Spanish Currency - Top Tips for Moving Money Abroad

Spain is part of the European Union and the Eurozone; as such it replaced Spanish pesetas with the Euro (symbol: €) in the year 2002. Do not expect anybody to accept other types of currency, or to be willing to exchange currency. Although Spain’s official currency is now the Euro, many Spanish people, particularly those in the older age group, still “think” in Pesetas. You will find in some supermarkets that prices are shown in both pesetas and Euros, although payment is always made in Euros. In some more rural parts of Spain, prices of Spanish property for sale may be shown in many millions of pesetas – which can be very confusing for overseas buyers!

If you wish to exchange money, you can do so at any bank (some may require that you have an account there before they will exchange your money), where you can also cash in your traveller's cheques. Currency exchanges, once a common sight, have all but disappeared since the introduction of the Euro.

Spanish bank charges are notoriously high and a large part of some banks' profit margins are made thanks to the charges paid by clients for just about every banking transaction imaginable.

If you plan to make a lot of bank transfers every year, you should carefully consider how much this is going to cost you.

You could be tempted to think that since there are British banks that operate in Spain, you can just make your money transfers from the UK to the Spanish branch of the same bank and pay no charges at all, but unfortunately that’s not possible. These banks are British by name but are totally separate from their British parents. To name but a few there are Barclays, the Royal Bank of Scotland (affiliated to the Santander bank) and Solbank, owned by Banco Sabadell, Halifax and Abbey.

If you plan to keep most of your money outside Spain and to make transfers periodically to your Spanish account, you should enquire about the facilities a bank offers for this (e.g. once the money arrives in your account, how long is it before you can use it) and what their charges are. Keep in mind that most banks will charge you a commission for receiving the money transfer into your account.

In addition, your UK bank will also charge you for the international money transfer. Usually there is a minimum fee of around 15-30 pounds sterling per transfer. Additionally, they will typically charge a commission of 0.4% of the total amount to transfer over the standard currency rates. These numbers can vary from bank to bank but they are good approximations of what you can expect to pay. The fact is that unless you have a huge account balance, they know you need their help to move your money abroad and they take advantage of this situation in terms of extra charges and fees.

Financially savvy people prefer to leave overseas money transfer requirements up to their foreign currency brokers. These specialists operate on behalf of hundreds of clients and get much better conditions in the currency wholesale markets, just like financial brokers do for investors who invest their savings on collective investment funds to get a better return.

There are a number of registered agencies providing foreign currency services in the UK as well as in other non-Eurozone countries. They can offer you cheaper exchange rates than banks and charge smaller transfer fees. In fact, since they make their money from the buy/sell rate margins, if you move more than a certain amount of money (typically a few thousands) they won’t charge you at all.