Neobanks vs. traditional banks in Spain: Revolut, N26, and other options for expats

When you arrive in Spain as an expat, digital nomad, or professional relocating for work, one of the first practical decisions you need to make is where to open a bank account. More and more people are asking what a neobank is and whether it offers a better option than a traditional bank, especially when comparing providers such as Revolut and N26.

The answer isn't the same for everyone. It depends on whether you plan to live in Spain long-term, whether you need to receive your salary into a Spanish bank account, or whether you're simply looking for an easy way to manage your everyday finances while living between countries.

In this article, we explain the differences between neobanks and traditional banks, their advantages and disadvantages, and how Revolut and N26 compare in the areas that matter most to expats.

Table of Contents

1. What is a neobank?
2. Neobanks vs. traditional banks: key differences
3. Advantages of opening a neobank account
4. Disadvantages and limitations of neobanks
5. Revolut vs. N26: a direct comparison for expats
6. When should you combine both types of bank accounts?
7. Frequently asked questions about neobanks and traditional banks

What Is a Neobank?

A neobank is a financial institution that provides its services mainly through mobile apps and online platforms, without relying on a network of physical branches. Unlike traditional banks, its infrastructure is designed to be 100% digital, making it easier to open accounts quickly, access competitive fees, and manage finances through a simple user interface.

Some of the best-known neobanks and digital financial services in Spain include:

1. Revolut
2. N26
3. Wise (although technically it operates as a payment institution rather than a bank)
4. Bunq

Most of these services allow you to open an account using your smartphone in just a few minutes, although the required documentation depends on the provider, your country of residence, and identity verification requirements.

It's important to distinguish between neobanks with banking licences, such as Revolut and N26, and digital payment platforms, such as Wise, because customer funds are protected differently.

Neobanks vs. Traditional Banks: Key Differences

Although both types of institutions may offer a bank account, payment card, and IBAN, there are several important differences for people who have recently moved to Spain.

Opening an Account

1. Neobank: Allows you to open an account online, usually with a valid identity document and digital verification. Additional documentation may be required in some cases.
2. Traditional bank: May offer online or in-person account opening, depending on the institution. Some banks require an NIE (Foreigner Identification Number), proof of address, tax information, or documentation confirming your employment or economic activity.

IBAN and Direct Debits

1. N26 provides a Spanish IBAN (ES) to customers who open an account in Spain, allowing them to receive salaries, set up direct debits, and make domestic bank transfers.
2. Revolut also provides a Spanish IBAN (ES) to new customers opening an account in Spain. Some existing customers may still have an IBAN from another European country.

Both options support everyday banking transactions in Spain. Furthermore, under SEPA regulations, a direct debit cannot be refused solely because the IBAN belongs to another EU member state, provided the transaction meets the applicable requirements.

Customer Support

1. Traditional banks generally provide in-person customer service, which can be particularly useful when dealing with complex financial matters such as mortgages or financing.
2. Neobanks mainly offer digital customer support through chat, mobile apps, and other remote channels, with availability depending on the provider and account plan.

Advantages of Opening a Neobank Account

For digital nomads and internationally mobile professionals, neobanks can be particularly convenient for several reasons:

1. Online account opening, without the need to visit a bank branch.
2. Low or no account maintenance fees on certain plans.
3. Competitive currency exchange rates, especially useful if you receive income in another currency.
4. Full control through the app: freeze cards, set spending limits, and receive real-time notifications.
5. Multi-currency management, a practical advantage for people working with international clients.

However, currency exchange conditions vary depending on the provider, transaction amount, day of the week, and account plan.

This flexibility is one of the reasons why many people living in shared apartments in Barcelona or private apartments consider a neobank as their first banking option when moving to Spain.

Disadvantages and Limitations of Neobanks

Despite their advantages, neobanks also have certain limitations worth considering before opening an account:

1. More limited access to financing products at certain providers, particularly mortgages and personal loans.
2. Potential security-related account freezes when transactions require additional verification.
3. Lack of physical branches, which can make certain procedures requiring personal assistance more difficult.
4. Cash withdrawal limits and potential fees depending on the account plan.

It's also important to check what type of licence each provider holds and how it protects customer funds.

Revolut and N26 both hold European banking licences, and eligible deposits are protected up to €100,000 per depositor under the applicable deposit guarantee schemes. By contrast, platforms such as Wise use safeguarding arrangements that differ from traditional bank deposit guarantee schemes.

