Accounts


Get to know all about the different Bank Accounts you can opt for, the procedure to open an account and close an account, and much more!

Savings Account

A savings account is a type of bank account that allows you to deposit and withdraw money from your account easily and which pays you some interest (depending on the prevailing market deposit interest rate scenario), on an annual basis.

 

What is a Savings Account?

Savings Accounts are the most commonly used type of accounts offered by Banks in Malta. Most banks offer the facility of a debit card to enable you to withdraw money from an ATM in Malta and abroad or to pay for goods and services in those places where bank cards are accepted. Don’t forget that ATM withdrawals may be subject to cash advance fees, as determined by the respective banks.

What is needed to open a Savings Account?

Each bank will have its own conditions for deposits or withdrawals from such accounts as well as their specific requirements to open such accounts (for example, some banks may require a minimum amount of money being deposited and kept to open an account whilst others can establish that you can simply open it). These conditions form part of a framework contract.

Make sure you are aware and fully understand these conditions before opening an account.

Which are the main advantages of a Savings account?

Savings accounts are very popular because they are:

  • SAFE. Your money is much safer in a bank than at home;
  • PRACTICAL. Payment instruments associated with bank accounts allow payments to be made without cash, even at a great distance;
  • CONVENIENT. Bank services associated with bank accounts allow regular payments to be made and received automatically (paying bills, receiving your salary, etc.);
  • FAST. By using the services available on the banks’ website portal, you can access your accounts and make transactions from your computer or mobile phone.

Current Account

A current account is a type of bank account that allows you to access and use your balance at any moment.

 

Why do I need a Current Account?

This type of account is usually opened if you want to pay for your goods and services by cheque. A bank usually offer the facility of a debit card linked to your current account.

Do I receive interest on a Current Account?

A current account does not pay interest on any credit balances in your account.

Before opening a current account, you should therefore check the conditions to do so and you are fully aware of the features of this type of account.

These conditions form part of a framework contract.

Fixed Deposit Account

Fixed Deposit Account, also referred to as Term Deposit Account, requires you to keep the amount deposited in the account for a term that can vary between 1 / 3 / 6 months and 5 years.

 

What is the rate of interest on a Fixed Deposit Account?

Most banks require that you deposit a minimum amount in order to open a Fixed Deposit account. The rate of interest paid varies depending on the term of the deposit. Remember that the bank quotes the interest per year. Once a term deposit expires you may request automatic renewal of the term deposit but this does not mean that the interest rate will remain the same, so it is important that you check the interest rate prior renewing the term deposit.

Can I withdraw my money from a Fixed Deposit Account?

There are very few instances when a bank may allow you to withdraw your money from a fixed deposit account before it reaches the term. However, if you are granted access to withdraw your money, penalties may apply.

Always check and familiarise yourself with all the terms and conditions that apply before opening the account.

How to Open a Bank Account

On opening an account, a bank will run the necessary checks to ensure and mitigate any possible risks.

 

What do I need to open a bank Account?

The following checklist will help you prepare the relevant documents which are generally requested by the banks when opening an account:

  • Personal identification document (ID Card or passport);
  • Verify your address (the bank may ask you to provide a recent utility bill (e.g. telephone or water & electricity to verify your address);
  • Confirm that you are legally eligible to open an account (age of applicant)
  • Keep record of your occupation;
  • Request a character reference (this is usually necessary to open a current account).

Occasionally the bank may also request you to provide additional information to comply with the Bank’s due diligence requirements (checks and reviews carried out by the banks on knowing their customers).

Other important information on opening an account:

  • It is important to inform the bank as to how you would like tax to be deducted from any interest credited to your bank account. Unless you advise the bank a withholding tax at the rate of 15% will be deducted from the interest paid on the accounts.
  • The bank may also ask you to sign a Data Protection Form or declaration (which may be part of the form used when applying or purchasing a product or service). However even if the Data Protection Form is not signed, you should still be provided with the data protection information regarding the right of the Bank to process your personal information.
  • You have a right to request your bank to inform you about the personal data held about you that is processed and to request its correction where necessary.
  • You may also be asked to authorise the bank to use information which it may have about you for direct marketing purposes, and you agree to receive periodical information about products or services supplied by your bank. You have a right to ask your bank not to use your personal data for any type of direct marketing. In that case, you need to inform the bank about your choice either by filling in the form for this purpose (available from your bank) or by writing to the bank opposing to the processing of your personal data for purposes concerning direct marketing.

