Funds (Fond)

Funds are popular as they permit individuals to invest without becoming directly involved in financial activities. Many types of funds are offered by banks, insurance companies and financial organisations, and involve investments in shares (aksjer), bonds (obligasjoner), the money market (pengemarked) or a combination of these (kombinasjonsfond). All funds must be approved by and monitored by the Financial Supervisory Authority (Kredittilsynet) and may comprise investments only in securities that are:

• listed by securities exchanges in the EEA (European bourse)
• traded in other regulated markets in the EEA
• traded on other exchanges which are open to the public and are regulated by supervisory agencies
• new and backed by conditions of issue, including a commitment to apply for listing in one of the three markets listed above.

Giro (Giro)

A giro is a means of non-cash payment. On paper, it resembles a cheque, but whilst a cheque is handed over or sent to a payee who then deposits it, a giro is handed in or sent to a bank or clearing centre that in turn deposits to the payee’s account.

Each year, private persons pay more than 100 million bills via the giro system. So unlike some countries, including Great Britain, where the giro system is used for, and consequently especially associated with social security payments, the Norwegian giro systems are the commonplace way to pay all bills and receive all payments.

Most bills now have optical-character recognition (OCR) giro forms attached. So to pay, you only need to fill out the form as shown below and hand it over to a bank teller or send it to your bank’s giro clearing house. You also may pay a giro via online banking, in which case you need not fill out the form and will save money, because the banking charges are less for online services than for paper-based services.

Gold and silver (Gull og sølv)

Gold and silver are the principal noble metals (edelmetall) traded and quoted in the financial pages of newspapers, usually under the heading “Metals” (Metaller). In 1891, a uniform metric measure of fineness replaced the carat (karat) proportional measure of 1/24 for the fineness of gold and names such as sterling (sterlingsølv) for the fineness of silver. The metric measure is a three-digit number expressing the parts per thousand of the pure metal. For instance, pure gold has a fineness of 999, indicating a purity of 999/1000 and equivalent to the older 24 carat, whilst a metal of 750/1000 gold is equivalent to 18 carat. Likewise, 925/1000 silver is equivalent to the older sterling designation. To be designated “gold”, a metal must have a fineness of at least 585/1000. Likewise, “silver” must have a fineness of at least 830/1000. Fineness is stamped on ingots of a metal and on some items worked from it, such as on silverware, as well as stated in the descriptions of gold and silver items, such as jewellery. There is no import duty on gold or silver other than value-added tax (MVA), which is charged on the invoiced purchase price plus shipping costs.

Insurance (Forsikring)

On Christmas Eve in 1753, Norway’s first insurance company, Christianiœ Byes Brand Assuerance Casse, was founded in Christiania, as Oslo then was called. It took six months to convince enough households to insure themselves so it could elect a board and formally start business, and in February 1755, it issued its first policy.

Now, 250 years later, several Norwegian and foreign insurance companies offer life and non-life insurance, and insurance premiums account for 2.6% of the annual expenses for the average family.

The main types of insurance for individuals (as opposed to companies) are life insurance (livsforsikring), accident insurance (ulykkesforsikring), automobile/motor insurance (bilforsikring), fire insurance (brannforsikring), health insurance (helseforsikring), home insurance (hjemmeforsikring), life and retirement assurance (pensjonsforsikring), leisure craft insurance (båtforsikring) and travel insurance (reiseforsikring). The insurance business is competitive and both Norwegian and foreign companies offer policies. For specific details, contact one or more insurance companies. For general information, contact The Norwegian Financial Services Association (Finansnœringens Hovedorganisasjon), Hansteensgt 2, PO Box 2473 Solli, 0202 Oslo, Tel: 23284200, Fax: 23284201, www.fnh.no, firh@ftih.no.

