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

Brits living in Spain have a new bank to weigh up as Monzo launches here, with free accounts and a 4 per cent savings pot. Whether it could replace your current one is another matter, with some small print to check first.

Monzo has opened accounts to the public in Spain

Monzo, the British app-only bank used by around 16 million people in the UK, started opening accounts to the public in Spain on Wednesday October 28. Until now, access has been limited to people on a waiting list that opened in May. 

There are five types of accounts: personal, joint, children’s (for ages six to 17), business and a basic account, all run through one app and described by Monzo as free. It also says its personal accounts carry no foreign exchange charges, with purchases abroad converted at the Mastercard rate. 

Joint accounts need both holders to have a Monzo account, while the children’s version needs a parent or guardian with their own. The business account is for autónomos and limited companies, which could matter to self-employed Brits, and Monzo says it already has one million business customers in the UK. Its Spanish site is also available in English.

The bank has opened offices in Barcelona and Madrid and had hired more than 50 staff by May. Its Spain boss, former Western Union and N26 executive Francisco Sierra, called the launch “a huge milestone for Monzo” and said the bank has “big ambitions here”. 

It’s entering a busy market, up against Revolut, N26 and Santander’s online bank Openbank. Monzo’s own research claims close to 60 per cent of Spaniards have been caught out by unexpected bank fees, which helps explain its pitch of free accounts.

Why the British bank is arriving through Ireland

Monzo’s British banking licence doesn’t cover the EU after Brexit, so the company claimed a European one through Ireland in December 2025. It launched there in April this year, which makes Spain its second EU market. 

In Spain, customers are served by Monzo Bank Europe DAC, a branch registered with the Banco de España. That matters for your money as deposits are protected by Ireland’s guarantee scheme up to €100,000 per customer, and not by the UK scheme that backs Monzo’s British accounts.

That isn’t unusual, though. Revolut’s Spanish accounts are currently covered by Lithuania’s scheme up to the same €100,000, and the cover could move to France if the company shifts its Spanish customers to its new French bank. 

Can British residents open an account?

Monzo’s launch announcement doesn’t mention foreigners at all, so the answer has to come from the small print. Its Spanish site says the basic account is for people who live in Spain, are 18 or over and don’t already have a payment account here, unless one is about to close. That would suggest that anyone living in Spain could open an account. 

Monzo’s help page then spells out what ID counts. Spaniards need a DNI (national identity card), other EU nationals can use their own ID card or passport, and nationals of non-EU countries can use a TIE (foreigner identity card) or passport. That would appear to cover Brits living here legally, although British residents aren’t explicitly named. 

To move up to a full personal account, the same page says you must declare Spanish tax residence and provide a NIF (Spanish tax number), which foreign residents normally have in the form of their NIE (foreigner identity number).

Anyone who owns a home in Spain but lives in the UK looks to be out of luck for now, as the accounts are only described for people living in the country and using it as their main residence.

The 4 per cent savings pot is the main attraction

Monzo’s savings pot pays 4 per cent a year (TAE, the Spanish equivalent of AER) for 12 months on the first €5,000, as long as it’s opened before Thursday December 31. After that, the rate drops to 2.50 per cent on balances of up to €100,000. Interest is paid monthly, and the pot needs a Monzo current account alongside it, which pays nothing. 

Savings interest is taxable in Spain, with 19 per cent withheld at source. One Spanish finance site worked out that €5,000 would earn about €196.50 before tax, which is roughly €159 after it. The standard rate is also variable, although Monzo has to give at least a month’s notice before cutting it.

What’s still unclear before you switch

Monzo’s website says the accounts come with a Spanish bank account number (IBAN) and work with Bizum, the mobile payment app that’s now spreading into Spanish shops. However, a launch-day review on Finect said the Spanish IBAN is still planned for this autumn and that wages can’t yet be paid in. The same review and others also report limits on free cash withdrawals, so it’s worth checking the fees document in the app. Finect also notes that the contract can be cancelled within 14 days of opening.

Nor is it clear whether a Spanish Monzo account can be linked to a British one, as the help pages don’t say.

So if you’re thinking of switching, open the app to see what Monzo asks of you, and keep your current bank open until your wages, bills and Bizum payments are definitely working.