How to Choose a Bank and Optimize Payments in Portugal

Introduction

The financial system is one of the first areas that newcomers face when relocating to Portugal. Opening a bank account is practically essential for everything: from renting housing and paying taxes to purchasing real estate and submitting applications to SEF. However, for many foreigners, the Portuguese financial system initially seems complicated, with bureaucratic obstacles.

Common difficulties include:

• lack of a confirmed address in Portugal;
  
• freelancers and digital nomads without formal employment;
  
• retirees and pensioners who receive income from abroad.
  

The goal of this article is to help you understand how the banking system works in Portugal, how to choose a suitable bank, what documents are needed, how to open an account as a foreigner, and how to optimize payments and transfers — both for everyday life and for those who run a business or work with international clients.

We will look at:

• the structure of the Portuguese financial system;
  
• the best banks for foreigners and digital nomads;
  
• how to avoid hidden fees and lottery-like outcomes when making payments;
  
• how to pay taxes and utility bills with minimal losses and stress.
  

Our goal is to help you set up your financial life in Portugal, even if you haven’t yet fully settled in the country.

Overview of the Banking System in Portugal

The Portuguese banking system is one of the oldest in Europe, yet it actively adapts to digital and international challenges. Following the 2008 financial crisis, a major reform of the banking sector was carried out, and today it presents itself as stable, reliable, and with a developed infrastructure operating within the legal system of the European Union and the standards of the European Central Bank (ECB).

Key Features of the Banking System in Portugal

1. Regulation and Supervision

The main authority overseeing the activities of all financial institutions in the country is the Banco de Portugal (Central Bank of Portugal). Its functions include:

• monitoring financial stability;
  
• licensing banks;
  
• regulating monetary operations (Carta de Responsabilidades de Crédito);
  
• protecting consumers (including interest rates and commissions);
  
• participating in the European payment system.
  

Since the Bank of Portugal is part of the European network of central banks (ESCB) and works under the ECB, this means that the entire financial system of Portugal is closely integrated with European standards.

2. Deposit Protection

All accounts in Portuguese banks are protected by a guarantee system — Fundo de Garantia de Depósitos. This means that even in the event of a bank’s insolvency, deposits of up to €100,000 per client per bank are protected — in accordance with EU Directive 2014/49/EU.

The Role of Banks in Daily Life and Business

A bank account in Portugal is not just a convenience. In many cases, it is an essential requirement for accessing basic public services and the private sector. Here are just a few situations where you can’t do without it:

• Rental of housing: Most landlords require an IBAN from a Portuguese bank for rent payments.
  
• Receiving a salary payment: Employers transfer your salary only to a Portuguese account.
  
• Obtaining a residence permit (residência): When applying for D7, Digital Nomad, or Golden Visa, having a Portuguese bank account is mandatory.
  
• Paying taxes and receiving refunds: The AT (Autoridade Tributária) tax office requires an IBAN for tax refunds and direct tax debits.
  
• Paying for public and private services: Utility payments are often processed through automatic debits (Débito Direto).
  

In addition, a bank account is required for registering a business, receiving social benefits, paying for health insurance, connecting to services like MBWay (such as Apple Pay or other payment systems), and for secure international transfers.

IBAN, SEPA, and SWIFT Systems: How They Work

IBAN (International Bank Account Number) — is a standardized bank account number used for international transfers and within Europe. In Portugal, the IBAN always starts with the letters PT and consists of 25 characters (for example, PT50 0028 0123 1347 5876 9015 4).

SEPA (Single Euro Payments Area) — an area that unites 36 countries of the EU and some others. Within SEPA, euro-denominated transfers between accounts are performed without additional fees, as if within one country. SEPA transfers usually take 1 working day.

SWIFT — a system used for international transfers outside SEPA. These are more expensive, take longer, and often involve intermediary banks.

Tip: If you need to send money from outside the EU, SEPA transfers are not available. In such cases, international services like Wise, Revolut, and Western Union are often used.