Nowadays certain banks are also offering the option to open a Bank account online.  Basically, you will need to visit the Bank’s website and fill in the account opening forms accordingly.  The Bank will then contact you should you need to sign any forms and documents.  It is important that if you are going to open an account online, you read the terms and Conditions which should be available on the Bank’s website prior to filling in the relevant forms.

Fee Information Document and Annual Statments

Fee Information Document

The fee information document [‘FID’] is a document provided to you by the payment service provider before you open a payment account.  The Fee information document should be a short and stand-alone document and should contain the title ‘Fee Information Document’ so that you can distinguish it from other documents.

What is normally included in the fee information document?

The payment service provider should include the main fees for each service they offer in relation to the payment account. The FID should include the fees related to general account services; payments; cards and cash and overdrafts.

How can I obtain the fee information document?

The fee information document shall be given to you by the bank when they request information about accounts. The document should also be available on the website of the bank and at the branches.  Furthermore, banks are required to inform you every time they amend the fee information document, with sufficient notice period.

 

Annual Statements

A bank statement is a document that the bank sends to all account holders at specific times of the year and reports details of information for each transaction for the relevant period. It is mandatory to provide clients with the bank statement for payments account at least once a year (annual statement) free of charge.

The bank statement is different from the statement of fee, that provides the client, at least annually and free of charge, an overview of all fees incurred as well as information regarding the interest rates incurred in relation to the use of the payment account.

Is the bank statement always offered free of charge?

You as a consumer have to be provided with a bank statement at least annually and free of charge.  However, if you request to receive it on a more frequent basis, the bank may charge a fee for those extra statement. The cost of the extra statement is usually included in the fee information document.

What information can I find in the bank statement?

You can keep track of the balance on your account by means of a statement. This document provides clear and complete information on the account such as:

  • transactions (deposit, payments, transfers, withdrawals, etc.)
  • fees, charges and interest paid or received by you
  • balance of the account, that is the amount of money left in the account after all transactions have been recorded

How can I receive a bank statement?

Bank statements are provided as a hard copy such as a printed copy) via mail. However, if you have access to internet banking, you can also view it and/or download a copy as well.

Payment Accounts with Basic Features

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MFSA Payment Account with Basic Features

A Payment Account with Basic features is a basic bank account that allows, when legally residing in Malta or in another EU Member State that do not have other bank accounts in Malta, to have access to a set of banking services considered as essential, free of charge or at a reasonable cost.

 

Am I eligible to apply for a Payment Account with Basic Features?

If you are a legal resident of the EU country you are entitled to open a "Payment Account with Basic Features". Banks cannot refuse your application for such account just because you don't live in the country where the bank is established. If you are legally residing in Malta or in another EU Member State and you do not have other bank accounts in Malta and/or:

  • have no fixed address;
  • have no permanent identification documents;
  • have been resident in a correctional facility and/or any rehabilitation centre.

This right does not apply to other types of bank account, such as savings accounts.

 

What are the features of a Payment Account with Basic features?

Applying for a Payment Account with Basic Features facilitates you to:

  • Open, operate and close the account;
  • Place funds in the account;
  • Withdraw cash at the counters of the bank or at ATMs within Malta and other Member States;
  • Make payments using a payment card, including online payments;
  • Make credit transfers, including standing orders at terminals and counters and via any online facilities provided by the bank;
  • Execute direct debits within the European Union.

 

What additional features/ benefits are provided with this type of account?

You may also be provided with an overdraft facility, if you request it and if your bank agrees to provide it to you (not applicable for PABF bank accounts). Relevant documentation including Terms and Conditions should be provided.

In addition, when opening a Payment Account with Basic Features you can have access to other products and services being offered by the bank. However, these would be provided in addition to the ones included in the Payment Account with Basic Features, and the bank will charge for the provision of such products or services as described in its tariff of charges.

This account shall be offered, at least, in Euro, but can also be offered in the currency of any other Member State, at the sole discretion of the bank offering the account.

 

Which banks offer this type of Account?

Banks with five or more branches in Malta are obliged to offer the payment account with basic features. Banks with four or less branches may also provide this account but are not obliged to do so.

For more information you may visit your preferred branch, check the bank’s website or this leaflet.

 

When banks can refuse you a Payment Account with Basic Features?

  • You can be refused a Payment Account with Basic Features in case if you do not comply with the EU rules on money laundering and terrorist financing;
  • In some countries you may be refused if you already have a similar account in another bank in the same country;
  • If you're applying for a Payment Account with Basic Features outside the country where you live, banks may want you to provide clarifications for doing so.
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MFSA Payment Account with Basic Features

Bank Account Switching

If you hold a payment account with a payment service provider (bank or other financial institution) located in Malta you can request a switch to another payment account in the same currency, in an institution located in Malta or in another EU Member State.

