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Iceland - Banking

In 2008 three of Iceland’s largest banks were nationalised and as a result the 62 billion dollar foreign debt led to their demise causing stock markets to fall, businesses to go bankrupt and foreign investors to leave. Following on from this the 2008 global financial crisis caused the banks to no longer allow lending. Whilst this dramatic turn of events did affect Europe and business relationships in Iceland, the country requested the UK, Belgium and Luxembourg to insure deposits in branches of banks in their countries. Haarde and Gialadottir arranged for a $10 billion bailout to insure Iceland's bank deposits from the International Monetary Fund. Now, Iceland has bounced back with rising salaries, a booming tourist industry and the GDP also rising as a result.

The currency in Iceland is the króna and the current currency rate for 1 Krona in Pound Sterling is 0.0079GBP. For the US Dollar it is 0.0089 USD. króna can be found in coins plus denominations of 100kr., 50kr., 10kr., 5kr. and 1kr. In terms of bank notes, they come in denominations of 5000kr., 2000kr.,1000kr., and 500kr. US and UK banks do not have a presence in Iceland after the 2008 financial crash which saw HSBC and Citibank leave the country though their ATM machines remain. If you need to access cash in Iceland there are many ATMs available within Reykjavik and other cities and towns. ATM’s are available 24 hours a day for convenience. There are also 170 banks from which you can withdraw money so accessing funds is never a problem. Typical bank opening hours are weekdays from Monday to Friday 09.15 to 16.00. Do consider if you are located or traveling to somewhere more remote like North Iceland that banking hours particularly in winter maybe reduced.

The local banks in Iceland are Íslandsbanki, Kvika Banki (private), Landsbankinn and Arion Bank and the reserve bank or central bank is the Central Bank of Iceland which is run by an independent administration and is government owned. Currently there are no specific services offered to expats although plenty of banks encourage expats to contact them to discuss options and all of them offer English speaking staff and online banking in English. Below are the main banks who offer online banking in English and other financial services.

Landsbankinn offers savings accounts such as Vaxtareikningur 30, a non-indexed savings account with the interest rate adapting with the account balance total. All savings accounts in Iceland offer good rates of interest, but current accounts have little to none. One available current account is the Vaxtareikningur - Premium Rate Account which offers short term deposits which can be withdrawn after 7 days with high interest on such deposits with no long term commitment. Bank cards and cheque books are issued with savings accounts and current accounts. Other current accounts such as the Kjörbók - Regular savings accounts which are not a fixed term account, do not come with fees and are non indexed. Other services available to customers are overdraft systems, currency exchange, debit cards, credit cards and gift cards plus a specific array of loans.

Store locator
Bank website
Email: info@landsbankinn.is (Email to receive forms and register interest)
Phone: (+354) 410 4000

Arion Bank
Arion Bank offers a very wide range of savings accounts with an example being the Óverðtryggður 18 account which has a 4.60% interest rate, is non indexed has no minimum balance and is a useful account to save in for important, larger purchases. Bank cards and cheque books are issued with savings accounts and current accounts. The bank suggests that many of their savings accounts could be of interest to foreign nationals and that their online banking is available in four languages including English. Also suggested would be a Visa debit payment card with contactless payment card and 24 hour online banking. Other services available are pension accounts for those working in Iceland, international currency transactions for receiving funds from abroad and transferring overseas plus a custody account/brokerage account wherein you are able to open an account with Arion Bank without having moved to the country yet.

Bank website
Email: info@landsbankinn.is
Phone: (+354) 410 4000

Íslandsbanki offers an extensive list of indexed and non-indexed savings accounts plus a standard current account with card, internet banking and overdraft facility. Bank cards and cheque books are issued with savings accounts and current accounts. It offers accounts for children, a domestic foreign currency account and a retirement account too. The bank also offers loans, mortgages, pensions accounts with no net worth tax, debt relief programmes, online banking in English, currency exchange and debit and credit cards.

Store locator
Bank website
Email: islandsbanki@islandsbanki.is
Phone:(+354) 440 4000

Anyone moving to Iceland and planning on working there must open a bank account for their salaries to be paid into. It is possible to also have an old bank account from your homeland and maintain it but the charges of depositing money in and withdrawing from a foreign bank account far surpass any reason to do it. The documentation asked for by banks to open an account may vary but generally you will need an Icelandic ID number (kennitala) from the National Registry (þjóðskrá) which some banks can assist you in getting. Also required would be an up to date passport and proof of address such as a copy of your tenancy agreement or alternatively a utility bill. Both savings accounts and current accounts may need deposits although banks can offer savings accounts which do not. It’s best to go into the branch to find out what accounts truly suit your personal needs.

Online banking is the most common way to access bank accounts with 91% of users checking their account this way as of 2015. As we know, it is now common for internet banking to be found in English as well as other languages and for the most part it is well received and with few negative reviews, as is personal banking in general. Icelanders always pay with cards regardless of how small the purchase so it isn’t necessary to keep cheques or cash on you all the time. Along with cheques and credit cards, debit cards are almost always accepted so all you need to do is enter your pin. The most common cards are Visa, Mastercard and Europay.

Applying for an overdraft in Iceland depends on how long you have resided there and the suitability of your credit history. With so much available online via credit checking systems such as Experian and Clearscore individuals can make use of these to demonstrate their credit score when applying for a loan. It is actually the bank and more importantly the bank manager who oversees your application who makes the final decision on whether you get an overdraft. Make an appointment so that the bank can assess your personal circumstances and bring with you as much information as you can to support your claims that you are reliable with money. Consider an overdraft if you plan on paying with cheques as this can cover customers from incurring fines for returned cheques due to insufficient funds being in your account. As a result of going into the red you may find your account frozen or suspended.

Bank led loans for expats in Iceland aren’t as common as one would hope but banks certainly consider applications and often do now lend to customers. You usually need to be a customer of the bank already and have had some time with the bank so they can see how you work financially. The typical types of loans available generally as listed via Arion Bank are property loans, vehicle financing, student support loans and computer loans. When deciding on the loan you need it’s important to book an appointment to talk to someone face to face about your options. You’ll need to come prepared, ready to represent yourself and your job too if you have one. The bank needs to know they are investing well in a customer who will be trustworthy. It’s important to know what you want, what you need the loan for and have some solid information to back it up with, make sure you arrive informed.

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