Brits in Spain get a new banking option as Monzo launches with free accounts

Brits living in Spain now have another free banking option to consider with the launch of Monzo in the country. The British app-only bank, which already serves 16 million people in the UK, began offering accounts to the public in Spain on October 28. Monzo plans to enter a competitive market, joining the likes of Revolut, N26, and Santander’s online bank Openbank.

The bank has five account types, all accessible through its app: personal, joint, children’s, business, and a basic account. The personal accounts come with no foreign exchange charges, and purchases abroad are converted at the Mastercard rate. Monzo’s business account could be of interest to self-employed Brits. The bank has opened offices in Barcelona and Madrid and has hired over 50 staff by May.

Spain's banking regulator, Banco de España, oversees Monzo's operations, ensuring deposits are protected by Ireland’s guarantee scheme up to €100,000 per customer. Monzo’s savings account offers a 4% annual interest rate on the first €5,000 for the first 12 months, after which the rate drops to 2.5% on balances up to €100,000. However, the interest is taxable in Spain at a standard rate of 19%, with the remaining amount withheld at source.