Banking

 

 

This page includes tips and guides for opening a bank account and managing your finances. For specific tips on saving money, see saving money.

 

Bank overview

There are two main types of consumer banks in Germany:

  • Traditional banks, with their own banks and ATMs
  • Online-only banks

The former tend to charge monthly fees (even for basic current accounts) [comparison], but you get additional services in return:

  • Employees you can talk to in person, who can give you financial advice or help you with everyday questions concerning your finances
  • These accounts often include perks (e.g. mobile phone insurance, discounts at local businesses)
  • Bank branches (with facilities for depositing cash, having a bank safe, etc)

Some banks reduce or waive the annual fee if a minimum amount of money is transferred to the account each month (e.g. your salary).

Conversely, online-only banks don’t provide as many services, and require you to do many more things yourself - but usually don’t have monthly fees.

Some banks charge fees and/or negative interest on money in your account, so make sure to check the information given when you sign up for an account.

Major consumer physical banks include:

  • Commerzbank
  • Deutsche Bank
  • Sparkasse
  • Postbank
  • VR-Bank

Major online-only banks include:

  • N26
  • Ing DiBa
  • DKB
  • ComDirect
  • Consorsbank

All banks have online banking. The vast majority of banks do not have customer service in English. N26 offers full service in English. Deutsche Bank offers most of its service in English, but some correspondence is still in German. Commerzbank and Sparkasse offer online banking in English. [source]

Accounts

A current (checking) account (designed for all your daily financial needs) is called a “Girokonto”. This is the account where your salary would be deposited, and which you would use to pay your daily expenses. Additionally, most banks will also offer you various forms of savings accounts, the most common being a “Tagesgeldkonto”, which is a simple and flexible savings account (although given the very low interest rates at the moment, you won’t get much in the way of interest).

Withdrawing money

Given how prevalent cash is in daily life in Germany, you will want to carry at least some cash around with you. The easiest way to withdraw cash is through ATMs (“Geldautomaten”). Withdrawing from your bank’s ATMs using your debit card (Girocard) requires you to enter your PIN and is free; withdrawing cash from other banks’ ATMs costs a small fee (usually around 5 € per withdrawal). Withdrawing cash with other cards (e.g. credit cards) usually costs a fee, although some banks offer free withdrawals here as well.

The withdrawal fees can make a huge difference in monthly cost between banks. N26, Comdirect, DKB and ING DiBa have free withdrawals. Other banks charge you for using ATMs from other networks. The biggest network is the Sparkasse network with 45% of ATMs in Germany. [source/fee comparison]

Additionally, in many larger shops (e.g. supermarkets) you can get cash back when you pay (e.g. you buy 20 € worth of groceries, charge 70 € to your debit card, and receive 50 € in cash as change).

Cards

Your bank account will come with at least one bank card, and you can usually have more. The following card types are common in Germany:

  • Debit cards. Any amount paid with this card is immediately debited from the associated bank account.
  • Charge cards. Any amount paid with this card is automatically debited from the associated bank account at the end of the month.
  • Prepaid credit cards. The owner transfers money onto the credit card’s account, which is then debited when the card is used to pay for something.
  • Classical credit cards (also called “rolling credit cards”). Any amount paid with this card is tracked as debt, and any debt which isn’t repaid by the end of the month (most cards require a minimum monthly payment) accrues interest.

The cards you will typically have are:

  • A Girocard debit card (also called an “EC card”), which is your main card for cashless payments. This card is almost always free. Note that N26 is the only major bank which doesn’t issue a Girocard - instead, they give you a Maestro debit card, which is somewhat useful, but not as universally accepted as a Girocard.
  • A credit card, which you would commonly use for online shopping and payments outside the Eurozone. This card often (but not always) has an annual fee. Most banks will offer you a charge card; classical credit cards exist, but are comparatively rare. Both of these cards are generally only given to people with a good Schufa score (credit rating); for other people, prepaid credit cards are an option. If you don’t necessarily want to use your bank’s credit card, you can use a comparison shopping site like Cardscout to compare offers - however, for credit cards without a monthly fee, make sure you understand the fine print to avoid paying unexpected fees.

Many cards will also have options for limited (limited to 25 €) contactless payment, and many banks let you connect your cards to smartphone payment systems like Apple Pay or Google Pay.

