Practical guidance in navigating bank accounts in Poland

Do you have a bank account? Very likely, yes. Even if you are new in Poland, opening one is usually hassle-free as long as you have a passport and a PESEL number. Sometimes, the PESEL number is not even mandatory. If going to a bank branch, the account can usually be opened within one hour or less, and you will get the account information on the spot, whereas the card will usually be mailed to you in a couple of days. Alternatively, it can also be possible to open an account online with the verification by an active mObywatel application and have the card delivered.

How many bank accounts do you have? One or two, I guess.

For many students and young professionals, having a bank account is natural and indispensable.  The common functions to use with the account opened may include paying for daily expenses, making transfers, and receiving payments from a third party. Some may have already unlocked more advanced functions like getting a credit card, applying for mortgages or maybe even making savings plans and so on. Yet this article series aims to walk you through from the basics to more complicated topics that are useful in our daily lives, maybe not now but absolutely in the future.

Before getting started, it is worth noticing the difference between a commercial bank and an investment bank. They have different primary functions and target different types of clients for main sources of revenue. Moreover, they are exposed to different types of risks and, therefore, are also subject to different types of regulations (See Appendix 1 for more details). If there is anything you need to have in mind as a non-finance person, it is that a commercial bank takes deposits while an investment bank does not. What we are discussing here is all about the functionalities of a commercial bank that provides personal finance services.

Chapter I How to select a bank and an account that suit

Many commercial banks provide services to individuals and help with managing personal finances. The most common ones with physical branches are PKO Bank Polski, mBank, ING Bank Śląski, Bank Millennium, Santander Bank Polska, Citi Handlowy, Alior Bank, etc. Meanwhile, with the development of digital technologies, virtual banks without physical branches like Revolut are also becoming popular.

The list is, of course, not exhaustive, and there can always be some newly emerged personal finance service providers that have not been broadly heard of yet. In practice, we usually consider the following factors when deciding whether to open one’s first account with a bank:

1.     The convenience of the account opening process

2.     The availability of branches and services

3.     The fees

4.     Account security and fraud protection

5.     The personal purpose of use for this account

6.     The service languages if you are a foreigner

7.     Potential discounts and offers available

8.     The website and App design of the bank

I am not sure in what order you would consider the above-listed factors or whether you would have more ideas.  When I opened my first bank account in Poland, I just went to PKO Bank Polski, simply for the sake of convenience, as there happened to be a PKO branch nearby, and this bank is reputable enough to make me feel reliable. However, now that I am reflecting on this matter, what I can recommend thinking about as a priority is the fourth point, account security and fraud protection, especially when you plan to use this account to receive, transfer or deposit a large amount of money.

After 2008, “financial crisis” is no strange word to anyone. Just last year, we heard again some banks were in trouble, such as Silicon Valley Bank (SVB) and Credit Suisse. Although these organizations did not directly get involved in our lives, each time something went wrong, it could shake our confidence in the current financial system.  Trust is fragile nowadays and there should be a question to ask when you deposit money in a bank: what if the bank fails? For the big, reputable market players like PKO Bank Polski, most people do not believe it will fail so there is confidence. That is also why large, reputable domestic banks can be the easiest choice if one would not like to think too hard about opening a bank account. However, the question becomes tricky when the less-known newcomers in the industry offer more attractive T&Cs.

In fact, to maintain financial stability and confidence, countries around the offer insurance for deposits up to a certain amount. The table below summarizes the currency unit, and the amount protected in major economies in the world (See Appendix 2 for more details).

In Poland, deposit insurance is managed by the Bank Guarantee Fund (Bankowy Fundusz Gwarancyjny, or BFG). Since Poland is within the EU, despite it is not a member state of the Euro Zone, the total amount protected is still €100,000 per depositor, per bank. So if you were to deposit money in a bank, as long as the total amount is below  €100,000, a bank failure of a small scale is covered. However, if the total amount is above  €100,000, it is wiser to open a separate account and deposit it in a different bank.

