Banking in Sweden

Quite some time ago now, I got all of our banking setup in Sweden.  Banking in Sweden is quite different than the States, I think I mentioned this before, but that personal connection still exists there.  I went with Nordea because my company banks with Nordea, so that got me some extra services and cheaper services that I would not normally get.

I set an appointment with my personal banker to walk through and set everything up.  There is something that is kind of nice knowing that she is always available to help me should I need it.

The first thing I did was setup a simple Checking and Savings account.  They of course don't really call them that, they are both closer to what we would think of as Savings accounts in America, but with no real paper checks any more there, a Checking account is obsolete.  The only difference is that the Savings account has a high interest rate, but I am only allowed a limited number of transfers to and from that account each year.  The idea is to encourage you to actually save money.  Then I setup my internet access for the accounts which is important.  Accessing your account on the internet is a bit of a pain.  First, you have 2 different pins, one for the ATM, and one for online.  Plus you have this extra device that looks like a calculator that you need to stick your card into, punch in your internet pin and then it returns a number that you then punch in to the website to login.  So there is no real easy just check your account real quick, there is some prep time involved.  It's nice to have real bank accounts now, I can do everything.

The second step was to get a Visa due to all my travel, it is nice to have a Visa available.  Getting that was about as easy as it gets.  She asked me what limit I wanted on it and that was about it.  There is no credit check (your US credit has no meaning in Sweden), just sign up and go.  There are a few nice benefits with the Visa, you get a discount if you use it for fuel at a Gas station which is cool.  You also have a 55 day grace period, so no interest accrues for 55 days.

We spent a little bit of time talking about retirement.  One thing to know is that 18.5% of your income is withheld for their version of Social Security.  16% goes some place, and then you get some control over the other 2.5%.  After you live there for a year, you can then pick amongst several funds to put that 2.5% into from conservative to aggressive.  The bank (and a lot of other places) can be the middleman for you in that.

Then it was onto loans which was pretty interesting.  So the bank looked at what they would lend me as a total loan portfolio, that is a total amount of money that they would be willing to lend me.  That total amount would change a little based on how you decided to use the money.  For example, an auto loan is for a shorter period of time, so your monthly payment would be higher, so the more you spend on a car, the less you get for a house.  To figure this out, they look at what I make, and then put in some standard expenses for having 2 children.  Then they calculate the pre-approval at a mortgage rate of 8%.  I found that part really interesting because current rates are just under 1.5%.  Those are definitely going to go up, everyone knows that, and they are very paranoid about people not being able to afford their homes when they go up.  But, the interesting part is that most people feel it could go up to between 4-5%, so doing an approval at 8% shows you just how conservative they are.  So after that, she game some pre approval information for both a car loan and a mortgage.  Now, we need to decide what we will do, but certainly something.  The only part that I cannot remember is how long the mortgages are financed over.  There is still some learning to do on mortgages, especially around closing procedures and whatnot.  For example, there are sort of the normal closing costs that you would see in America, taxes and whatever.  However, there is one weird part and that is you have to pay a 2% fee on the difference of your loan minus the loan of the people that you are buying the home from.  So if you end up buying a house where the owners have almost no loan on the property, you could end paying a pretty big fee.  I'm not sure what the reasoning behind that is yet, still need to learn.

That was about it, they also offer home and auto insurance, so I will get some quotes for prices on that stuff when they are necessary.  Overall, it is good to have that behind me now.  We will just have to add Sarah when we get moved over.


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