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.

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, 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.

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

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.

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.

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.

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.

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?

The payment account with basic features is available to anyone who is legally resident in Malta or in another EU Member State, including those whose status may mean they are not eligible for other banking products.

This means you can get this account even if you have no fixed address, if you are a refugee, stateless person or asylum seeker, or if you have not been granted a residence permit but cannot be sent back to your home country for legal or factual reasons.

Although you have a right to open a payment account with basic features, banks have an obligation to verify that you actually need this account for your day-to-day transactions.

WHAT IS A PAYMENT ACCOUNT WITH BASIC FEATURES?

A payment account with basic features is a bank account for personal use which offers basic banking services. This account may be available either free of charge or for a reasonable fee.

You will not be under any obligation to buy any other banking services from the bank in question in order to access your basic bank account.

WHAT CAN I DO WITH THIS ACCOUNT?

You will be given a debit card so that you can access the money in the account.

You will be able to withdraw your cash either from bank counters or from ATMs, in Malta and Gozo, and also in other EU Member States.

You will be able to make payments with your card, including online ones.

You will be able to transfer funds to other accounts, including regular payments (for example, through standing orders) – either from bank counters and ATMs, or via internet banking. You will also be able to set up direct debits to anywhere in the EU.

ARE THERE ANY ADDITIONAL FEATURES?

There may be other facilities which would become available to you depending on the bank with which the account is opened. For example, you might be entitled to an overdraft.

CAN THE ACCOUNT BE PROVIDED IN DIFFERENT CURRENCIES?

The account will be offered in Euro – at the least – but it is up to the bank to decide whether it will offer the account in the currency of another EU Member State.

HOW LONG DOES IT TAKE TO OPEN THIS TYPE OF ACCOUNT?

Banks have a maximum of 10 days in which to tell you whether your application was accepted or refused.

KEEP IN MIND THAT…

The account is only for personal use and cannot be used for business purposes. For example, you can receive your salary into the account, and you can use it to pay for your living expenses. But you cannot use it for a business, for a charity, for a club or society, or for any other organisation.

The law has introduced these accounts with basic features to ensure that everyone can – at the very least – access basic banking services. This means that if you already have a bank account, you might not be entitled to this type of account.

You might be able to open a payment account if you agree to close your existing one – but the bank has a right to verify that this has been done. If the bank finds out that you did have another account and that you did not close it, your payment account could be closed immediately.

Whatever your status, you will need to provide official proof of your identity before you can open the account. Banks are obliged to carry out background checks of all their customers so if you fail to provide the requested documents, your application may be turned down.

Banks have to abide by strict rules to prevent money-laundering and the funding of terrorism. These rules also require banks to screen any applicants for their services. If you do not pass this screening, the bank shall refuse to open your account. In addition, if you do not use the account for more than 24 months, the bank has the right to close it.

If a bank refuses to provide you with a payment account with basic features, it must inform you of the reason, in writing and free of charge. However, there are some cases where the bank is permitted, under the law, not to justify its refusal to open your account. These cases would relate to situations where the provision of such information would be prejudicial to national security, public policy or the bank’s anti-money laundering obligations.

Credit institutions shall not refuse to open a payment account with basic features on the basis of the consumers’ financial circumstances, including their employment status, level of income, credit history or personal bankruptcy.

WHICH BANKS MUST OFFER A PAYMENT ACCOUNT WITH BASIC FEATURES?

The obligation on banks comes from the Payment Accounts Regulations (Legal Notice 411 of 2016) – but it does not apply to all the banks in Malta.

Banks which have five or more branches in Malta must offer the payment account with basic features. They may also offer online accounts with the same features. Of course, other banks may offer this account – but they are not obliged to do so.

Specifically, you should find this account available at:

• APS
• BNF
• BOV
• HSBC
• Lombard