Iceland (IS)
Iceland is a North Atlantic volcanic island nation of extraordinary natural beauty — home to geysers, glaciers, lava fields, midnight sun, the Northern Lights, and some of the world's most active volcanoes.
Banking in Iceland
Recommended banks, payment culture and credit score basics.
The Icelandic banking system is modern, highly digitalised, and English-friendly. All three major banks — Landsbankinn, Íslandsbanki, and Arion Bank — offer full English-language online and mobile banking. The kennitala (personal identification number, 10 digits) is the absolute prerequisite — no kennitala, no bank account. Apply for your kennitala at Þjóðskrá Íslands (Registers Iceland) at skra.is as soon as you register your address. All major banks now use the Auðkenni app (Rafræn skilríki — electronic ID) for secure digital authentication; setting up Auðkenni is the first post-account step. The 2008 banking collapse reshaped the sector entirely — the current banks emerged from the restructuring and are now stable, well-capitalised, and regulated by Seðlabanki Íslands (the Central Bank of Iceland). Currency: ISK (Icelandic Króna). Iceland participates in SEPA, simplifying euro-area transfers. The ISK is freely convertible following the lifting of capital controls in 2017.
Recommended banks
Landsbankinn
EnglishMonthly fee: ISK 0–500/month; basic current account free for most customers; premium accounts ISK 300–500/month
Requirements: Kennitala is required. Valid passport, kennitala documentation, Icelandic phone number, registered address in Iceland. Online application available at landsbankinn.is — most straightforward account types can be opened entirely online once kennitala is issued. Branch appointment available at 101 Reykjavik (Austurstræti) or Kópavogur for complex cases.
- + Iceland's largest bank — most extensive branch and ATM network nationwide
- + Full English-language internet banking (Netbanki) and mobile app
- + International SWIFT transfers available with competitive ISK exchange rates
- + Strong digital banking platform — Auðkenni integration seamless
- + Landsbankinn credit card available after 3–6 months of account relationship
- + Mortgage products for long-term Iceland residents
- + Phone and online support available in English
- - Kennitala required before any account can be opened — typically takes 1–4 weeks to obtain from Þjóðskrá
- - ISK is a small-currency with limited international exchange points — convert to EUR/USD for large savings
- - International transfer fees: ISK 1,500–2,500 per SWIFT transfer — use Wise for regular remittances
- - Monthly fee applies on some account packages if conditions not met
Íslandsbanki
EnglishMonthly fee: ISK 0–400/month; standard current account free with qualifying conditions
Requirements: Kennitala required. Valid passport, registered Icelandic address, Icelandic phone number. Online account opening available for most straightforward cases at islandsbanki.is — some applications require a branch visit at the Reykjavik head office (Kirkjusandur 2). Account opening typically 1–3 business days once kennitala is confirmed.
- + Modern digital banking platform — Íslandsbanki app rated highly for UX and reliability
- + English-language mobile app and online banking (Netbanki) fully available
- + Good for investment and savings products — pension fund integration available
- + SWIFT international transfers with mid-market-adjacent exchange rates
- + Good customer service reputation — English support via phone and in-branch
- + Private banking services for qualifying clients (Íslandsbanki Private)
- + SEPA transfers to EU/EEA countries — lower fees than global SWIFT
- - Kennitala required — no workaround or temporary account while waiting
- - Some account types require in-person branch visit for identity verification even with online application
- - International transfer fees ISK 1,500–2,000 per transfer — Wise considerably cheaper for regular remittances
- - Fewer ATMs than Landsbankinn outside Reykjavik
Arion Bank
EnglishMonthly fee: ISK 0–450/month; basic accounts free; premium packages up to ISK 450/month
Requirements: Kennitala required. Valid passport, Icelandic registered address, phone number. App-based account opening available (Arion app) — often fully digital once kennitala is confirmed. The Arion Bank head office is at Borgartún 19, Reykjavik; branches in Akureyri, Selfoss, and other regional towns.
- + Good mobile banking app (Arion Bank app) — English interface available
- + Competitive mortgage (húsnæðislán) and savings deposit products
- + Auðkenni digital ID integration for secure online banking
- + SWIFT and SEPA international transfers available
- + Arion Kortasjóður credit card available after account establishment
- + Good for expats planning long-term property purchase in Iceland
- - Smaller branch network than Landsbankinn — particularly limited outside Reykjavik capital region
- - Kennitala required before any account opening
- - International transfer fees ISK 1,500–2,500 — consistent with other Icelandic banks
- - Some complex banking services require branch visit even with digital-first setup
Kvika Bank
EnglishMonthly fee: ISK 0 for basic savings and investment account
Requirements: Kennitala required. Application via Kvika app. No minimum deposit for savings account. Kvika Bank (formerly MP Bank) focuses on investment products, high-yield savings, and digital-first banking — not a full-service retail bank.