Insurance companies (Forsikringsselskap)

If you work for a larger public or private sector organisation, ask your employer about insurance, as many organisations have group arrangements with insurance companies. All insurance companies have offices throughout the country, so you may contact an insurance company listed in the Yellow Pages or find the nearest office of a company listed under its name in the Pink Pages. The eight largest companies offering private life and non-life insurance are listed below along with the address of their head offices and their websites:

• 1Gjensidige NOR offers both life and non-life insurance, and is the leader in non-life, with a market share of over 31%, Drammensveien 288, PO Box 276, 1326 Lysaker, Tel: 22968000, Fax: 22969200, www.gjensidigenor.no.
• 2KLP Forsikring is part of the Municipal Pension Fund (Kommunal Landspensjonkasse). It has 355 local and county authorities, 2,500 companies associated with the public sector, 32 health enterprises and the five Regional Health Authorities as its client base. It is one of the country’s three largest life and pension insurance companies, Karl Johans gt 41B, PO Box 1733 Vika, 0121 Oslo, Tel: 22033500, Fax: 22033600, www.klp.no.
• 3If is the largest non-life insurance company in the Nordic and Baltic countries and is owned by two life insurance companies, Storebrand of Norway and Skandia of Sweden, Lysaker Torg 35, PO Box 40, 1326 Lysaker, Tel: 02400, Fax: 67840600, www.if.no.
• 4Nordea is associated with the Nordea banks and offers both life and non-life insurance, Middelthunsgt 17, PO Box 1166 Sentrum, 0107 Oslo, Tel: 22485000, www.nordea.no.
• 5Spare Bank 1 is associated with the Sparebank I savings banks and offers both life and non-life insurance, Henrik Ibsens gt 12, PO Box 778 Sentrum, 0106 Oslo, Tel: 21025050, Fax: 21025051, www.sparebankl.no.
• 6Storebrand is among the leaders in life insurance that caters principally for the group market, serving almost 5,000 companies having more than 230,000 employees, Filipstad Brygge 1, PO Box 1380 Vika, 0114 Oslo, Tel: 22315050, Fax: 22311030, www.storebrand.com.
• 7Vesta is a smaller company that focuses on personal service and offers a broad range of life and non-life insurance, Folke Bernadottssvei 50, PO Box 7070, 5020 Bergen, Tel: 04040, Fax: 55261000, www.vesta.no.
• 8Vital is the country’s largest private company in life and pension insurance, Folke Bernadottesvei 40, PO Box 7500, Bergen, Tel: 81500070, Fax: 81500270, www.vital.no.

Most insurance companies now require that insured bicycles be registered with the Falck Cycle Register provided by the Falck security services company, part of Group 4 Falck of Copenhagen, the world’s second-largest provider of security services. Brochures describing the Register are available in shops selling and repairing bicycles and from insurance companies. For further details, contact the Falck head office, Maridalsveien 300, Service Box 4900 Nydalen, 0423 Oslo, Tel: 81568112, Fax: 23004202, www.falcknorge.no, sykkel@falckredning.no.

Insurance complaints (Forsikringsklager)

If you are dissatisfied with an insurance company’s service, such as non-payment of a claim that you consider justified, you may write or call the company’s complaints department (klagenemnd), which is obliged to give you a written answer. If you are dissatisfied with that answer, you may appeal to the Norwegian Bureau for Insurance Disputes, NBI (Forsikringsklagekontoret, FKK), which is affiliated with the Consumer Council (Chapter 26) and consequently acts as a consumer organisation, Bygdøy allé 19, PO Box 53 Skøyen, 0212 Oslo, Tel: 23131960, Fax: 23131970, www.forsikringsklagekontoret.no, firmapost@forsikringsklagekontoret.no. NBI will handle your complaint free of charge and advise you of the outcome.