Major Banks in Portugal: From Traditional to Digital

In 2025, the Portuguese financial market is divided into two large segments: classical universal banks with physical branches and modern digital banks that allow you to manage your finances entirely online. Both operate under the supervision of the Bank of Portugal, have a license, and participate in the deposit insurance system.

The choice between them depends on what exactly you need:

• reliability and offline service;
  
• convenience of digital management and minimal fees;
  
• access to mortgage and investment products;
  
• or just a simple account for receiving salary and paying rent.
  

Let’s break everything down.

The Largest Commercial Banks in Portugal

These banks have a long history, offer a network of branches throughout the country, and cover a wide range of services — from savings accounts to mortgages and investments. They are most suitable for those looking for a “traditional” banking experience.

1. Millennium BCP

• One of the largest private banks in Portugal.
  
• Offers user-friendly interfaces in online banking and mobile app.
  
• Has English-speaking support (available in some branches).
  
• Branches are present in large cities and even in some smaller towns.
  

Important: often requires proof of income to open an account.

Pros:

• Convenient for foreigners who plan to apply for a residence permit and require reliable service.
  
• Suitable for long-term clients (more than 5–6 months), particularly for those needing additional services such as mortgage or insurance.
  

2. Caixa Geral de Depósitos (CGD)

• A state-owned bank, the oldest in the country.
  
• Very reliable, but primarily focused on Portuguese citizens.
  
• More difficult to open an account for foreigners without residency.
  
• Has programs and discounts for students, pensioners, and families.
  

Pros: stability, government support, participation in all state programs.
Cons: not always customer-friendly, weak English-language support.

3. Novo Banco

• Formed after the restructuring of the former Banco BES.
  

Pros: operates as a commercial bank, serves private and corporate clients.
May be of interest for large property purchases and high-value clients.
Cons: had a reputation for instability in the past; the situation is gradually stabilizing.

4. Santander Portugal

• An international banking group with branches across the country.
  
• High service level, good mobile app support.
  
• Convenient for businesses and wealthy clients.
  
• Has special packages for foreign clients.
  

Pros: modern digital experience, fast service, support in English.
Cons: not the most budget-friendly bank, may charge higher commissions.

5. BPI (Banco Português de Investimento)

• One of the largest private banks, part of the Spanish CaixaBank group.
  
• Offers a wide range of services for businesses and investments.
  
• Has programs for foreign investors (e.g., Golden Visa).
  

Pros: reliability, modern digital solutions.
Cons: not the friendliest bank for opening an account without a residence permit.

Digital and Alternative Banks

If you care about mobility, low fees, and don’t need a physical office — consider digital banks. They are popular among the young, digital nomads, and those who don’t want to wait in queues.

1. ActivoBank (a subsidiary of Millennium BCP)

• A fully online bank with a modern mobile app.
  
• One of the most loyal to expats.
  

• Minimal fees (often — €0 for service), simple interface.
  
• Allows you to open an account online or at Millennium branches.
  
• Suitable for everyday payments, SEPA-transfers, MBWay.
  

2. Moey! (a product of the Credito Agricola group)

• A modern mobile bank with free service.
  
• Supports payments via MBWay and Google/Apple Pay.
  
• You can open an account online, but you need a Portuguese phone number and NIF.
  
• Some users report slower response and weaker customer service.
  

3. Revolut and N26 (not Portuguese, but operating in the EU)

• Convenient for digital nomads, online shopping, travel.
  
• You can get a European IBAN (often from another EU country), which is suitable for many daily tasks.
  
• Not always accepted by landlords in Portugal when renting — they often require a local Portuguese bank for Debito Direto services.
  

Reputation and Ratings of Banks in the Eyes of Foreigners

What do foreigners value in Portuguese banks?

• Responsive support. Preferably in English or at least in the app.
  
• Transparent conditions. Clear fees and simple interfaces.
  
• The ability to open an account without a residence permit. This is especially important for new residents.
  
• Integration with Wise, MBWay and international transfers.
  
• Support when applying for a residence permit. Some banks provide documents confirming financial stability, which are needed for SEF/AIMA and AT applications.
  