- + No monthly fee for basic savings account
- + Competitive ISK savings deposit rates — often higher than the three major banks
- + Competitive foreign currency exchange and transfer rates
- + App-based and digital-first — minimal bureaucracy for qualifying account types
- + Good for expats who primarily need a high-yield savings account alongside a main Landsbankinn/Íslandsbanki account
- - Not a full-service retail bank — limited everyday banking functionality (no debit card, limited payment services)
- - Kennitala required — same as all Icelandic banks
- - More focused on investment and savings than day-to-day current account banking
- - Less suitable as a primary account — use as a savings complement to a Landsbankinn or Íslandsbanki main account
Wise (Multi-currency Account)
EnglishMonthly fee: ISK 0 (account); small per-transfer fees
Requirements: No kennitala required. Passport or national ID verification online. No Icelandic address required. Wise is not an Icelandic bank — it provides a multi-currency account with ISK support and is used by expats before and alongside a local bank account.
- + Available immediately on arrival — no kennitala required, unlike all Icelandic banks
- + Best exchange rates for converting ISK to GBP, EUR, USD and vice versa
- + Multi-currency account: hold ISK, EUR, GBP, USD and 40+ currencies
- + Wise debit card accepted at Icelandic ATMs and Visa merchants
- + Essential for anyone sending money home regularly — savings of 70–90% vs Icelandic bank SWIFT fees
- + Receive foreign salary in EUR/GBP then convert to ISK as needed
- - No Icelandic kennitala-linked IBAN — cannot receive salary directly from Icelandic employers in most cases
- - Not a full Icelandic bank — no overdraft, Icelandic mortgage, or local credit products
- - Cannot replace a local account for Auðkenni digital signature, tax filings, or most Icelandic government digital services
- - ATM withdrawal fees above monthly free allowance
Payment culture
Iceland is one of the most cashless countries in the world — card and contactless payment is accepted literally everywhere, including remote petrol stations, rural guesthouses, swimming pool entry, and market stalls. Visa and Mastercard are universal. Apple Pay and Google Pay work at all contactless terminals. The Auðkenni app is used for all digital bank authentication and is essential for any online government or financial transaction. Bank-to-bank transfers via mobile banking apps are used for splitting costs and informal payments between individuals. Cash: carrying ISK 5,000–10,000 (approximately EUR 33–66) in cash for emergencies is sufficient — most venues actively prefer card. ATMs dispense ISK 1,000 and 5,000 notes. The high ISK denomination (e.g., rent of ISK 200,000–350,000/month, roughly EUR 1,300–2,300) surprises new arrivals — this is normal given the ISK is a high-face-value currency.
Cash access
Hraðbankar (ATMs) are available at all major banks, shopping centres (Kringlan, Smáralind), petrol stations, and Keflavík Airport arrivals. In Reykjavik, ATMs are never more than a few minutes away. In rural Iceland, villages, and the highlands: ATMs are very sparse or non-existent — use card payments wherever possible and withdraw cash in the last sizeable town before heading to remote areas. Þórsmörk, Landmannalaugar, and other highland destinations: card-only possible but ATM access is days away. Foreign cards (Visa/Mastercard): work at all Icelandic ATMs; expect ISK 300–600 withdrawal fee from ATM plus your home bank's international fees.
Creditinfo Iceland (creditinfo.is)
Iceland's main credit reference bureau is Creditinfo (creditinfo.is). Individuals can request their credit report online at creditinfo.is — registration with kennitala and Auðkenni authentication required. The report shows credit history, existing loans, payment defaults, and bankruptcy records.
Free annual check: One free credit report per year available from Creditinfo. Additional checks available for a small fee.
New residents have no Icelandic credit history — this is neutral, not negative. Building credit history in Iceland takes time: the kennitala registration is the starting point; then 6–12 months of active banking (account, debit card, regular transactions) establishes a banking relationship. Credit cards and personal loans typically available after 6–12 months of account history. Capital controls were lifted in 2017 — the ISK can now move internationally without restriction, but exchange rate volatility historically requires timing awareness for large conversions.
International transfers
Iceland participates in SEPA — transfers to EU/EEA countries are standard SEPA credit transfers (1–2 business days, low or no fee). For international SWIFT transfers outside SEPA: ISK 1,500–2,500 fee per transfer at all major Icelandic banks, plus poor exchange rate spread. Wise (wise.com) is the recommended solution for regular international transfers — fees typically 0.4–1.0% of amount at mid-market rate vs 3–5% combined at Icelandic banks. For large one-off transfers (property purchase, large savings movement), Landsbankinn and Íslandsbanki offer currency forward contracts. Western Union and MoneyGram are available but not commonly used. ISK is now freely convertible internationally following the 2017 capital control removal.