If your plans in Spain include medium-term goals such as buying property or applying for financing, it may be worth complementing your neobank account with an account at a traditional bank.

Revolut vs. N26: A Direct Comparison for Expats

One of the most common questions among people moving to Spain is Revolut or N26? Both institutions offer digital banking services, although their features and conditions differ.

Fees

1. Revolut: Offers a free plan with currency exchange features and certain monthly limits. Fees may apply when exceeding those limits or making exchanges during weekends.
2. N26: Provides a free account designed for everyday euro banking, alongside paid plans with additional services.

In both cases, it's worth checking the latest terms and conditions before signing up, especially if you frequently make international transfers or withdraw cash.

IBAN

1. N26: Provides a Spanish IBAN (ES) to customers who open their account in Spain. This makes it easy to receive salaries, set up direct debits, and manage recurring payments.
2. Revolut: Also offers a Spanish IBAN (ES) to new customers in Spain, allowing them to use their accounts for domestic banking transactions.

Therefore, the IBAN is no longer a significant difference between these providers for most new customers living in Spain.

Customer Support

1. N26: Provides digital customer support, primarily through its mobile app, with additional options depending on the account type.
2. Revolut: Offers in-app assistance and different levels of customer support depending on the subscription plan.

Customer experiences may vary depending on the issue, so it's worth reviewing the available support channels before choosing a provider.

Additional Features

1. Revolut: Stands out for its international focus and integrated currency exchange, investment tools, and other financial services. Some features are subject to specific conditions.
2. N26: Focuses on everyday banking, offering savings tools, spending controls, and additional financial products depending on the market and account type.

In practice, many expats use both accounts together: one for international expenses and another for everyday banking transactions.

When Should You Combine Both Types of Bank Accounts?

A common option among international residents in Spain is to have a neobank account for everyday spending and a traditional bank account for specific financial needs.

This combination can be particularly useful if:

1. You need access to products such as mortgages or personal financing.
2. You prefer having in-person customer support for certain banking procedures.
3. You want to separate your everyday spending from your savings or maintain a backup bank account.

However, you do not need an account with a traditional bank to receive your salary or pay rent in Spain. Both Revolut and N26 provide accounts with Spanish IBANs that support these transactions.

If you're planning to move to Spain, choosing a bank account is just one of the first steps. It's also important to understand the administrative requirements, accommodation options, and other practical aspects of your new life abroad. For more information, take a look at our guide for expats moving to Spain.

Frequently Asked Questions About Neobanks and Traditional Banks

What Exactly Is a Neobank?

A neobank is a digital financial institution that provides its services mainly through mobile apps and online platforms, without relying on physical branches. Some neobanks hold full banking licences, while others operate under different types of financial authorisation.

Is It Safe to Use a Neobank as Your Main Bank Account in Spain?

Yes, provided you choose a regulated institution and understand how your money is protected. Revolut and N26 both hold European banking licences, and eligible deposits are protected up to €100,000 per depositor under the applicable deposit guarantee schemes.

However, not all digital financial services operate as banks. Platforms such as Wise use safeguarding arrangements to protect customer funds, which do not provide the same protection as a bank deposit guarantee scheme.

Can I Pay My Rent by Direct Debit Using Revolut or N26?

Yes. Revolut and N26 offer Spanish IBANs to new customers opening accounts in Spain, allowing them to set up rent payments and other regular direct debits.

Additionally, European regulations prohibit rejecting a SEPA direct debit solely because the IBAN belongs to another EU member state.

Do I Need an NIE to Open a Neobank Account?

Not always, but it depends on the provider and your personal circumstances. Some services allow you to start the account opening process with a passport or another valid identity document. However, they may request additional documentation, such as tax information or a foreigner identification number.

It's therefore advisable to check each bank's requirements before starting the process.

Which Option Is Better for a Digital Nomad Who Frequently Moves Between Countries?

Neobanks can be particularly convenient for people who travel or change their country of residence frequently, thanks to remote account management and currency exchange tools.

However, it's important to check fees, supported countries, and any conditions that may apply if you change your tax residence.

Are Traditional Banks Still Necessary in Spain?

Traditional banks are not essential for everyday banking activities such as receiving a salary, making card payments, or setting up direct debits.

However, they can be useful for people who need financing, in-person financial advice, or specific banking products that may not be available through every neobank.