In order for an expat to open a bank account in Iceland, they must have a locally issued ID number (kennitala). This can be applied for at the National Registry offices. Expats will also need to have their passports available to show the bank and proof of address. This can mean either a utility bill or a copy of a tenancy agreement. It is important to have a bank account in Iceland as salaries are paid directly into accounts, although it is possible to maintain your existing bank account in your home country. However, having monies transferred in and out of a foreign bank account can prove to be costly and this is best avoided.

Most banks will require a deposit when the account is first opened. This amount will vary depending upon the bank you have chosen and the type of account you have. Deposits for savings accounts are generally higher than those for current accounts and some accounts may require a minimum balance being maintained for the duration of the account’s life. This will also vary from bank to bank, but could be the equivalent of a few hundred US dollars.

Current account holders will be issued with a cheque book and a debit card, and may be able to apply for credit facilities such as an overdraft or a credit card. However, if you have only just arrived in the country it is unlikely that these will be granted as you will have very little credit history. However, this will depend a great deal on your personal circumstances, so if you need credit facilities it is worth making an appointment with your bank manager to discuss your options.

There are charges applied if you write a cheque without having the correct funds in the account or an agreed overdraft facility. Continually bouncing cheques can lead to the account being blocked or frozen so it is a good idea to build a relationship with your bank so that they may be more accommodating if you should need help. Decisions such as overdrafts can often be at the manager’s discretion.

Funds can be accessed 24 hours a day at one of the many ATMs that can be found in all towns and cities and most banks can offer both current and savings accounts to expats, as well as making arrangements for pensions for those who are working in the country. Online banking facilities are now common with most banks and these can prove to be useful for those who do not have a branch close by.

Deposits and withdrawals can be made at any branch of your bank and most will allow you to pay bills over the counter at any branch. Most banks are open Monday to Friday during normal working hours, although some branches in more rural areas may only open part time due to lack of demand. However, most banks have call centres which have longer opening hours and many transactions can now be carried out online if you do not have easy access to a branch of your bank.

Savings accounts attract a higher rate of interest than current accounts, which often have none at all. There are also options to open fixed-term savings accounts, which allow the saver to deposit funds and earn a higher rate of interest in return for not accessing the money for a fixed period of time. Other financial products that can be provided by your bank may include pensions and investments and most banks are happy to give advice on the right products for you.

Local banks such as Arion are very welcoming to expats and offer many of their services – such as online banking – in several different languages. There are also international banks such as HSBC and Citibank that have branches in the country and it may be possible to open an account with one of these banks prior to moving to the country, particularly if your existing account is with the same bank, but you will still need to meet the same application criteria. Using an international bank means that transferring monies abroad will be a smoother transaction and should have reduced fees.