According to informal user reviews (on forums, blogs, etc.):

• The best banks for new residents are considered to be ActivoBank and Millennium BCP.
  
• For digital nomads — Moey! and Revolut (in combination with a Portuguese account).
  
• For investors — BPI and Santander.
  

Banking Services and Products in Portugal

Banks in Portugal offer a fairly wide range of services — from standard (current and savings accounts) to investment and insurance. Conditions may vary depending on the bank, so it is important to understand what you really need in order not to overpay for service or fees.

Current (Deposit) and Savings Accounts

Conta à ordem — current account
This is the main banking product. It allows you to:

• Receive salary or other payments;
  
• Pay for rent, utilities, transportation, and more;
  
• Make SEPA transfers within the EU;
  
• Connect to MBWay and Multibanco;
  
• Use banking applications for payments and transfers.

Features:

• Usually issued together with a debit card (Cartão de débito).
  
• Maintenance fees vary by bank: from €0 (Moey, ActivoBank) to €5–7 (Millennium, Santander).
  
• To open an account, you may need a NIF, passport, proof of income, and proof of residence address.
  

Conta Poupança — Savings Account

Used for savings. May bring a small interest income (in 2025 around 1–2% annual gross yield). You can usually withdraw funds at any time, but interest is calculated monthly or annually.

This is suitable for those who want to store a “financial cushion” separately from everyday expenses. Often linked to a current account and replenished automatically.

Loans, Mortgages, and Credit Cards

Mortgage (crédito habitação)

To purchase property in Portugal, foreigners can get a mortgage, even without a residence permit, if they have a stable, documented income.

Conditions (2025):

• Interest rate: from 3.6% to 6.0% per year (depending on the bank, income, and down payment).
  
• Down payment: about 20% for residents and 30% for non-residents.
  
• Term: up to 40 years (up to 75 years of age at the time of full repayment).
  

Example:
Property purchase for €200,000.
Down payment — €40,000.
Monthly payment at 4% for 30 years — about €760.

Banks usually request:

• Proof of income, employment, tax declarations, etc.
  
• Property appraisal (done by a certified company).
  
• Life insurance and property insurance (mandatory).
  

Personal Loans (crédito pessoal)

Popular for small purchases. Often issued quickly based on income statements. Annual rates vary widely — from 6% to 15–20%.

Deposit Products and Investments

Depósitos a Prazo (Term Deposits)

Term deposits with a guaranteed interest rate, typically between 1% and 2.5% annually (in 2025). Funds are locked for 3, 6, or 12 months. Early withdrawal may result in loss of interest.

Suitable for:

• guaranteed storage of a large sum,
  
• when you don’t plan to use the money in the near future.
  

Investment Funds and Products

Banks (especially BPI, Santander, Novo Banco) offer access to mutual funds (fundos de investimento), bonds, and insurance-based financial products.

These are often used for long-term planning (retirement, education, major purchases).

Important: investment products are not guaranteed by the government and carry market risk.

Internet Banking and Mobile Apps

Portuguese banks have made noticeable progress in digitalization over the last 3–5 years. Most major banks offer:

• User-friendly apps with options for transfers, bill payments, and tax payments;
  
• Integration with MBWay, Multibanco, Google Pay and Apple Pay;
  
• Convenient tools for managing IBAN and account history.

Comparison of App Usability (Based on Customer Reviews)

Opening a Bank Account for Foreigners in Portugal

Opening a bank account is an essential part of relocating to Portugal. Without it, it’s practically impossible to rent a home, receive a salary, provide documents for obtaining a residence permit, pay taxes, and even use many digital services.

However, many foreigners — especially those who do not yet have a residence permit but are planning legalization — encounter difficulties at this stage. Some banks refuse to open accounts without official proof of residence, others require a Portuguese phone number, proof of income, and utility bills — all of which complicate the process. That’s why thousands of people experience frustration here every year.

Required Documents

Each bank sets its own requirements, but the standard base set of documents, without which no bank will open an account, is:

1. NIF (Número de Identificação Fiscal) — Tax Identification Number
   
   • Obtained from the tax office (AT) or through a representative.
     