Interest (Rente)

Norges Bank sets the bank base rate (rentenivå) that reflects government economic policy. The bank base rate also acts as the minimum lending rate on which all other interest rates are set. As an individual, you most likely will be concerned principally with the current borrowing rate (lånerente), such as on a mortgage or loan, and interest paid (renteavkastnig) on investments, such as on savings accounts. In personal income tax, interest paid and interest earned are treated equally. That is, on your tax return, you may deduct interest paid on loans, but you must also declare interest earned on savings or investments. When evaluating investment, you should consider interest yield after tax (avkasting etter skatt). All interest income (renteinntekter) is taxed at 28%. Any sum invested, as in a savings account or other financial instrument, is subject to an estate tax (formueskatt) of 1.04%. With time, inflation diminishes the value of money. Consider, for instance, your income from a high-interest bank account paying 6% on a deposit of NOK 2 million:

Other investments yield greater return, as much as 3.6% net yield on a property investment. These are fictional figures, but they are published by the State (in FIN-NOU, 2003: 9, Table 12.2), so they reflect the realities of interest.

International Bank Account Number (IBAN)

The International Bank Account Number (IBAN) is an account identifier that simplifies cross-border transfers. Even if you know little about another country’s banking system and are puzzled by its bank account numbers, you need only know the IBAN and the Bank Identifier Code to pay an invoice or otherwise transfer funds. The IBAN was initiated by the EU and now is used throughout Europe. It comprises a series of up to 34 alphanumeric characters that uniquely identify a bank account anywhere in the world. It starts with the two-character ISO Country Code, and then continues with two check digits, the bank branch code and, finally, the basic bank account number (BBAN) that is derived from but need not be identical to the bank account number. The IBAN format for Norway comprises 15 characters:

NOKKBBBBCCCCCCC

where NO is the ISO code for Norway (the O is the capital letter, not a zero), KK are check digits, BBBB are the bank branch identifier, the first six of the seven Cs are derived from the bank account number, and the final C is a check digit. In all electronic transfers, the IBAN is keyed in with no spaces, as it is written above, but on paper it is written in groups of four characters:

NOKK BBBB CCCC CCC

IBANs are associated with all bank accounts in Norway. So if you want to know the IBAN of your account, ask the bank or, for larger banks, visit its website and use the IBAN calculator there.

For comprehensive information on IBAN, contact the European Committee for Banking Standards (ECBS), Avenue de Tervueren 12, B-1040 Brussels, Belgium, Tel: +32 27333533, Fax: +32 27364988, www.ecbs.org, ecbs@ecbs.org.

Invoices (Faktura)

Most invoices are printed bills with attached giro forms, which give the details of goods or services ordered or delivered and state discounts, trade terms (betingelser) and applicable taxes, which usually are the computed MVA (Chapter 43). You may fill in your bank account number, sign the form and return it by post. Or, if you have a relevant agreement with your bank, you may pay via online banking. The date of invoicing (dato) and the due date (forfall) will be stated. Penalty interest (morarente), at a stated rate, is usually charged for late payment (for sen betaling) after the due date. As a rule, you should post a signed giro three bank days in advance to ensure payment by its due date.

Loans (Lån)

A loan is one of the few goods or services for which you must submit an application for purchase. But if your finances are relatively solid – or even if they are not and you have solid security, such as a saleable house – the only difficulty you may have in borrowing is selecting among loans offered on a buyer’s market. Many financial organisations loan to private persons, including banks and insurance companies, credit institutions (kredittforetak), pension plans (pensjonskasser) and public lending organisations, such as the Norwegian State Housing Bank (Husbanken).

If you need to borrow, you should start by enquiring about the loans offered by the organisations with which you have connections, such as your bank, the insurance company with which you have policies or the pension fund at your workplace. Compare their offerings, starting with the overall cost of borrowing (lånets kostnad).

Loans are repaid in instalments (termin), each of which consists of repayment (avdrag), interest on the remaining principle and the instalment charge. There are many repayment plans (nedbetalingsprofil); the most common are the serial loan (serielån) and the amortised loan (annuitetslån). The serial loan has fixed repayments, so its instalments initially are large and then decline as the loan is paid off. The amortised loan has fixed instalments, so repayment initially is small and then increases as the loan is paid off.

