Hidden costs: What you need to know about Norwegian bank accounts

What you need to open an account

In order to have a bank account in Norway you need a Norwegian social security number.

The process of getting this number can take a good amount of time depending on where you are originally from, and where you are at in the residency application process. Make sure your international funds will be readily available to you if you are living in Norway while waiting for residency acceptance, and if this requirement applies to your application.

After obtaining residency, you will receive your social security number in a letter between two to six weeks after you have had your appointment at the police station to order your residency card.

READ ALSO: How to apply for a Norwegian residency permit

In addition to a social security number, banks will ask for a valid form of identification. This can include your passport from or valid travel documentation for refugees. You will also need to provide your residential address in Norway.

Note that some banks will request additional identification documentation before granting access to open an account. 

Banks have a duty under The Money Laundering Act to prevent  money made from criminal activities being laundered, hence the stringent process for opening accounts. Norwegian banks apply the “know your customer" principle to prevent illegal money transactions.

A bank may refuse you their services if you can not identify yourself with valid ID. They may also refuse to make you a customer if they believe you can not provide enough information over what your account and other services will be used for. They can also deny you as a customer if you have previously been dishonest towards them.

Hidden credit card fees

There are many credit cards that can be entirely free if used correctly in Norway, but be aware of potential fees.

A few of the most common charges to look out for are: 

• The annual fee. There are still credit cards offered that charge a yearly fee for use. Make sure when you apply for one it is not one with a yearly fee as other credit cards have the same benefits without the charge.
• The paper bill. Many credit companies charge an average of 30 to 40 kroner for sending a paper bill to your address. This is per bill meaning you could be paying around 420 kroner a year just for receiving your credit bill in paper instead of paying online. 
• Paying a bill with a credit card. A number of banks and credit card companies that charge a fee if you pay a bill by credit card. This service can be beneficial if needed, but make sure to familiarise yourself with the terms of payment on the credit card you use so this fee does not come as a surprise.
• The overdraft fee. Most banks and credit companies will charge an overdraft fee if you charge for over the credit card's max limit. 

Check your bank's price list

Most of Norway’s banks have a price list on their website listing the costs of services and certain fees. Here is the price list for one of Norway's biggest banks, SpareBank 1. 

And here, you’ll find the price list for another large bank in Norway, Danske Bank.

Fees for having a pension account

Before choosing a bank, or when you check in with your current bank, ask directly what their administration fee is on a pension account. 

The pensions market is very confusing in Norway and consumers can lack the opportunity to orient themselves and compare prices in the market.

Elisabeth Realfsen, general manager of the Norwegian Consumer Council (Forbrukerrådet) service Finansportalen told NRK in 2016 that many banks take up to six percent in fees from pension capital certificates. You receive such certificates when you for example, change jobs and have a set pensions contribution with your previous employer. There are also banks that take significant administration fees.

Banks in Norway

Norway's biggest bank in both number of customers and total assets is DNB Bank ASA, with Nordea and Danske Bank in second and third place respectively. 

As a bank customer, there are a few things to consider when picking a bank. If you are looking for a bank with the best daily services then the bigger branches are a good bet, as they have the most developed customer service centres and websites. 

Depending on where you are originally from, you might be used to interest rates being a huge factor when considering which bank you choose. While interest rates are important in Norway, they are not a huge consideration as interest rates are generally low. Norway's central bank currently has a key policy rate of 0 percent. The lending rate is currently at 1 percent and the reserve rate is at negative 1 percent. The low rates are related to stability-focused policy during the coronavirus pandemic. 

Norwegian banks which score well on customer satisfaction include Sbanken, Handelsbanken, Eika Alliance, Danske bank, Sparebank 1, DNB, and Nordea, according to Neste Bank.

Norway currently has 152 banks to choose from. A comparison of different banks' offerings and reviews to help you make a choice can be found here.

A popular payment method

Vipps is a Norwegian payment solution that was established by the Norwegian bank DNB in 2015 and quickly became the most used payment solution method in all of Norway. It can be used by downloading the Vipps app on your smartphone and adding a method of payment.

You may also hear a local using the name Vipps as a verb. “You can just Vipps me later,” for example. That means you can send them what you owe them later. 

READ ALSO: Black Friday 2019 saw highest card, app spending in Norway's history

What is a BankID?

A Bank ID is a secure electronic identification method that is linked to your bank account. Your Norwegian BankID can be used for transactions like logging into your online and mobile bank, signing electronic documents such as a loan application, and bidding for housing.

Useful vocabulary 

Spar: save

Konto: account 

Penge: money 

Årsavgift: yearly fee

Kredittkort, debetkort: credit card, debit card