In Español peninsular, unlike in English, we have two personal pronouns for "you" singular: tú and usted.
We use tú to say "you" informally, i.e when talking to a friend, a person we know well, a child, and young people in general. For example:
All these above are informal situations where the speakers know each other well.
Note that when using pronoun tú, the verb must be conjugated in the 2nd person singular, e.g. vas, descansas.
We use usted to say "you" formally, i.e when talking to a person you do not know or elderly people. It is also a way to show respect. For example:
The first example above is a formal situation, e.g. in a bank, with a lawyer. The second example expresses the way one normally talks to elderly people.
Note that when using pronoun usted, the verb must be conjugated in the 3rd person singular, e.g. está, tiene, puede.
Special note on usted
In some parts of Spain, generally more rural areas, people speak to their own elderly mother or father referring to them as "usted" despite being their own family. For example:
This is a custom that doesn't reflect the general use but it still happens in some places.
¿De dónde es Ud.?
This is the general rule:
- Use tú for informal situations such as with a friend, children, young people, people you know very well.
- Use usted (Ud.) for formal situations such as in a job interview, in a bank, with elderly people, with someone you don't know or you have just met.
Also remember to conjugate the verb in the right form!
Bear in mind that while this is the general rule, it may vary depending on the speaker's preferences. Some people are more inclined to drop the usted form than others, and vice versa.