Credit cards with cashback or other benefits are fairly uncommon in Germany.

Opening an account

In order to open a bank account, you need:

  • Official ID (e.g. passport or ID card)
  • Registration (Anmeldung confirmation, or Meldebestätigung), which you receive after you register your address with the local authorities - if you don’t have one yet, some banks (Commerzbank, N26, DB) can make an exception and let you open an account.
  • Proof of income (only if the bank requests it) - Some banks like Deutsche Bank remove the monthly fees if you make above a certain amount.
  • Visa, Aufenthaltserlaubnis, or other proof that you are allowed to live in Germany (only for non-EU citizens)

Opening a bank account at a physical bank is straightforward - call them for an appointment and show up with the paperwork at the branch. For online-only banks, you will need to authenticate yourself (prove that you are who you say you are) - this can be done by either VideoIdent (a video chat with someone who checks your ID documents) or PostIdent (you take a form and your ID documents to a post office and let the clerk authenticate you); your bank will give you details. Some countries are not supported by PostIdent, or by the in-app document validation [source].

Opening an account takes, at most, a day or two - although since bank cards are sent via mail they can take a few days more to arrive.

Daily operations

Transfers

All transfers within the Eurozone use the SEPA transfer system, which is free and fairly quick (1-2 days). To transfer money to another account, you need the BIC and IBAN numbers for the target account; you can transfer the money through online banking or by filling out a form at a bank branch. You would use a SEPA transfer for nearly every money transfer, e.g. to pay bills and fines - the BIC/IBAN numbers will be listed on the bill, as will the reference you must include as a note when transferring the money. Some bills come with a pre-filled SEPA transfer form, which you can take to a bank branch, or copy the information into your online banking website. Bank transfer is also the most common way you will receive money - for example, your salary or your tax reimbursement will be sent to your account by bank transfer.

You can also set up recurring transfers (this is the most common way of paying your rent, for example). Due to the ubiquity of the SEPA transfer, it’s also used to send money to friends (which may be performed with, e.g. a smartphone app or a third-party payment service, in other countries).

Direct debit

The second main way of paying is through a SEPA direct debit (“Lastschrift”). Here, the recipient (e.g. the store you bought something from) sends you a direct debit authorisation form (“Einzugsermächtigung”) to sign, by which you tell them your account number (BIC/IBAN) and give them the right to collect money from your account. Once they have received the signed form, they can debit the money you owe them from your account, even in the future (e.g. for your monthly electricity bill). While this sounds, at first glance, to be a major risk to you, in practice there is very little fraud using this system, as you can reverse any debit made from your account within 45 days (so check your bank statements semi-regularly just in case), and the payments are easily traceable.

If, in the future, you switch bank accounts, you must contact all parties you gave a direct debit authorisation to and tell them your new bank details. Your (new) bank will generally help you by pre-generating the letters and extracting contact details from your bank statements.

People from other countries often balk at giving other people their bank account number, but in Germany, this is completely normal. As it’s so easy to reverse fraudulent transactions, you can give other people (e.g. your landlord) your bank account number without fear that money will be stolen from you.

Other payment systems

Other commonly used payment systems:

  • Online transfer systems like PayPal
  • Sofort-Überweisung, a middleman transfer system, whereby you give them your online banking login details (something that is prohibited by many banks)
  • Some online sellers accept “Nachnahme” as a payment method, whereby you pay the postman/woman when they deliver the package to you (although this usually costs extra).

Cheques are almost never used in Germany.

Depositing cash

If you have excess cash, you can deposit it at a bank branch (depositing at a bank different from your own usually costs a small fee) or through certain ATMs. This is a notable limitation for online-only banks, as they tend to have very limited possibilities for depositing cash. Comdirect lets you use the Commerzbank coin deposit machines, and N26 has Cash26 points, but other online banks can make it difficult. You can also return coins for free at the Bundesbank (source).

Some supermarkets also have machines that accept loose coins and will give you either notes or a voucher you can use to shop in that store, but these usually charge a hefty fee.

Overdraft and loans

If you have a regular income and a good credit rating, then you can ask the bank for an overdraft (“Dispokredit”), whereby your bank balance can go (temporarily) negative. Note that the interest rates for using your overdraft are rather high. Additionally, most banks can offer you a number of different loans (targeted to different uses - e.g. buying a car).