Banking in Portugal: the best banks for expats and how to open a bank account

Currency. Portugal is a member of the European Union and the eurozone. Since 1999, the country’s national currency has been the euro (€).

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Euro is the default currency for banking accounts and transactions in Portugal. In addition, it’s possible to open foreign currency accounts in:

• dollars: American (USD), Canadian (CAD), Australian (AUD), New Zealand (NZD), Hong Kong (HKD), and Singapore (SGD);

• pound sterlings (GBP);

• Swiss francs (CHF);

• South Africa rands (ZAR);

• Japanese yens (JPY);

• Polish zlotys (PNL);

• Krones: Norwegian (NOK), Danish (DKK), and Swedish (SEK);

• and other currencies.

Banking regulators. Two regulators control the operation of the Portuguese banking system: the Bank of Portugal and the European Central Bank.

Security. Portugal follows several protocols to ensure the safety of banking transactions. Namely, the banking system is subject to the EU Regulation 2016/679 of 27 April 2016 and the Law 58/2019 of 8 August 2019.

Under the applicable rules, Portuguese banks use data protection systems and report any failures. They also ensure the confidentiality of provided services.

A low rate of card fraud is one of the signs of good banking security. The number of fraud activities per transaction in Portugal is 0,009%. It is one of the lowest rates in the European Union.

Bank types. More than 150 financial institutions operate in the country, including public and private retail banks and cooperative, investment and mobile banks. Branches of international banks operate in the country as well.

Business hours. Most Portuguese banks are open from 8:30 AM to 3:00 PM, from Monday to Friday. Bank offices are closed on Saturdays, but you can make payments or withdraw cash at ATMs.

Bank holidays in Portugal. Portuguese banks follow the calendar of public holidays. There are 13 holidays during the year:

1. January 1st — New Year’s Day.

2. The Good Friday — a Friday before Easter Sunday. In 2022, the Good Friday fell on April 15th.

3. Easter Sunday: in 2022, it fell on April 17th.

4. April 25th — Freedom Day.

5. May 1st — the Labour Day.

6. June 10th — the Portugal National Day.

7. Corpus Christi — a movable holiday which is celebrated 60 days after Easter. In 2022, it fell on June 16th.

8. August 15th — the Assumption of Mary.

9. October 5th — Republic Day.

10. November 1st — All Saints’ Day.

11. December 1st — the Restoration of Independence Day.

12. December 8th — Immaculate Conception Day.

13. December 25th — Christmas Day.

Banco de Portugal, or the Bank of Portugal, is the country’s central bank. It was established in 1846. The headquarters is in Lisbon; branches operate in Porto, Madeira and the Azores.

The Bank of Portugal is a member of the European System of Central Banks. Therefore, the Portuguese banking system operates according to the unified EU rules.

The central bank controls the activities of banks and other financial organisations, such as insurance companies, investment funds, credit brokers, and pension funds.

Caixa Geral de Depositos (CGD) is the only Portuguese public bank established in 1876.

CGD branches operate in 23 countries, including the EU states, the UK, Brazil, Mexico, Canada, India, and China. 543 branches operate in Portugal.

The CGD provides services to individuals and businesses: deposits, corporate and consumer loans, mortgages, car loans, and life and property insurance.

Millennium BCP is one of the five largest banks in Portugal. The headquarters is in Porto. There are 458 branches across Portugal; some more are located in Poland, Macau, Mozambique and Angola.

In addition to loans and deposits for legal entities, Millennium BCP provides factoring services, online banking, and issues guarantees. For example, the Millennium app allows users to make payments from the company’s current account and exchange documents and information with the bank without leaving an office.

Companies that sell goods and provide services with deferred payments may assign receivables to the bank. Millennium BCP’s minimum factoring rate is 5,7%.

Portuguese citizens and foreigners can use the services of Millennium BCP: open a deposit, take out insurance, buy securities or get a loan.

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Novobanco is a private bank that includes 358 branches located from Lisbon to Madeira and the Azores. The Global Finance magazine named the bank the best in Portugal in brokerage services and trust securities management.

Banco Santander Totta is also on the list of the 5 largest banks in Portugal. The bank has received the Euromoney Awards for Excellence, designed for the world’s best credit organisation by the Euromoney magazine.

According to Global Finance, the bank was included in the most reliable European institutions list. The rating participants were evaluated according to five criteria: financial stability and security, risk management, range and quality of banking services, knowledge of customers, and staff.

The Santander Totta headquarters is in Lisbon, and 368 branches operate throughout Portugal. The bank provides financial services to individuals and companies.

Banco Português de Investimento (BPI) is an investment bank headquartered in Porto. BPI won the national Cinco Estrelas Award for "brand trust" and "banking" based on a consumer survey.

The bank provides a full range of financial services for the country’s citizens and residents and Portuguese companies: loans, deposits, overdrafts, life and property insurance, and brokerage services.

The financing of Portuguese farmers and agro-industrial companies is a priority for BPI. For these purposes, the bank opened a credit line of 95 million euros in total. Companies from other industries can also get a bank loan of up to 5 million euros.

Several large foreign banks operate in Portugal, such as the German Deutsche Bank and N26, the French Oney Bank and BNP Paribas, the US Citibank, and the Spanish Bankinter and Wizink banks.

International banks provide financial services to companies and residents of Portugal.

You can apply for a credit or debit card online or at Portuguese bank branches. As a rule, banks do not charge a commission for issuing and servicing debit cards. Credit card service fees vary from €0 to 50 per year.

The average rate for credit cards is 11—13%. For example, at Banco Santander Totta, the credit card rate is 13,1% per annum.

