The banks offer payment services and provide loans for various purposes.
In order to receive your salary, you will have to open an account in a Faroese bank. You will need a Faroese ID-number to open a bank account.
If you are staying in the Faroe Islands for a short time and do not have a Faroese ID-number, the bank will need a copy of your passport and a name certificate in order to allow you to open an account.
Bank deposits in Faroese banks up to DKK 750,000 per person are guaranteed through a deposit guarantee fund.
There are 4 banks in the Faroe Islands:
- Bank Nordik (in Faroese and Danish)
- Eik (in Faroese)
- Norðoya Sparikassi (in Faroese)
- Suðuroyar Sparikassi (in Faroese)
The banks offer debit and credit cards for withdrawal at cashpoints and making purchases.
New customers normally receive a MasterCard Debit which only allows the owner to withdraw the amount available on the account.
If the bank assesses your financial standing to be satisfactory, you may be offered a Dankort or Visa/Dankort which – if the bank agrees - allows purchases and cash withdrawals higher than the deposit. An interest will be charged for such amounts. A Dankort can be issued for withdrawal and payment within the Danish Realm, and a Visa/Dankort for withdrawal and payment in most countries around the world.
Customers that are well known to the bank may also get a MasterCard Credit which allows the owner a balance of debt.
All banks offer online banking which allows you 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 you can also ask the post office or the banks to pay bills or transfer money for you. In this case you will have to pay a service fee.
The best way to transfer money between the Faroe Islands and countries outside the Danish Realm is by using SWIFT 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 your financial standing before granting a loan.
Loans from a Faroese bank normally have a floating rate that varies according to the market rate.