With this idea in mind, it is also necessary to identify whether the institution that is taking your money can be regarded as “a bank”, so the money in the account is under the insurance scheme. Sometimes, we may temporarily transfer some money to a certain account and leave it there for future use, e.g. the credits we have in our mobile account, Shein Wallet, Allegro Wallet, etc. For sure, we know these organizations are not banks thus the money is not insured. But what about electronic monetary institutions (EMI) like Wise? You can open an account in the very same way you may open an account online with other virtual banks. You can transfer money into this account, convert the money into other currencies, and even transfer it out… Nevertheless, the money in your Wise account is not protected, and this institution does not have a bank license. In contrast, Revolut does have a bank license obtained in Lithuania that allows it to take deposits across the EU and such deposits are protected by the insurance scheme. Additionally, in the case of the UK, Revolut did take deposits before it obtained its license with the British authority in August 2024 and such regulatory confusion was mostly due to Brexit.  As you can see, the situation can become a lot more confusing sometimes, especially with the emergence and development of new services and institutions in the financial industry powered by technology and digitalization, whereas regulatory actions are lagging. Therefore, whenever considering opening an account with some organization and transferring money into it, it is worth double-checking whether it has a bank license and the account is protected by the national insurance scheme, and to what amount the deposit can be insured.

After figuring out the critical security issue in the first step, opening a bank account is mostly an economic choice, i.e., it is necessary to figure out what you can get and what you need to pay.

Let’s start with the payment issue. I used to live in China, the UK, France and now I’m finally settled in Poland. The interesting facts about accounts in these countries are that in China and the UK, almost all normal accounts are free to open and use. So is the debit card that comes with this account. Some virtual British banks like Monzo may charge a fee for the second card delivery but most other banks issue as many cards as you want free of charge. Moreover, in China, the five biggest banks are all state-owned and they also open accounts and issue debit cards for free. However, when I lived in France, I always had to pay a monthly fee of EUR 4.99 for my French bank account and debit card with BNP Paribas. So I finally decided to close this account when I left France in 2019 and did not plan to return any time soon. When I came to Poland and tried to open a Polish bank account, the T&Cs about fees were surprisingly complicated, at least to me. For popular banks like Bank Polski, their accounts can be free to use but the debit cards come with a monthly fee of 10 PLN. For Santander Polska, a standard account charges 6 PLN for the account and 9 PLN for the account. However, it is possible to get the fees waived under certain conditions. For Bank Polski, it is making five payments with the debit card or BLIK at whatever amount, whereas for Santander Polska, one has to spend at least 300 PLN each month by either card or BLIK for a standard Santander account.

For the sake of comparison, I searched the websites of the major banks in Poland mentioned above and found fee information about their standard accounts, which do not have age or identity restrictions and do not provide premium services. In summary, if you want an account and a card completely free of charge, with no additional conditions attached, Konto CitiKonto at Citi Handlowy is the one suitable for you.

In addition, almost all these banks offer special accounts for young people above 18 yet under 26 years old and the fee conditions are more friendly. Sometimes they also come with some more attractive features. So if you are eligible, it is always worth checking before opting for the standard accounts. For instance, Santander Bank Polska provides accounts that are specially for students under 26.  The account fee is 0 PLN and as long as you make one payment by card or BLIK, the card is free, too.  This account also comes with various benefits like additional refunds for bills, free currency conversion for cash withdrawals, and unlimited free international transfers to countries where Santander operates. Furthermore, for people above 26 years old and professionals with higher incomes and more advanced needs, each bank also offers different types of premium accounts that come with special features like personal advisors and bill refunds at 1% or more.

If you travel a lot or come from a foreign country, you need to deal with multiple currencies like me, it is also worth checking whether opening an account in a different currency is free. As far as I know, the standard accounts of both Bank Polski and Citi Handlowy come with a muti-currency feature and it does not incur additional charges. Yet for other banks, you need to pay a fee for having such accounts. If you need to make payments internationally, travel or work abroad, banks like Santander, Millennium, Alior, etc. offer the “Currency Account”  option. More conveniently, I recommend Revolut if you need to exchange foreign currencies and make international transfers. I used it to convert GBP into PLN and transfer the money from the UK to Poland. The exchange rate was much better and the commission fee for international transfers was also much more affordable.