Mortgage (Boliglån)

For most people, a mortgage to buy a house or flat is larger and therefore more important than any other loan they may take out. A mortgage involves providing security (sikkerhet) for a loan in the form of an agreement to transfer the rights to a property (pant) should the amount borrowed not be paid as agreed. The agreement is valid after it has been signed by both the lender and the borrower and properly recorded by the local city recorder or district recorder (Chapter 38). The lending institution, such as a bank, insurance company or pension fund, called the mortgagee (panthaver) usually will grant a mortgage for a certain portion of the purchase price (kjøpesummen) or valuation price (verditakst) as set by an assessor or valuation agency, as listed under Taksering in the Yellow Pages. Two figures are commonly used: loan value (lånetakst) and market value (omsetningsverdi). The loan value usually is 80% to 85% of the valuation price. Normally, the lending institution will grant a mortgage for up to 80% of the purchase price or up to 80% of the valuation price in refinancing. Full financing, up to 100% of the purchase price, usually is granted only if other security is offered, such as a mortgage on the home of the parents of a young couple buying their first home. An initial mortgage is called a first mortgage (første prioritetelan), because the borrower, called the mortgagor (pantsetter) has no previous mortgages on the property. If you need more money after taking out a first mortgage, such as to remodel an older house, you may consider taking out a second mortgage (anen. Prioritetslån). The term “second” means that the lender ranks behind the lender of the first mortgage in case the property should be sold to pay defaulted debt. If you have a first and a second mortgage on a house and pay off the first mortgage, the second mortgage advances to a first mortgage. Any mortgage you take out thereafter will be a new second mortgage.

Norges Bank

Most countries have a central bank. Examples are the Bank of England in the UK, the Federal Reserve System in the USA, the Deutsche Bundesbank in Germany, the Banque de France and the Bank of Japan. Norges Bank is Norway’s central bank.

The central banks differ in their scopes of activities, in the powers they exercise, and their relationships with their governments. But each central bank serves both the government and the banking system of its country. The interplay of these two roles has resulted in central banks playing key parts in conducting monetary policies affecting the cost and availability of money and credit. This makes each central bank important in its domestic economy, and together with other central banks, influential in the financial markets of the world. Some central banks, such as the Bank of Japan, elect to translate their names when used internationally. Others, such as Deutsche Bundesbank and Norges Bank, retain their names in their native languages. Norges Bank is a separate legal entity owned by the State. It is an executive and advisory body for monetary, credit and foreign exchange policy. It issues currency, promotes domestic and international payment systems and monitors developments in the money, credit and foreign exchange markets. Its head office is in Oslo and it has 12 regional branches. The printing works are in Oslo and the Royal Norwegian Mint is in Kongsberg. For further information, contact Norway.no (Chapter 31) or the Bank, Bankplassen 2, PO Box 1179 Sentrum, 0107 Oslo, Tel: 22316000, Fax: 22413105, www.norgesbank.no, central.bank@norges-bank.no.

Online banking (Nettbank)

If you have Internet access, you should consider online banking, because in many ways it is more convenient than conventional banking. At any time that suits, you can view your bank statement, transfer money between accounts, pay bills or transfer to other accounts – in advance if you wish – review past statements or print out receipts. If your employer follows customary practice and pays your salary directly into your account, then you need neither physical contact nor exchange of papers with your bank, save for using and printing out receipts at its cashpoints. In practice, all you need is a computer with Internet access and an agreement with your bank to access one or more of your accounts online.

You start an online banking session by logging on to your bank’s online service, using your user name, which usually is your National Identity Number (Chapter 38), followed by a password, which may be either a fixed password of your own selection or a password generated by a palm-sized password generator, triggered by input of a password of your own selection. Thereafter, you can select services from taskbars and drop-down menus and complete your transactions.

