Payment in kind

Banks may sometimes offer a gift in return for your deposit instead paying interest.

If you opt for an in-kind payment for your deposit, note that:

  • The “gift” is not free: payment in kind is subject to personal income tax (IRPF in its Spanish initials) and the return on the deposit will be deemed to be the market value of the gift.
  • You should compare the value of the gift with what you could earn from an equivalent deposit paying interest in cash.
  • The gift is usually given at the start of the deposit on the assumption that the deposit will be held until maturity, so early cancellation is not usually possible. If early cancellation is allowed, a penalty fee is usually charged based on the value of the gift.



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