What is more, I have to say bank accounts in the UK were simpler to open and use because many common functions like making transfers or payments are always free of charge at whatever time. Unless you specify the exact arrival time or there is technical maintenance, the funds transferring from one local account to another always arrive immediately, with no extra costs. However, it is not always such a case for bank accounts in Poland. Different banks have different policies and timing, and express interbank transfers may incur additional service charges. For example, if I make a transfer from my account with Bank Polski to my friend’s account with Bank Millennium, before 2 pm ( if I remember correctly about what the customer service told me), a standard transfer should arrive on the same day. But after that, it will be delayed to the next working day. Otherwise, I have to pay extra to make the transfer arrive immediately. So you should always keep an extra eye on the T&Cs for the account you are opening, especially when you have such needs very often in an urgent way. Usually, a premium account with a fixed monthly fee can offer such options.

Besides, in the UK, there are many free cash withdrawal machines, and they work regardless of from which British bank you opened the account and obtained the card. Each bank also offers free cash deposits for as many times as you want in a month. Banks with physical branches do not usually put limits on the amount of free cash deposits, but for virtual bank accounts like Monzo or Starling, you need to pay a fee sometimes. For Monzo, the fee always exists, while for Starling, the free amount in a year is 1000 GBP in total. But in Poland, cash withdrawals or deposits may incur a fee. For Bank Polski, you can deposit cash at a branch once a month for free and whether money withdrawal is free depends on the account type and withdrawal method. BLIK is something special to Poland, and it seems to provide a cheaper, more convenient solution to many daily needs. 

All in all, when opening an account, it is necessary to pay attention to the fee structure and conditions attached to the particular account to make sure the functions provided can satisfy your needs and also avoid having features you do not need but being charged without knowing. 

Apart from the fee conditions, most banks also have offers and promotions for opening certain types of accounts with them. Usually, the promotion is in the form of cashback when you meet certain conditions like making certain amounts of deposits at certain times and stages. Some accounts may also offer higher interest rates within a certain period. Meanwhile, to attract more customers, they also create referral schemes, and it also allows you to earn cashback. The table below provides a glance at the main cashback promotions offered by each major bank and their referral schemes if there is any.

In general, each bank offers different types of promotions from time to time and you can check all of them on their websites under the “Promotions” section. To check what types of accounts each bank offers, you can go to the “Personal banking” or similar columns and find the “Account” section. The information contained in this article may expire later as the banks may terminate offering certain types of accounts or promotions and replace them with new ones, but it is always possible to find the most up-to-date information following the instructions.  When I was in the UK, I opened more than five bank accounts for taking advantage of different offers and each account and card had different functions and purposes to me. In Poland, perhaps because there are more banks and more offers available, sometimes it can be a bit tricky when faced with too much information and choices. Anyway, it is highly recommended to develop the habit of checking offers and promotions from the bank with which you have accounts so that you can maximize the value added.

At last, if you are unhappy with the current banking services, it is also possible to transfer from one bank to another. Or perhaps just open a new account with another bank to take advantage of the promotions as a new customer.  You may close the old account if you want to avoid service fees being charged monthly.

Appendix 1

Commercial banks and investment banks serve different functions within the financial system, each catering to distinct clientele and services. Here are the key differences between the two:

1. Primary Functions

 Commercial Banks:

 • Focus on accepting deposits and providing loans to individuals and businesses.

 • They offer services like checking and savings accounts, mortgages, personal loans, and business loans.

 • They also provide payment processing services and may offer credit and debit cards.

Investment Banks:

 • Specialize in raising capital for companies, governments, and other entities through underwriting and issuing securities.

 • They facilitate mergers and acquisitions (M&A), provide advisory services, and assist with asset management.

 • Investment banks also engage in trading and market-making activities.

2. Clients

  Commercial Banks:

 • Serve a wide range of customers, including individuals, small businesses, and larger corporations.

 • They focus on retail banking services and relationships.

Investment Banks:

 • Primarily cater to corporations, institutional investors, governments, and high-net-worth individuals.

 • Their services are more specialized and often require significant financial expertise.

 3. Revenue Sources

 Commercial Banks:

 • Generate revenue primarily through interest earned on loans and fees for services such as account maintenance and ATM usage.

