Iceland, a land of fire and ice, captivates travelers with its otherworldly landscapes, geothermal wonders, and rich Viking heritage. As you prepare for your Icelandic adventure, understanding the local currency is crucial for a seamless experience. From the vibrant streets of Reykjavik to the remote fjords of the Westfjords, knowing how to manage your money will enhance your journey through this enchanting island nation.
In this comprehensive guide, we’ll explore Iceland’s currency, delve into its history, and provide practical tips for handling your finances during your Icelandic expedition. Whether you’re chasing the Northern Lights, relaxing in geothermal pools, or exploring glacial landscapes, this information will ensure you’re well-prepared for your Icelandic odyssey.
Currency in Iceland
The official currency of Iceland is the Icelandic króna (ISK). The word “króna” means “crown” in Icelandic, and its plural form is “krónur.”
Denominations
Icelandic króna coins come in denominations of 1, 5, 10, 50, and 100 krónur. Banknotes are available in 500, 1000, 2000, 5000, and 10000 krónur.
Currency History
Before adopting the króna in 1885, Iceland used the Danish rigsdaler. The króna was initially equivalent to the Danish krone and was linked to the gold standard until 1920. Throughout its history, the króna has faced periods of significant inflation and currency restrictions.
Usage Guide
Iceland is predominantly a cashless society, with credit and debit cards widely accepted throughout the country. However, it’s advisable to carry some cash for small purchases or in case you visit remote areas.
Tips for Travelers
- Card Payments: Most establishments accept major credit cards. Inform your bank about your travel plans to avoid any issues with your cards abroad.
- ATMs: ATMs are readily available in cities and towns. Look for “Hraðbanki” signs, which indicate ATMs in Icelandic.
- Currency Exchange: While you can exchange currency at banks and some hotels, it’s often more convenient and cost-effective to withdraw króna from ATMs using your debit card.
- Tipping: Tipping is not customary in Iceland as service charges are typically included in bills. However, rounding up the bill for exceptional service is appreciated.
- Price Levels: Iceland can be expensive compared to many other European countries. Budget accordingly and look for tax-free shopping options if you’re a non-EU resident.
- Mobile Payments: Many Icelanders use mobile payment apps. While these might not be accessible to tourists, they indicate the country’s preference for digital transactions.
- Currency Conversion Apps: Download a reliable currency conversion app to help you understand prices in your home currency quickly.
- Leftover Currency: If you have leftover króna, exchange them before leaving Iceland, as it may be difficult to exchange outside the country.
- Tax-Free Shopping: Non-Iceland residents are eligible for tax-free shopping on purchases of 6,000 ISK or above, potentially saving up to 14% on your shopping.
- Rural Areas: If you plan to visit isolated villages or stay in rural accommodations, carry enough cash to tide you over.
By familiarizing yourself with Iceland’s currency and financial practices, you’ll be well-prepared to enjoy all the wonders this magical country has to offer, from its stunning waterfalls to its otherworldly landscapes. Happy travels in Iceland!
Major Banks In Iceland
Here are the top 10 major banks in Iceland that travelers may find useful:
Major Banks
- Landsbankinn hf.
- Established: 2008 (with roots dating back to 1886)
- Type: Universal bank
- Services: Personal and corporate banking products, extensive branch network across Iceland.
- Íslandsbanki hf.
- Established: 2009 (rebranded from Glitnir)
- Type: Universal bank
- Services: Retail and business banking, with a strong presence through branches and ATMs.
- Arion Bank
- Established: 2008 (formerly known as New Kaupthing)
- Type: Universal bank
- Services: Retail, corporate, and investment banking, known for personal customer service.
- Kvika banki
- Type: Commercial bank
- Services: Offers investment banking services alongside traditional banking products.
- Central Bank of Iceland
- Type: Central bank
- Role: Regulates monetary policy and oversees financial stability in Iceland.
- Sparisjóðurinn (Savings Bank)
- Type: Savings bank
- Services: Focuses on savings accounts and personal loans.
- Landsbankinn (Savings)
- Type: Savings bank
- Services: Offers savings accounts primarily for individual customers.
- Íslandsbanki (Savings)
- Type: Savings bank
- Services: Provides savings and investment products for individuals and businesses.
- Vörður (Insurance and Banking)
- Type: Insurance company with banking services
- Services: Combines insurance products with banking services.
- Reykjavik Savings Bank
- Type: Local savings bank
- Services: Offers a range of personal banking services, including loans and savings accounts.
These banks provide various services that cater to both locals and travelers, including currency exchange, ATM access, and online banking options.
