Smart Conversion works very well - made a purchase in GBP today only having Euros in my account and the conversion was automatic without issue - I've detailed it in the examples table further on in the article.
- Have the app on your phone to manually move balances from one account to the other if you need to and of course perform other online banking transactions just like with any other bank account.
- Withdraw cash from cash point machines in the local currency up to a monthly limit. For euros it is €200. You can draw more but each transaction then has a fixed fee plus a percentage - I've not written that in here as it could change in future. Always choose the local currency when using ATMs. Always check to see if the ATM provider wants to charge you, some may! (I'm not sure if the Smart Conversion Technology will work with cashpoint transactions, I'll update when I know, I just haven't had need to withdraw cash to now)
- You can also setup direct debits in your Wise account.
- You can add payees (recipients) to your account of those who you might make regular payments to - I have my Sabadell account (me), and also another UK account.
Will I be able to ditch my Spanish bank account?
This is my ultimate aim. At present I am encouraging clients to pay for my products and services using debit or credit card wherever possible (I use SumUp for this, and I will be writing about my positive experiences with them soon in another article on my site) and SumUp process and send my payments onto my Wise account. Some clients also pay using bank transfer, and they are now using the IBAN number for my Wise Euro account. Whilst I still have my Sabadell account, I do of course have the ability to bank any cash payments I receive, and I also transfer from Wise Euro account to my Sabadell account for which a small fee is paid to Wise (some examples below).
My ultimate aim is to be free of my Spanish bank account and their unreasonable charges for doing nothing!
As I stated earlier, you can setup direct debits - I haven't done this yet - this is going to be my next thing to try. I currently pay my accountant, taxes, autonomo and IVA directly from my Sabadell account - I'm going to see if I can switch. It will be particularly interesting if the Spanish Hacienda will collect their payments from my Belgium based Euro account. If that's successful then it's goodbye Sabadell! I'll keep you posted here!
Some examples of Wise fees I have paid
Please remember that this will vary according to the exchange rate, these examples are just to give you some real transaction perspectives - sorry I don't have any larger ones to share with you :-( . Wise will also tell you the amount that you would likely have paid if you had made the same transaction just using your normal high street banks.
Important note - when you make a transfer, be aware that there is usually a choice of fees, the fee amount will depend on how quickly you want the funds to be available at the destination. I have always picked the lowest one just like in the real examples below.
|Wise Euro||Spain Euro||€ 400.35 -> € 400.00||0.35 c (rate: 1.0)|
|Wise Euro||Spain Euro||€ 231.66 -> € 231.38||0.28 c (rate: 1.0)|
|Any external bank account||One of your Wise accounts||Any amount||No fee to receive|
|Wise Sterling||Spain Euro||£ 171.01 -> € 196.48||£ 1.22 (rate: 1.11769)|
|Wise Sterling||Spain Euro||£ 148.33 -> € 168.62||0.76 p (rate: 1.14266) - saving £ 1.49|
|Wise Euro||Wise Sterling||€ 46.28 -> £ 41.25||0.19 c (rate: 0.895)|
|Wise Sterling <- Wise Euro||Wise Sterling (Smart Conversion)||£20.12 (€ 23.62)||0.10 c (rate 0.85545)|
Tip - if you don't need to convert your Sterling to Euros straight away, it is possible to set an alert on your Wise account to e-mail you if and when the exchange rate goes over a certain amount - get more euros for your money!
Click on the Wise images in this article to learn more or open an account with Wise, or click the button below - if you're not ready to signup just yet, click the button anyhow and bookmark their page, you can of course come back to this article. Once you've made your first transfers I'll earn a commission, I thankyou in advance for supporting a local business. I hope you've found the article useful, if you have please share and feel free to share with anyone else who may be interested. If you want to checkout more of my articles here's the link to get a list - [more articles by All Tech Plus]