 • They aim for stable income through interest rate spreads (the difference between interest paid on deposits and interest earned on loans).

Investment Banks:

 • Earn revenue through fees for advisory services, underwriting, trading commissions, and profits from proprietary trading.

 • Their income can be more volatile, depending on market conditions and deal flow.

4. Regulatory Environment

 Commercial Banks:

 • Subject to strict regulations concerning capital requirements, lending practices, and consumer protection to ensure stability and protect depositors.

 • They are typically insured by government entities (e.g., FDIC in the U.S.) to safeguard deposits.

Investment Banks:

 • Regulated differently, with a focus on securities laws and market integrity.

 • While they are also subject to regulations, the emphasis is more on preventing market manipulation and ensuring fair trading practices.

5. Risk Profile

 Commercial Banks:

 • Generally have a lower risk profile, as their primary business involves traditional lending and deposit-taking.

 • Their risks are associated with credit risk (the possibility that borrowers will default) and interest rate risk.

Investment Banks:

 • Often have a higher risk profile due to their involvement in capital markets, trading, and advisory services.

 • They face market risk, operational risk, and reputational risk, especially during volatile market conditions.

Summary

In summary, commercial banks primarily focus on deposit and loan services for individuals and businesses, while investment banks specialize in capital markets, underwriting, and advisory services for corporations and institutional clients. Understanding these differences is crucial for navigating the financial landscape and choosing the right type of banking services.

Appendix 2

Deposit Insurance Schemes (DIS) are designed to protect depositors in case a bank fails, providing a safety net for individuals and businesses by insuring deposits up to a certain limit. These schemes vary globally in terms of coverage, limits, funding mechanisms, and administration. Here’s an overview of some major deposit insurance schemes around the world and how they operate:

1. United States - Federal Deposit Insurance Corporation (FDIC)

 • Coverage: Covers all depositors in FDIC-insured banks.

 • Limit: $250,000 per depositor, per insured bank, per account category (e.g., individual, joint accounts).

 • Funding: Funded through insurance premiums paid by member banks, based on the size and risk profile of each bank.

 • Administration: The FDIC is an independent federal agency that oversees the scheme, established after the Great Depression in 1933.

 • Special Features: The FDIC actively supervises banks to reduce risk and works to resolve failed banks swiftly to minimize impact on the financial system.

2. European Union - Deposit Guarantee Schemes (DGS)

 • Coverage: Each EU country has its own scheme; all schemes provide the same minimum protection level across the EU.

 • Limit: €100,000 per depositor, per bank.

 • Funding: Funded by participating banks within each country, with contributions based on a risk-based approach.

 • Administration: Each EU member state manages its own scheme, and the European Banking Authority (EBA) provides oversight and regulations to ensure consistency.

 • Special Features: The EU has harmonized deposit insurance across member states, making it uniform in coverage. Cross-border cooperation is also mandated to protect depositors with accounts in different EU countries.

3. United Kingdom - Financial Services Compensation Scheme (FSCS)

 • Coverage: Covers deposits at banks, building societies, and credit unions regulated by the UK’s Prudential Regulation Authority (PRA).

 • Limit: £85,000 per person, per institution, with joint accounts protected up to £170,000.

 • Funding: Funded by a levy on financial services firms, adjusted annually.

 • Administration: The FSCS operates independently but is overseen by the Financial Conduct Authority (FCA) and the PRA.

 • Special Features: In addition to deposits, the FSCS covers investments, insurance, and mortgage advice, offering broader financial protection.

4. Canada - Canada Deposit Insurance Corporation (CDIC)

 • Coverage: Covers eligible deposits at CDIC member institutions, including savings and chequing accounts, term deposits (e.g., GICs) up to five years, and certain retirement savings.

 • Limit: C$100,000 per depositor, per insured category (e.g., individual, joint, registered accounts).

 • Funding: Funded through premiums from member institutions, which vary based on the institution’s size and risk.

 • Administration: CDIC is a Crown corporation established by the Canadian government and operates independently.

 • Special Features: Offers separate coverage for different account categories, and covers both Canadian and foreign currency deposits.