Most banks have long offered online banking, some for more than 10 years: in late 1989, Postbanken, an affiliate of Norway Post, became the world’s first bank to offer online services to its customers. Norwegians’ long experience has led to the world’s most prevalent use of online banking. Almost half of all Norwegian bank account holders use online banking to access their accounts, not least because the banking charges are less than those for paper-based banking, but also because some organisations with a high percentage of online banking customers send out simple requests for payment and send paper giro bills only to customers that request them. Moreover, online banking arguably is the most international of all everyday banking services. Most banks supplement website pages in Norwegian with pages in English, while DnB Nor has made its entire online banking site available in Norwegian and in English, at www.dnbnor.no. For further information, contact your bank, in person or online.

Pawnshop (Pantelåneforretning)

Pawnshops lend money on the security of personal property such as jewellery, silver, sports equipment, high-end cycles and musical instruments. In general, a pawnshop will loan out a tenth to a fifth of a deposited object’s value, usually with a minimum of NOK 100 and a maximum of NOK 200,000 for a single loan. When you take an object to a pawnshop as security for a loan (håndpant), you must show identification to prove that you are a legitimate pawnor (lånetager) and, for some objects, proof of ownership, such as a receipt for the purchase of a high-end cycle or a golf association card for pawning golf clubs. The pawnbroker (pantelåner) will record these details and then pay you the full amount of the loan in cash. The bookkeeping is necessary, as pawnshops work with the police and with insurance companies to hinder sale of stolen goods. After pawning an object, you have the remainder of the month plus the following four months to repay the loan and redeem the object. Interest is charged at the prevailing rate, now 2.25% to 3.00% depending on the value of the object pawned, and there is a fixed fee of up to NOK 100 for each transaction. If you fail to redeem the pawned object, the pawnbroker will notify you in writing of a deadline date for redemption before it is sold at auction. You will receive a further notice if the object is actually auctioned.

There is only one pawnbroker in the country, Nordea, the country’s oldest bank that got its start in 1848 under the name Kreditkassen by lending money and accepting jugs of wine pawned as security. For further information, contact the Nordea pawnshop, Prinsensgt 12, 0152 Oslo, Tel: 22338460.

Payment cards (Betalingskort)

Payment cards are now used in six of 10 of the 750 million non-cash transactions a year in the country. There are three principal varieties of cards: debit cards, credit cards and charge cards.

Debit cards (bankkort), also called cash cards (kontantkort), are used at cashpoints to withdraw money and in point-of-sale (POS) readers (kortlesere) to debit purchases made in shops. A debit card identifies the holder of a deposit account in a bank, which must have sufficient balance to cover the amount debited when the card is used.

Credit cards (kredittkort) are used in the same way as debit cards, but provide an overdraft or credit facility. Most credit cards are issued by banks in various plans that combine debit to a deposit account with a credit extension to it.

Charge cards (handlekort) are valid at the outlets of specific retailers and require regular monthly settlement, usually against an invoice sent on a specified day of the month. Most petrol station companies and hypermarkets issue charge cards valid for purchases at their outlets throughout the country and, in some cases, throughout Scandinavia or Europe.

All debit and charge cards issued in Norway can be used in all shop POS terminals, as can most international cards issued abroad. However, some international credit cards are valid only with a Scandinavian personal identity number (PIN). All Norwegian payment cards are in the international standard 85 x 54 mm format. Most have a black magnetic stripe on the reverse side that is read when the card is swiped through the slot of a POS terminal, but some are smart cards with embedded microprocessors and are read by inserting into the POS terminal. For further details on card services and costs, contact the issuing banks and payment card companies at addresses and telecommunications numbers listed in the Pink Pages.

Personal finances (Privatøkonomi)

Personal finances traditionally have been a taboo topic. So finances were considered separate from life in general, and upper secondary schools (gymnas) were divided into two groups, those with business-oriented curriculum (handelsgym) and those with all other curricula; either you studied business and thereby knew something about it, or you did not and were ignorant of it. That view has changed, triggered in part by the founding, in 1983, of Dine Penger (Chapter 31), the country’s first magazine dedicated to private finances. Copious personal financing information is now readily available, from Dine Penger as well as from the Consumer Council (Chapter 26).