 

What do I need to do to switch from one bank account to another?

Consider the following criteria before you proceed with switching from one bank account to another:

  • Ask for clear and complete information about this procedure both to the “old” and the “new”bank, including any applicable fees;
  • Transfer the money from your old account to the new one;
  • Inform third parties – such as your employer, social security provider and utilities providers – that you are changing your account;
  • Close your old account.

How does it work?

Initially you should start by giving your authorisation to the “new” institution. This authorisation shall be as clear and detailed as possible, allowing the institutions to understand which services you want to switch and, when applicable, those you wish to keep in the “old” institution.

After that, within two working days, the “new” institution shall transmit your requirements to the “old” one and both institutions shall complete the respective assigned tasks within five working days.

You shall have access to relevant information at no charge and readily available at banks. If requested, you shall also receive it in any durable medium, meaning a document which can be stored and accessed in the future.

As for each banking product or service if you have any complaint about the banks for the switching you can lodge it to the Office of the Arbiter for Financial Services. First you should always lodge the complaint with the bank and then if you are not happy with the outcome of the complaint you can go to the Arbiter for Financial Services to lodge a complaint.

Closing a Bank Account

Keeping a nil (€0) balance in your account does not automatically mean that your account is closed.  Banks may charge a fee if the balance in your account is zero and the account is classified as a dormant account.

 

How do I close my account?

The Terms and Conditions should include a section on Account closure wherein there is explained the process to be followed if you would like to close a bank account.  Alternatively, you can always contact the Bank and ask them to explain to you what needs to be done from your end in order to close off an account.  Most probably you may need to go to your branch in person, in order to sign the relevant documents.

You, and when applicable all the owners of the account, can request to close an account at any moment. This can be done by handing in a notice within the time period indicated in the Terms and Conditions.

However, if you don’t agree with any change in the terms and conditions that the bank may present during the life of the account, you can close the account with immediate effect. In this case, the request must be done by you before the entering into force of the measures presented by the bank.

What are the necessary steps taken to close off an account?

The following steps are necessary when closing an account:

  • In some cases the account holders must give consent to do so. You may wish to refer to the Terms and Conditions for further information;
  • all the owners return any payment cards, internet banking keys, cheques and any other means of payment related to the account to the bank;
  • the account has a positive or nil balance;
  • any credit agreement, such as loans or overdrafts are fully paid or an agreement on the respective payment is done.
  • You should also: ensure that there aren’t any direct debits or standing orders still active in the account;
  • delete the account number and associated card(s) number(s) from any e-commerce or online payment sites where you may have previously used them;
  • make a backup copy of the statements of your account;
  • request a document showing evidence that the account was closed.

Are there any fees for closing an account?

Go through the Terms and Conditions to get acquainted to the procedure of closing an account and all the related fees.

How can an account be closed if the account holder is deceased?

In the eventuality of an account holder passing away, the legal heirs to the deceased person must appoint a notary to act on their behalf to do the required searches and assist in carrying out this procedure, as well as providing all the documentation required by the bank.

Depositor Compensation Scheme

The Depositor Compensation Scheme is a rescue fund for depositors of failed banks which are licensed by the Malta Financial Services Authority (MFSA). It can only pay compensation if a bank is unable to meet its obligations towards depositors or has otherwise suspended payment.

 

What is it?

The Scheme is managed by a committee appointed by the MFSA and is made up of persons representing the MFSA, the Central Bank, licensed investment firms, the banks and consumers.

The Scheme is intended to promote confidence in licensed banks and in the financial system by being financed by the banks licensed by the MFSA.  This means that you will not be asked to contribute towards the scheme.

What does the Scheme cover?

Deposits made with banks licensed under the Banking Act incorporated in Malta including their branches operating anywhere in the European Economic Area (“EEA”).

Deposits placed with a branch in Malta of a bank incorporated outside the EEA are not covered by the Scheme in Malta. Neither does the Scheme in Malta cover deposits held in branches located outside the EEA of banks established in Malta.

You should read your bank’s information brochures to know if your bank is covered by the scheme.

Which types of accounts are covered by the Scheme?

All deposit accounts are covered by the Scheme. This includes all savings, current and fixed deposit accounts, as well as any accounts which, at the time of the banks’ failure, may be in credit (such as credit card accounts and overdrafts).