   • Required for any financial activity in the country.
     
2. ID Document
   
   • Passport or residence card of an EU/Portugal resident (if applicable).
   • Passport or a residence card of an EU/Portugal resident (if applicable).

3. Proof of Address

This can be:

• a rental contract;
  
• a declaration from Junta de Freguesia;
  
• a foreign bank statement with an address;
  
• a letter confirming the address, signed by the property owner.
  

4. Proof of Income or Employment

This can be:

• an employment contract;
  
• a certificate from your employer;
  
• a bank statement from a foreign bank;
  
• a bank balance certificate;
  
• a letter from an accountant (if self-employed);
  
• a pension document or proof of income from abroad.
  

Important:
Some banks (like ActivoBank) only require a NIF and passport, especially if you’re opening a “basic” account with limited activity. Others may require more complete documentation.

Step-by-step guide to opening a bank account

Step 1: Prepare all documents
Scan and print them — even for online account openings, staff may request physical copies.

Step 2: Choose a bank
For non-residents, accounts are most commonly opened at:

• Millennium BCP (via branch)
  
• ActivoBank (via physical points or mobile app)
  
• Santander (only with a residence permit)
  
• Moey (requires NIF and phone number)
  

Step 3. Schedule an Appointment

Some banks (such as CGD) operate by appointment only. Check their website or call to confirm.

Step 4. Submit Documents Online or In Person

• In person: Bring original versions of all documents.
  
• Online: At ActivoBank or Moey, you’ll need to verify your identity via video call or SMS code.
  

Step 5. Receive Login Details and Card

• You’ll receive your IBAN immediately after opening the account.
  
• A debit card is sent by mail to the specified address or can be picked up at a branch.
  
• Install the bank’s mobile app and MBWay — it’s useful for payments and transfers.
  

Challenges Foreigners May Face

Rejection Without Explanation

Some banks (especially CGD and BPI) may reject non-residents without a local rental contract or without clearly stating a reason.

Language Barrier

Not all bank employees speak English fluently. This can be especially difficult in small towns.

Proof of Permanent Address

If you’re renting temporarily or living with someone, you may be asked to provide a Declaração de Residência (residency declaration from Junta de Freguesia). Some banks don’t accept documents from foreign banks or alternative forms of address confirmation.

Unproven Foreign Income

Some banks are skeptical of foreign income, especially if it’s not earned in Portugal. In this case, it’s important to prepare supporting documents showing income stability and check with the bank if income from abroad will be accepted.

Working with Payment Systems: Wise and Others

One of the main challenges foreigners face in Portugal is transferring money across borders. Many banks still charge high fees for international transfers, especially for SWIFT transactions, and converting currencies is not always favorable.

In this context, international payment systems such as Wise (formerly TransferWise) have become a real lifesaver for thousands of expats, freelancers, entrepreneurs, and students.

Overview of Wise: How It Works and What the Benefits Are

Wise is an international payment service registered in the United Kingdom and licensed in the European Economic Area. It allows you to:

• Quickly transfer money between countries with minimal fees;
  
• Open multicurrency accounts with banking requisites (including IBAN, USD, GBP, etc.);
  
• Receive payments from clients and employers;
  
• Pay for goods and services in any country.
  

Benefits of Wise:

• Better exchange rates — uses real interbank rates, not inflated bank ones;
  
• Low fees — for example, a transfer of 1000 € to USD usually costs about 5–7 €;
  
• Fast transfers — often same-day delivery to the recipient’s card or account;
  
• Global account details — you can receive IBAN, routing numbers from the US, UK, Australia, etc.;
  
• Integration with MBWay and Portuguese banks — you can send and receive payments between a Portuguese account and Wise.
  

You can use Wise to:

• Receive USD to Wise USD account;
  
• Convert EUR to other currencies at interbank rates;
  
• Transfer money from a Portuguese bank account to Wise or vice versa.