Portuguese banks issue two types of cards: regular and contactless. You can pay utility bills and shop in online stores with mobile banking apps.

The limit for purchases with a bank card without a PIN code is €50.

Cash is one of Portugal’s most popular payment methods, as banking cards are not accepted everywhere. You can withdraw money at local ATMs. There are about 11,000 ATMs across the country.

The limit on cash transactions in Portugal is €3,000.

Multibanco ATM payments. Portuguese banks are connected to the national Multibanco payment system. It unites ATMs, payment terminals and online banking services into a single network.

More than 90 different transactions are available through the Multibanco system. For example, people pay monthly bills and taxes, make social security contributions, transfer money between accounts, top-up mobile phones, and buy tickets. Multibanco ATMs accept all major bank cards, such as Visa and Mastercard.

There might be a limit: €200 per transaction or €400 per day. A commission usually amounts to 2—3% of the transaction sum if you use a foreign bank card. Some international banks, such as Deutsche Bank, are members of the Global ATM Alliance, so they don’t charge any commissions and fees on ATM transactions.

Online and contactless payments are made with:

• banking apps,

• mobile payment apps like Apple Pay or Google Pay,

• digital wallets like PayPal.

Direct debits are usually made to pay bills. You can set up regular direct debits and cancel them at any time. But before revoking, you must inform the company of the payments you were charged.

If a payer wasn’t informed of the charged debit amount and it’s unreasonably big, the payer can claim a refund. The claim must be submitted within 8 weeks from the payment date.

Payments by check are not widely common in Portugal anymore. Banks don’t issue cheque books automatically; they must be ordered separately.

It is a criminal offence to issue checks without funds to cover them. The issuer is charged with fraud and pays a fine of 20% of the bounced checksum. The violation might also entail blacklisting by the Bank of Portugal.

During the pandemic, many European banks introduced negative deposit rates. Depositors had to pay the bankers extra with their savings. For example, in the German Volksbank, the rate on deposits over €100,000 was ‑0.5%. Portuguese banks do not use negative rates, but some banks do not charge interest on deposits.

The minimum deposit amount is €125. All deposits are insured. If a bank has financial problems, the client is guaranteed to receive €100,000.

A bank deposit can be opened in euros or US dollars. However, the yield is higher for foreign currency deposits. For example, BPI does not charge interest on euro deposits. But if you deposit at least $250 for three years, the bank will charge interest of 0,9% per annum.

Portuguese banks open deposits even to non-residents. However, a foreigner has to come to Portugal and personally apply to the bank.

Portugal residency can be obtained in several months, for example, through a Golden, D7 or D8 visa. Portugal residence permit holders open bank accounts in the country, relocate to Portugal and travel Europe visa-free, staying up to 90 days out of 180 in EU countries.

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Consumer loans. The country’s citizens and residents can get loans for personal needs or buy a car in Portugal. Loan interest rates at Portuguese banks are lower than the average in the European Union. For example, in 2021, the average loan rate in the EU was 4,2%, while in Portugal, it was 3,9%.

The most common reason to get a loan is to buy a car. If the vehicle is used, the loan interest is higher. The loan interest rate for new cars is 5%, and it’s up to 11,8% for used cars. For example, Santander Totta bank issues money for a new car purchase at 5,75% per annum and for used vehicles — at 9,4%.

The main limitation is that you can sell the car before the end of the loan agreement only with the bank’s consent.

The interest rate on consumer loans depends on the amount and terms of the loan agreement. Online loans are more expensive. The main advantages of such loans are that you do not need to go to the bank, and applications are considered in a couple of hours. The money is credited to the client’s account immediately after the application approval.

Mortgage. Both citizens and non-residents can get a mortgage to purchase housing in Portugal.

The average mortgage rate is 3,3% in Portugal. Mortgage rates are of two types: floating and fixed. Floating is pegged to the European EURIBOR interbank rate.

Suppose a borrower is approved for a loan at 2% plus EURIBOR for 12 months. On the payment date, EURIBOR is 0,058%. Loan payments will be calculated at the rate of 2,058%. The amount of monthly payments changes depending on how the EURIBOR rate has changed.

EURIBOR has been negative since 2017. Therefore, some banks equate the rate to zero. For example, at Banco Santander Totta, you can get a mortgage at 1,9% plus EURIBOR for six months. If desired, the borrower concludes a mortgage agreement for 10 years at a fixed rate of 1.6 to 2,5% per annum.

An applicant confirms their income to get a loan to purchase new or resale housing. The down payment for Portuguese residents ranges from 10 to 30%; for non-residents — from 20 to 50% of the property value.

For example, Novobanco offers mortgages to non-residents. The bank finances up to 80% of the property value. The mortgage is provided only for the purchase of a resale property. The mortgage term is 2 to 30 years.

The maximum mortgage term is 40 years. The main limitation is that the borrower must be less than 75 years old at the end of the loan agreement. Portuguese citizens and foreigners over 18 can get a mortgage loan.

It is unnecessary to come to Portugal to purchase a villa or apartment. A mortgage agreement with a bank can be concluded through a trustee.

If a non-resident acquired a property with a mortgage, such a property could be rented out.

The real estate investment will pay off as Portugal’s housing boom continues. According to the Idealista website, property prices have increased by 8,4% in Portugal over the past year. The maximum growth is registered in Madeira — by 17,4%, Lisbon — by 10,1%, and Algarve — by 7,9%.

The average property prices per 1 m² in Portuguese regions, from highest to lowest:

• €3,252 in Lisbon;

• €2,527 in the Algarve;

• €1,914 in North Region;

• €1,872 in Madeira;

• €1,168 in Central Region;

• €1,088 in Alentejo;

• €1,044 in the Azores.