Deposits which may be evidenced by way of a certificate or which might be linked to an investment (such as products where the principal is not repayable in full upon maturity) are not considered to be deposits and therefore not covered by the Scheme. However, certificates of deposit made out to named persons and which existed in Malta on 2 July 2014 are covered by the Scheme.

Which currencies are covered?

The Scheme covers all currencies without distinction. However, in the event that the Scheme pays compensation, it will pay such compensation in euro. Therefore if your account is in any currency which is not the euro, the Scheme will exchange the amount in your account (with any accrued interest) into euro at the official exchange rate of the European Central Bank (ECB) when the Scheme is required to make such compensation.

How much will I receive?

All your deposits at the same bank are added up and the total compensation is subject to the limit of EUR 100,000 per depositor. This limit applies to the total amount of deposits held by you with the failed bank, irrespective of the number of accounts, the currencies of such accounts as well as the location of the bank/branch within the EEA.

In addition to the above, there may be instances where the depositor is entitled to receive additional compensation (up to EUR 500,000) for specific balances held in the respective accounts. For that, you would have to show evidence that any possible amount over EUR 100,000 qualifies as a temporary high balance.

www.compensationschemes.org.mt.

Frequently Asked Questions

This section gives you easy access to commonly-asked questions about banking aspects.

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Home Equity Release Scheme

How does it work?

  1. This product offers pensioners the possibility to translate part of the value of their property into a liquid asset.
  2. By entering into this contract, the pensioner will have more cash in hand whilst enjoying their retirement in their own home.
  3. Individuals who subscribe to this scheme will be essentially taking out a loan in exchange for regular income. The loan will be repaid when the property is sold.

Who is offering it and when?

  1. This product can be offered by licensed credit and financial institutions operating in or from Malta.
  2. MFSA is currently working on the regulatory framework that needs to be in place for it to regulate the equity release financial product.
  3. The equity release financial products regulations [Regulations’] will come into force on the 1st of September 2019. After this date no credit or financial institutions can offer such product without being duly authorised.
  4. Any licensed institutions providing such financial products will have one year to comply with the requirements set out in the Regulations published by the Authority.

Any tips?

  1. MFSA encourages interested individuals to seek independent professional advice and weigh their options before entering into an equity release transaction for the first time.
  2. It is your right to receive all the information you need to make an informed decision.
  3. MFSA will issue further updates once the framework comes into force. The public is encouraged to follow the Authority’s channels on Linkedin, Twitter and Facebook, or alternatively visit www.mfsa.mt for the latest updates.
Protection of Deposits

Question: I have funds in a bank in Malta are denominated in euro. A relative of mine, who for many years resided in Australia, has an account denominated in Australian dollar with the same bank. If our bank fails, are we both covered by the same depositor compensation scheme?

The Depositor Compensation Scheme is a rescue fund for depositors of failed banks which are licensed by the MFSA. The Scheme, which has been in force since 2003, can only pay compensation if a bank is unable to meet its obligations towards depositors or has otherwise suspended payment.

The Scheme is managed by a committee appointed by the MFSA and is made up of persons representing the MFSA, the Central Bank, licensed investment firms, the banks and consumers.

The regulations (Legal Notice 369 of 2003) which transpose the EU Directive on Depositor Guarantee Schemes obliges the committee to compensate depositors following a process of due diligence which should not take longer than three months (which may be extended to another six months by the competent authority).

All depositors of Maltese banks are covered up to €100,000 (per depositor, per bank) and depositors will no longer have to bear the initial 10% of their losses.

Most types of deposit are covered, including current, deposit and savings accounts. Similarly, most depositors are covered by the Scheme. There are however some depositors who might not be able to claim. Companies which are permitted to draw up abridged balance sheets in terms of the Companies Act are also covered by the Scheme.

Joint accounts are divided equally between account holders where there is no indication of the share of each holder in the account. Each will be covered up to the limits prescribed in the Regulations, subject to eligibility. In respect of deposits held by a person acting as trustee or nominee for one or more beneficial owners, the deposit making up the claim shall be deemed to belong to such beneficial owners equally unless there exists specific information which may otherwise determine the beneficial interests of such persons.

A depositor can only submit one claim for all his deposits taken in aggregate against a failed licensed bank, including the depositor’s share in a joint account or a client account, less any amounts due to the bank (such as loans).

The Scheme covers deposits denominated in euro and deposits in the currencies of EEA countries whose currency is not the euro (such as the pound sterling). This means that deposits in Australian dollar are not covered by the scheme.

