Personal finance
The banks offer payment services and provide loans for various purposes.
Banking
There are four banks in the Faroe Islands:
FØROYA BANKI BETRI BANKI
NORÐOYA SPARIKASSI SUÐUROYAR SPARIKASSI
All employees in the Faroe Islands need a Faroese bank account in order to receive their salary.
A Faroese ID-number is required to open a bank account. The bank will also need a copy of a legitimate identity document, e.g. passport or an EU driving licence, to open an account.
Bank deposits in Faroese banks up to DKK 750,000 per person are guaranteed through a deposit guarantee fund.
The banks offer debit and credit cards for withdrawal at cashpoints and making purchases.
New customers normally receive a debit card which only allows the owner to withdraw the amount available on the account.
If the bank assesses the financial standing of the customer to be satisfactory he or she may be offered a credit card which allows purchases and cash withdrawals higher than the deposit. An interest will be charged for such amounts.
All banks offer personal online banking service enabling the customer to transfer money and pay bills within the Danish Realm without paying service fees.
Online banking is the easiest and cheapest way to transfer money, but it is also possible to ask the banks to pay bills or transfer money. In this case a service fee will be charged.
The best way to transfer money between the Faroe Islands and countries outside the Danish Realm is by using SWIFT/BIC which is an international online system for direct account-to-account transfer. A fee is charged for SWIFT transfers.
The banks offer mortgage loans for buying real estate property and loans for other purposes, e.g. for purchasing a car. The bank will make an assessment of the financial standing of the customer before granting a loan.