Account, prepaid card or Poste: the difference is one line, the IBAN

«I need an account» can mean three different things, and they cost different amounts. The difference is not in the product name: it is in one line of the contract, the IBAN.

The IBAN is the code that identifies your account: it is what you give your employer so your salary can be paid in, and the electricity company so the bill can be charged. With no IBAN, neither of those is possible.

A prepaid card without IBAN

The simplest one: you top it up and use it to pay in shops and online. It costs little and usually comes with no lengthy paperwork.

What you cannot do:

• have your salary or pension paid into it;
• make bank transfers;
• set up direct debits for bills.

Fine as a wallet. Not fine as your only tool if you work and pay rent.

A prepaid card with IBAN

The middle way, and what many people actually need. It has an IBAN, so:

• your salary or pension can be paid into it;
• you can send and receive transfers;
• you can set up direct debits for bills (SDD, the European system for recurring payments).

And it costs less than an account: many banks issue it free, the monthly fee is lower and as a rule there is no stamp duty — the € 34.20 a year a current account pays above € 5,000 of average balance.

What it lacks compared to an account: normally no overdraft, no cheques, and some counter operations are not available. For most people these are not gaps that matter.

The current account

It does everything a prepaid card with IBAN does, plus what you need when life gets complicated: overdraft, cheques, savings products, a mortgage with the same bank. It costs more: fee, stamp duty and the price of transactions.

If you are looking for the cheapest account, or the free one for people with a low ISEE (the Italian means-test indicator), read A bank account can cost very little, and in some cases nothing.

And Poste? It is both

This is where the most common confusion starts, and it is worth clearing up: Poste offers two different products, and people call both «the Poste account».

• BancoPosta is a current account in every respect;
• Postepay Evolution is a prepaid card with IBAN.

This is not a branding detail: it is the very difference this article is about. Look at what your contract says, because it decides what you can do and what you pay.

How to choose, in three questions

1. Do you need to receive a salary or a pension? Then you need an IBAN: prepaid with IBAN, or an account.
2. Do you need bills or rent paid automatically? IBAN again.
3. Do you need an overdraft, cheques, a loan from that bank? Then you need a current account.

If you answered yes only to the first two, a prepaid card with IBAN is almost always the cheaper choice.

Two things that apply to all of them

Nobody can charge you for receiving your salary. And if an employer tells you they will pay cash because «you have no account», remember that paying wages in cash is not allowed: wages must be paid by traceable means. We cover this in the articles on domestic work.

You give out your IBAN, never your password. An IBAN is not a secret: it exists to receive money and you can share it. It is the login codes, the PINs and the one-time codes that you give to nobody, not even to someone who says they are calling from the bank. How to spot those attempts is in SMS and WhatsApp scams: how to recognise them.

If you open anything, ask for the cost document

For a current account the bank must give you the Documento informativo sulle spese (fee information document) before you sign, with the indicative annual cost in it. Cards have an equivalent document. Ask for it: it is the only way to compare two offers without relying on what you are told at the counter.