In the unlikely event of a bank failure and the Scheme needs to compensate depositors, the payout period is 20 working days that are reckoned from the date when the competent authorities determine that a credit institution is unable to repay its deposit liabilities – with a possible extension of 10 working days in exceptional circumstances.

Credit Institutions are also required to be more transparent with regard to the information that they are obliged to provide to current or prospective depositors in connection with the scheme.  The information on the scheme contained in advertising by participants will be subject to certain restrictions in order to prevent adverse repercussions on the stability of the banking system or on depositor confidence.

More information about the Scheme is available from www.compensationschemes.org.mt.

Question: I have been noticing multiple adverts on newspapers and TV advertising very good rates for fixed deposit account by banks which I had never been aware of. All these adverts claim that my deposit is protected under the Depositor Compensation Scheme but I want to make sure that none of these adverts is misleading – such as for example, enticing me to deposit my hard-earned savings with them on the basis that my deposit is covered by the scheme, when in actual fact it is not.

All banks licensed by the MFSA are required to be members of the Depositor Compensation Scheme. The Scheme provides a level of coverage of up to €100,000 for each depositor in the event that a bank becomes insolvent and therefore is unable to honour its obligations towards such depositors.

In light of the new regulations which came into force in August 2009, all banks are required to indicate clearly that they are members of the Depositor Compensation Scheme in Malta. Very shortly, all banks will also be providing information to their depositors (on demand or through their websites) relating to the scheme including the circumstances under which the scheme would pay compensation. This information is already available on the Depositor Compensation Scheme’s website (www.compensationschemes.org.mt) but banks are now also required to provide this information to depositors to enable them to understand better how the scheme works and whether and to what extent their deposits are covered.

In brief, the scheme covers deposits made by individuals and small companies which are allowed to draw up abridged balance sheets in terms of the Companies Act. The scheme covers deposits in the currencies of all EU and EEA (European Economic Area). Other non – EU currencies are excluded. There is no closing date as to the limit of €100,000 (as many depositors continue to think). The limit is per person, per bank so for example, if two banks are unable to honour their obligations at the same time, a depositor is covered for up to that limit for each insolvent bank.

As with diversification, there is absolutely no harm for a depositor to diversify and distribute his/her savings between different banks.

More information on the Depositor Compensation Scheme is available here.

Opening of Bank Accounts

Question: I would like to bring to your attention a problem many parents may be encountering. Once our children are 16 years of age they are told that they can have their own accounts. Knowing my children well, I went over to the bank to request information about my son’s account because I wanted to be certain that he is depositing his pocket-money. However, I was told that I could not be given such access as the account belongs to my son. I informed them that I was the parent and that legally he is still under-age and that my husband and I are still legally responsible for him. However the reply was that this was the practice in banking services and that the parents are consulted only if a request for a loan is made. I find this to be very wrong. At that young age many of them are still irresponsible and still need some guidance from the parents.

Article 188 of the Maltese Civil Code (Of Majority, Interdiction And Incapacitation) states that ‘Majority is fixed at the completion of the eighteenth year of age’. On the other hand, Article 971A of the Civil Code providing with the ability of children over sixteen years to open and operate bank account provides that ‘Notwithstanding any provision of this Code, a child who has attained the age of sixteen years may deposit money in an account opened by the child in his or her own name with any bank, and any money deposited in any such account may only be withdrawn by such child notwithstanding that such money may be subject to the administration, usufruct or authority of any other person. For all purposes of law the child shall with regard to the opening and operation of any such account be considered a major.’

In this respect, paternal authority ceases as soon as a child opens a bank account in his/her name.

Facilities may only be granted to a minor who has attained the age of sixteen years and such minor shall be deemed to be major with regard to obligations contracted by him/her for purposes of trade, if (i) he/she has previously been authorized to that effect by the parent to whose authority he/she is subject, by means of a public deed registered in the Civil Court or, where both parents are dead, interdicted or absent, he has been authorized by the judge of the Civil Court and (ii) a summary of the deed of authorization or of the decree aforementioned has been published by means of a notice in the Government Gazette and in another newspaper.

In this regard, minors who are traders authorized as aforesaid can by reason of their trade charge, hypotheca for personal purposes (home loan).

For instance, banks would not issue a credit card to young adults under 18 years of age. They may only do so if the primary cardholder is either the parent or legal guardian – in that case, the supplementary cardholder may be the young adult. Any debts incurred by suchte and even alienate their property, without any of the formalities prescribed by the civil law. It is important to note that in these instances facilities may only be provided to minors in relation to their trade (business loan) and not supplementary cardholder would be under the responsibility of the primary cardholder.

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