Low cost bank account: What can you do and how much does it cost?

Deepak Gupta July 3, 2022
Updated 2022/07/03 at 1:05 PM

A minimum banking services account (low cost) is a current account that allows the respective holder to access a set of banking services considered essential at a reduced cost.

According to recent data, the number of bank accounts with minimum services increased, in 2021, by 16.1% to 150,405, year-on-year, the Bank of Portugal (BdP) announced today. But what can you do with a “low cost” bank account?

According to recent data, there are already more than 150 thousand Portuguese with SMB (minimum banking services). At the end of last year, “76% of SMB accounts had only one holder” and “only 4.7% of SMB accounts were held by people who had other current accounts, as they were co-owners of a person over 65 years old.” years or a degree of disability equal to or greater than 60%.

According to the BdP, last year “the percentage of SMB account holders with other banking products in the same institution increased”.

But what can you do with a bank account with minimal services?

According to Banco de Portugal, in addition to opening and maintaining a bank account with minimum services, the holder can, at no additional cost:

  • Have a debit card to use the minimum banking services account;
  • Move through ATMs in Portugal and in the other Member States of the European Union;
  • Operate the account through the homebanking service (ie the credit institution's website) and the credit institution's branches;
  • Make deposits, withdrawals, payments for goods and services and direct debits;
  • Make intrabank transfers (i.e. transfers to accounts opened with the same credit institution where you are domiciled)
  • Carry out interbank transfers (that is, transfers to accounts opened in other institutions), through ATMs, without restriction on the number of operations that can be carried out, and through homebanking, in which case there is a maximum, for each calendar year, of 24 national and European Union interbank transfers;
  • Make transfers through payment applications (apps) operated by third parties (for example, MBWay), with a limit of five transfers per month and an amount equal to or less than 30 euros per transaction.

Credit institutions cannot charge fees for the provision of minimum banking services, expenses or other charges that, annually and as a whole, represent a value greater than 1% of the value of the social support index (IAS).

This means that, in 2022, the annual cost of minimum banking services cannot exceed 4.43 euros (corresponding to 1% of the IAS).

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