5. Australia - Financial Claims Scheme (FCS)

 • Coverage: Covers depositors in banks, building societies, and credit unions.

 • Limit: A$250,000 per account holder, per institution.

 • Funding: Funded by the Australian government as a “last resort” scheme, only called upon if needed.

 • Administration: Managed by the Australian Prudential Regulation Authority (APRA).

 • Special Features: Designed as a government-backed scheme, it can act quickly in the event of a bank failure to protect depositors.

6. Japan - Deposit Insurance Corporation of Japan (DICJ)

 • Coverage: Covers deposits in banks, credit unions, and agricultural cooperatives.

 • Limit: ¥10 million per depositor, per institution, plus interest. Settlement and current account deposits are fully insured to maintain financial stability.

 • Funding: Funded by premiums paid by member financial institutions, with government support if necessary.

 • Administration: Managed by the DICJ, which has the authority to resolve failing financial institutions.

 • Special Features: The DICJ also insures foreign currency deposits and offers unlimited coverage for current accounts to support liquidity.

7. India - Deposit Insurance and Credit Guarantee Corporation (DICGC)

 • Coverage: Covers deposits in commercial banks, cooperative banks, and rural banks.

 • Limit: ₹500,000 (about $6,800) per depositor, per bank.

 • Funding: Funded by annual premiums paid by member banks.

 • Administration: Operates as a subsidiary of the Reserve Bank of India (RBI).

 • Special Features: The coverage limit was increased in recent years to offer more security to depositors after banking sector challenges.

8. China - China Deposit Insurance Fund

 • Coverage: Covers deposits in domestic banks, foreign-owned banks, and some rural credit cooperatives.

 • Limit: CNY 500,000 (about $70,000) per depositor, per bank.

 • Funding: Primarily funded through premiums paid by financial institutions, with additional funds from the government if needed.

 • Administration: Managed by the People’s Bank of China.

 • Special Features: The scheme was established in 2015 as part of China’s financial reform to provide more stability and confidence in the banking system.

9. Brazil - Fundo Garantidor de Créditos (FGC)

 • Coverage: Covers deposits in banks, finance companies, and credit cooperatives.

 • Limit: BRL 250,000 per depositor, per institution.

 • Funding: Funded by premiums from member institutions based on their risk profiles.

 • Administration: Managed by the FGC, a private, non-profit institution created by Brazilian financial institutions.

 • Special Features: The FGC offers a safety net for a wide range of financial products, such as savings accounts, checking accounts, and certificates of deposit.

Appendix 3

Below is a breakdown of Poland’s deposit insurance system:

Poland: Bank Guarantee Fund (BFG)

·       Coverage Limit: €100,000 per depositor, per bank.

·       Funding: BFG is funded by annual contributions from banks operating within Poland, along with other financial institutions that offer deposit services. Banks pay a premium, which is collected by BFG and used exclusively for insured deposit payouts and financial stabilization.

·       Coverage: BFG protects standard bank deposits in checking and savings accounts, term deposits, and certain other types of accounts. It includes individual accounts, joint accounts (up to the limit per person), and business accounts. Deposits in both PLN and foreign currencies are covered.

·       Exclusions: Some exclusions apply, including deposits from financial institutions, government deposits, and certain high-risk investment products. Investment services, such as stocks or bonds, are also not covered.

·       Payout Time: BFG is required to provide reimbursement within 7 business days of a bank failure, ensuring prompt access to insured deposits.

·       Special Provisions: For temporary high balances (e.g., from real estate transactions, inheritances), BFG provides additional coverage for up to three months after the deposit, though specific documentation may be required to prove the source and nature of funds.

Unique Aspects of BFG in Poland

·       Crisis Management Role: In addition to deposit insurance, BFG also plays a role in crisis management and resolution for troubled banks. It has authority to restructure failing financial institutions and minimize systemic risk, similar to the FDIC’s role in the U.S.

·       Resolution Fund: Besides the deposit insurance fund, BFG operates a separate resolution fund designed to support the restructuring or orderly liquidation of failing banks without taxpayer involvement.

The BFG system aligns with European Union deposit insurance directives but includes unique provisions for Poland’s banking sector to enhance local stability and public confidence in financial institutions.