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How to switch to a minimum bank account and save €80 per year

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I made a very simple post yesterday on facebook saying that I was going to change my account to a minimum bank account to save 80 euros per year. And I promised to tell you how it went later. But I didn’t expect such a quick and broad reaction: nearly 200,000 views in less than 24 hours and nearly 500 comments. This is because in fact the subject interests a lot of people. So I’ll tell you how it went.

Let’s start at the end. Instead of €80.80 per year, my loved one paid nothing. Better than I expected, as I expected to pay around 5 euros per year instead of 5 euros per month. Let’s get to the details.

What is a minimum bank service account

I have been in this alert “war” on the Minimum Service Bank Accounts (CSMB) alternative since around 2016. All banks in Portugal are required to have this type of accounts in which you only pay 5 euros per year (or 35 centimes per year.month) or nothing, if you earn less than the national minimum wage. The only condition is that you can only have this current account in Portugal.

You have in this article HERE the answers to the questions that I am most often asked.

On Facebook, I’ve been amazed at how many people have never heard of these accounts. Glad to have posted this photo. I assume that this information is still useful for many thousands of banking customers in Portugal. If 10,000 people join the CSMB because of these articles, we are talking about a saving that is in your pocket of around 1 million euros.

My first experience with a Minimum Banking Services account

When I posted the photo, a lot of people were immediately surprised. “How can Pedro Andersson, who has accounts in 10 different banks, apply for a CSMB?! “. I didn’t say I was going to switch my account to CSMB, but I was going to handle that process. To be clear, I am part of the account of a family member who only has this current account in Portugal and, according to the law, if this person is over 65 or 60% or more disabled, he can have other co-holders of the account without problem.

This situation applies perfectly to parents or grandparents who only have this bank account and want their children or a grandchild to be in the account as well to help them in times of need. This was the case. It’s not about being a mover, it’s even about co-ownership. Do not enter into conversations.

Another tragedy is that the banks say that this request must be made in person with all the people concerned. Another way to avoid this is easy to do.

What if the elderly or sick cannot leave the house?

Banco de Portugal replied that all legal mechanisms of representation can be used, such as a power of attorney for example. It’s more complicated but it’s not a 7-headed bug if you really want to do this process. A power of attorney should be cheaper than 80 euros every year of your life and always increasing.

I arrived at the bank, accompanied by a member of my family, I took out the password and we waited for almost an hour. We are talking about August in a country town. When they called us, I simply explained that I wanted to upgrade a family member’s account to SCMB. In one sentence, I explained that she only had one bank account and since she was over 65, I wanted to continue being part of the account. Only that.

Please, don’t go to the bank and ask if you can have a minimum bank service account. That you must already know whether you can or not. You don’t go there and ask for the bank’s authorization to make the transfer, okay? You go there to exercise your right under the law. It’s completely different.

The bank clerk who took care of us went to see his account and after much research he said that this option was not appearing to my family member so I could not change his account to CSMB. And since he couldn’t do anything, he had to make an information request to Central Services to understand why the option was not appearing. The response would take a maximum of 48 hours. Well, I didn’t have time to wait because I had to go back to Lisbon.

I kindly told him not to leave without requesting a change of account. Then they could understand each other, but I demanded to place the order and keep the record of the order. To which the gentleman replied that the request had been made electronically in their software and that was not possible as there had to be a situation that prevented this option for my family member.

On the cell phone,I went to the bank account database of the Bank of Portugal and generated the PDF that proved that my mother only had this account in Portugal (see HERE how to do it) and that therefore NOTHING prevented him from making the request.

And as for me wanting to stay on the account, I showed her her citizenship card, proving she was over 65. You agreed that in fact there was no impediment, but there was the computer problem.

I reminded you that CGD has (it had when I did the report on the subject) pdf forms to make the request manually. The gentleman’s response was “Ah! I understand that you are aware of the matter…”.

There he went looking and finally found the form which he filled in by hand with the account details and a member of my family signed it and so did I. The form is used to request the CSMB and not the documents themselves to formalize the change. So I delivered the order and the banker said that in the next 48 hours the bank would respond.

I left with a sense of accomplishment, even though my goal was to finally settle the case that morning.

In the afternoon, the bank employee called me to tell me that the application had been approved and that it was now time to return to the bank and sign the final documents. Fortunately, I was still packing my bags before returning to Lisbon. We took the car and drove back. Was quick. Sign 3 times on the document that was given to us and next month you will no longer pay the €5.15 account maintenance fee.

Why don’t you pay anything, not even the 5 euros a year?

It turns out that the CGD fee schedule indicates that Minimum Banking Service Accounts are exempt up to €5 per year (or 35 centimes/month) if the person has a pension or a salary below the national minimum wage. It’s the case.

So, because we made a mistake, my relative, instead of paying €80.80 (€5.15 x 12 months + €19 pension for the ATM card) will pay zero. That is to say the same as before the end of the Caixa Geral de Depósitos exemption which started in April 2022.

So my advice is to very carefully assess whether you are paying bank fees unnecessarily. If you only have one bank account – even if you have a home loan – go to your bank and ask for the minimum bank service account. If for some reason you regret it, just come back there and say you want the old account and pay the commissions again. The IBAN does not change and you do not have to change your bank card either. It remained the same in the case of a member of my family.

Check the bank statements of your parents or grandparents and calculate the amount of commissions they pay unnecessarily. 80 euros is two pharmacy bills or 160 liters of milk or two months of electricity or 3 months of water.

Don’t go over songs from your bank. If you meet the requirements, you have the right to apply for this type of account. All banks are required by law to make the switch. But if you don’t go there to ask, they won’t be the ones to warn you that you risk paying almost nothing for opening your account there.

(Again) there are free banks

The other alternative is to close this account and open one in a totally free bank like Activobank or Moey. But I know that seniors are especially reluctant to open accounts in banks they don’t know and which are very “digital”. I respect that.

See which option is best for you. Don’t waste money unnecessarily.


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