Comparison: Wise vs Bank Transfers (SEPA / SWIFT)

Conclusion:

If you regularly receive or send money in non-euro currencies (USD, GBP, CAD, CHF, etc.) — Wise is more convenient and faster. For euro transfers within Europe, SEPA via a Portuguese bank account (often free) is usually the most convenient.

How to Integrate Wise with a Portuguese Bank

Linking accounts

• You can add your Portuguese bank’s IBAN in Wise as a “recipient”.
  
• After that, you can easily transfer money from Millennium, Santander, Moey! and others.
  
• Reverse transfers (from Wise to a bank) are also possible, but may require verification in the online bank.
  

Using Wise cards

• Wise cards can be connected to Apple Pay, Google Pay.
  
• They work for online and offline purchases, including abroad.
  
• When paying in a currency different from the account’s, Wise automatically converts it using interbank rates.

Other Popular Payment Services

Revolut

• Provides IBAN from Lithuania.
  
• Suitable for international operations.
  
• Not always accepted in Portugal as an “official” bank account.
  
• Can be used as an additional account or for travel.
  

N26

• German online bank, similar to Revolut.
  
• Does not provide PT-IBAN.
  
• Convenient if you live in several EU countries.
  

PayPal

• Works in Portugal but is often used only for online purchases and business.
  
• High fees for withdrawals and conversions.
  
• Not suitable as a main bank account.
  

Western Union / MoneyGram

• For cash transfers in emergency cases.
  
• High fees and weak integration with digital systems.
  

If you want to use the most optimal financial setup, it’s best to have:

1. Portuguese account with a local bank — for taxes, rent, salary, MBWay.
   
2. Wise — for international transfers, receiving payments from abroad, payments in foreign currencies.
   
3. Optionally, Revolut or N26 — also useful while traveling or for freelance payments.

Tips on Choosing a Bank and Optimizing Your Finances

Opening an account in Portugal is just the first step. The real work begins afterward: choosing a suitable bank for your specific goals, optimizing payments, avoiding unnecessary fees, and ensuring reliable access to essential services.

This section includes advice on choosing a bank and examples based on the real experiences of Move to Cascais clients and dozens of expats who moved to Portugal.

How to Choose a Bank Based on Your Goals

If you are moving and planning to live in Portugal permanently:

• Choose a reliable universal bank with English-language support:
  → (Millennium BCP, Santander, ActivoBank)
  
• Open a checking account (conta à ordem) and connect MBWay for daily payments.
  
• Make sure the bank provides recibos and AIMA documentation.
  
• Consider opening a savings account (conta poupança) — even if it’s not your first priority, such an account boosts your financial credibility.
  

If you’re a digital nomad, freelancer or coming on a D8 visa:

• Combine Wise + ActivoBank:
  
  • Wise — for receiving income and salary payments abroad.
    
  • ActivoBank — for daily payments in Portugal, issuing NIB, MBWay, etc.
    
• Register your residence and provide a supporting address: e.g. proof from Junta de Freguesia.
  

If you’re buying property or applying for a mortgage:

• Work with Millennium BCP, BPI, Santander, or Novo Banco.
  
• These banks issue mortgages to foreigners (with a minimum down payment of 30%).
  
• Prepare in advance and make sure the bank accepts financial documents for AIMA.
  
• Evaluate commissions on appraisal, processing, and insurance.

If you are a student or retiree:

• Options: Caixa Geral de Depósitos, ActivoBank, Moey!
  
• Learn about the benefits and lower fees.
  
• Use Wise or Revolut for family transfers.
  

How to Minimize Fees and Losses on Currency Exchange

• Use multi-currency platforms (Wise / Revolut) — Exchange money at the real exchange rate
  — Transfer to Portugal in EUR via SEPA transfers
  — Do not withdraw foreign currency from debit cards at ATMs — it’s costly
  
• Choose banks with free services (ActivoBank, Moey!) — Even if you have a small amount of funds, it’s better to keep the whole sum in one place, where you won’t be charged for account maintenance
  
• Connect MBWay — A widely used mobile payment system in Portugal — convenient and free
  
  — Pay in restaurants, shops, and online — using QR-code or phone number
  
• Use automatic debits (Débito Direto) — Convenient for paying utilities, internet, rent — no late fees or manual transfers
  
• Avoid high SWIFT fees — International transfers can cost from €25 with SWIFT — even on a regular transfer!
  
