Meginmál

Payment and savings accounts

  • Consumers can use a payment account to deposit or withdraw cash, make and receive payments, and transfer funds to and from third parties.
  • Commercial banks and savings banks are obliged to offer consumers, who are legally domiciled in the European Economic Area, the option to open and use a general payment account.
  • General payment accounts must be linked to online banking.
  • A debit card linked to a general payment account that can be used to make payments or withdraw cash from banks or savings banks and ATMs must be issued.
  • If you need a short-term loan to cover unexpected expenses, you can request an overdraft on a payment account.
  • Commercial banks and savings banks must carry out due diligence pursuant to the Act on Measures against Money Laundering and Terrorist Financing, to obtain information on, among other things, the source of capital and political connections of the person requesting the creation of a general payment account. A request for the creation of a general payment account may be rejected on the basis of the information provided through due diligence.  
  • There are many types of savings accounts and their purpose is to safeguards savings.
  • A wide selection of savings accounts is offered by banks and savings banks so it is a good idea to research the selection carefully and to choose a savings account that suits you.
  • Savings accounts are either fixed or non-fixed term accounts, e.g. there are savings accounts that are intended for children and remain locked to the age of 18. Short-term savings are also offered, i.e. for several months. Interest rates on fixed-term savings accounts are usually higher than those on non-fixed term savings accounts.
  • Savings accounts can be indexed or non-indexed. Interest rates on indexed savings accounts are lower than on non-indexed ones, but indexation is calculated on the deposit and interest rate of indexed deposits and must therefore be taken into account when comparing interest rate terms. 
  • Interest rates are determined by the maturity periods, the amount in the account and whether it is an indexed or non-indexed account.
  • Debit cards cannot be linked to savings accounts.  
  • Carefully check the terms for payment and savings accounts
  • Security must be ensured when using debit cards linked to a payment account.
  • A good rule of thumb is not to keep large sums of money in payment accounts in order to minimise losses if a card or card information is stolen. 
  • Carefully check the card issuer’s terms and conditions. Card issuers are commercial banks and savings banks.
  • Carefully check the price lists of banks and savings banks, e.g. transaction fees, card fees, service fees, interest rates, etc.
  • Carefully check and compare the terms of deposit accounts at banks and savings banks e.g. fees and interest rates.
  • Choose a savings account that is suitable for achieving savings goals, e.g. the length of time to tie up your savings for.
  • Capital gains tax is paid on interest and indexation.
  • Deposits are guaranteed for a value of up to 100,000 euros in Icelandic króna, see details tvf.is.