You have been on holiday, fallen in love with the country and bought yourself a second home in the Algarve, that you are planning on using for vacations, renting out as an investment or to live in permanently. Now, if you have bought a local home, it is a very good idea for you to open a bank account with a local bank.
But what do you need to know and what are the steps that you will have to take to do just that? If you think it is going to be hard, after all you don’t know Portuguese, don’t fret, this article provides you some baseline information as well as a few guidelines.
The first thing that you need to do is to familiarize yourself with what steps needs to be taken to open a bank account, and how to keep that bank account from being closed.
Banking regulations in Portugal are the same for residents and non-residents although it may be different to the banking standards, policies and customs of your country of origin.
I know, that for myself, as a “Portuguese-South African”, it took a while to understand the Portuguese banking system, but the one aspect that I truly enjoy, is the fact that there is ample opportunity to develop a business relationship with the bank employees, and that they are quite willing to assist and provide invaluable information even if you are a foreigner and do not speak the lingo - if you only ask them!
As a foreigner, you may be motivated to continue to use your current bank and in keeping all of your money where it is currently. Although you are not prevented or even discouraged from doing so, it is nonetheless a very good idea to have a bank account with the local branch of a Portuguese bank. And the reason for that is that you have to pay for your future utility bills, tax bills and many other fees through an automated payment system through a Portuguese bank account.
The one nice feature of the Portuguese banking system is that it is possible to open a bank account in euros or in any other currency, and there are no restrictions on the amount of money flowing into and out of the country at this stage within the European Union.
But keep in mind that Portugal is a member of the euro-zone and all transactions are in euros.
There are alternatives to opening a local bank account to pay your local bills. You can appoint a nominee, either an attorney, an accountant, or a property management company who will pay your local bills on your behalf (after they received payment from you).
But, we are of the opinion that it is better for you to have a local bank account.
When you are ready to open up your Portuguese bank account, it is a good idea to do so in person. While you can do it from abroad, it is nonetheless frowned upon, as bank officials generally like to see you and meet you in person.
If you are unsure of which bank to choose, check our own directory of banks on this site, if they have been reviewed by us, read the reviews, or you could ask friends, family or local people that you know for references before you select a local financial institution.
You can open either a current account (conta corrente) or a deposit account (deposito a prazo). You start by filling a couple of forms. While every bank has their own requirements, in general you can expect to fill in an application form, client details form and an acceptance of the bank's rules and conditions document.
If you select a cheque account, take note that unlike many other countries, it is a criminal offence to bounce a cheque in Portugal. If you write a cheque on a Portuguese bank without having the funds in your account to cover it, not only will you be charged with fraud but also you will have to pay a 20 percent of the cheque value as a fine.
You also run the risk of being permanently blacklisted by the banks in Portugal and unable to open a new bank account in the future.
So, whatever you do, just make sure that you have always enough funds in your account to cover all your monthly transactions.
If you open your account in person, you will find out that the local bank’s personnel are quite willing to assist you and guide you through the process. If a bank employee is unable to assist you, get hold of the manager (gerente), you will find most of them quite accommodating.
In addition for ease of banking, ATMs, called Multibancos, are common throughout the country.
There is no doubt that Portuguese banks are quite modern and use the latest banking technology, such as internet banking, specialist accounts for paying taxes and pension top-up schemes, just enquire from your selected bank what products they can offer you to make your Portuguese banking experience a painless process.
Another very important thing to keep in mind is that unlike in many other countries, banks in Portugal operate only from Monday to Friday. They open at 8.30 am and close at 3 pm.
Note: This article was first published in I Support Lagos in November 2010. Updated August 2017. Author: Laurinda Seabra