  — In such cases, use Wise or Revolut instead
  

Real Cases

Case 1. Freelancer without a residence permit (BНЖ)

Martin — UX designer, lives in Portugal on a Digital Nomad visa. He does not have a residence permit:

• Received payments via Wise in USD and EUR
  
• Linked Wise to ActivoBank — made SEPA transfers to his Portuguese IBAN
  
• Used ActivoBank to connect MBWay and receive rent receipts (recibos)
  
• Paid rent and utility bills with the card — no problems with Portuguese landlords — no commissions

Case 2. Family with children

A family from Ukraine opened an account with Millennium to receive child benefits, pay rent, and register residency. After opening:

• Connected Débito Direto to pay rent
  
• Used a savings account (Conta poupança) for savings
  
• The bank account helped them obtain a certificate from AIMA confirming available funds
  

Case 3. Investor without residency

Alexey from Kazakhstan bought an apartment in the Algarve. The Bank Santander opened an account for him without residency, based on:

• Passport, NIF, purchase agreement, income certificate from abroad
  
• Money for the purchase and repairs was transferred through Wise — in euros, without conversion losses
  

Assistance with Opening a Bank Account from Move to Cascais

Opening a bank account in Portugal can be a challenging task — especially if you don’t yet have a local address, a residence permit (BНЖ), proof of income, or speak Portuguese. Many people face difficulties: rejection by banks, lack of information, uncertainty in documentation, or bureaucratic delays. That’s why the Move to Cascais team has created a support service — “Opening a Bank Account in Portugal”.

What’s included:

• Consultation and selection of a suitable bank based on your goal and status (resident/non-resident, student, investor, etc.)
  
• Preparation of necessary documents:
  
  • Communication with the bank, coordination of documents, and remote account opening
    
  • Appointment for in-person or online verification
    
  • Accompaniment when visiting the bank (for those already in Portugal)
    
  • Support in registration with AIMA or tax authorities if needed

Who can benefit from this especially:

• Foreigners without a Portuguese residence permit (residency)
  
• New residents who have only recently obtained a NIF
  
• Students, pensioners, freelancers without an employment contract
  
• Owners of non-residential visas — investors, self-employed individuals, entrepreneurs
  
• Anyone who values saving time and avoiding stress in dealing with Portuguese banks
  

Why clients choose Move to Cascais:

• More than 500 successfully opened bank accounts since 2021
  
• Knowledge of actual bank requirements and current practices
  
• Experience in supporting clients when applying for residence permits, Golden Visa, and other legal statuses
  
• The entire process takes place remotely, without the need to physically visit a bank branch — with pre-approved conditions
  

For more information about the service, request here: Opening a Bank Account in Portugal

Conclusion: Key Takeaways and Outlook

Portugal’s banking system in 2025 offers foreigners everything they need for comfortable living, working, and investing. And opening a bank account and obtaining a residence permit — provided you know what to expect, when to act, and which documents are required — becomes a manageable task.

Key Takeaways:

• Without a Portuguese bank account, it is impossible to fully live in the country: it is needed for rent, contracts, taxes, SEF, insurance, and subscriptions to services.
  
• Choose a bank based on your goals: for living — Millennium or ActivoBank, for investments — BPI or Santander, for transfers — Wise + local account.
  
• Optimize commissions: use SEPA, MBWay, Wise, and Débito Direto.
  
• Prepare documents in advance: NIF, proof of address, and income statements.
  
• Use professional assistance to avoid losing time, nerves, and money.
  

What Lies Ahead

Portuguese banks continue to move toward digitalization: service quality improves, international payments become easier, and many banks already support full online banking.

However, for foreigners, it is still extremely important to understand the specifics and nuances of the local system.

This is where confidence comes from — if you have reliable and experienced partners. The Move to Cascais team is ready to be on your side.