Money

German Bank Accounts

Germany's banking sector is famous for guarding the savings of the Mittelstand, the nation's massive, financially conservative middle classes. Not known for flashy marketing or risky products, Germany's banks tend to be divided into savings banks (or Sparkassen), regional banks (Landesbanken), cooperative banks, and multinational private banks. But which type should new arrivals choose, and what is the best bank to use? Let's investigate the basics to help you hit the ground running.

How to open a German bank account

Opening a bank account in Germany isn't usually a difficult task.

In fact, knowing the value of solid savings and a good credit rating, Germans have gone out of their way to make the process streamlined and efficient.

Before you can open a bank account in Germany, you'll need to satisfy certain requirements. For starters, applicants must be aged 18 and over. Now comes the slightly trickier part. Individuals who come from outside the European Union must provide documentation which proves they are registered as German residents, and that they have a valid work permit.

What do I need to open a Bank Account in Germany?

These requirements mean that a little work will be involved when you start an account. However, the various stages aren't hard, and you should have most of the documents required. To set you on your way, here's a breakdown of things needed to open a bank account in Germany:

  • Your passport
  • A valid German visa
  • Any documents showing that you are enrolled on a university course or employed in Germany
  • Your Meldebescheinigung (documents confirming your German address). This can be obtained by making an appointment at your local Bürgeramt - which functions like a town or city hall.
  • Some banks may also request documentation showing a regular income, such as your last three pay slips.

Once you have these documents, you can head to a local bank branch and start filling out forms.

However, nowadays the best place to open a bank account is definitely online.

For example, the mobile bank N26 simply requires your name, birth date, and German address. After that, you need to supply the "supporting ID" listed above, and then your account can be created instantly. The whole process is designed to take 8-10 minutes.

The same applies with Monese, another popular mobile banking app. Again, users just download the app, submit a few personal details, and then add their ID information. Within a few minutes, you can be up and running, depositing Euros as with any normal account.

Note for non-EU nationals

Non-EU nationals should note that they will need to be resident in Germany before using these mobile apps. EU residents can create accounts from abroad before moving to Germany, but for Chinese, Indian, or US visitors, it will be necessary to make arrangements after arrival.

Mobile banking isn't the only option, of course. Many arrivals like to visit a nearby bank branch to meet the staff and discuss their accounts. These accounts often deliver more complex features like credit cards, overdrafts, and may suit self-employed workers and families.

There's nothing to stop people using both mobile banks and conventional banks. In fact, that's a very common option for expatriates as they navigate Germany's financial system.

Types of bank accounts in Germany

Banks in Germany offer a range of different accounts for expatriates, and there are numerous types of bank to choose from as well. We can't cover them all here, but it helps to provide a short introduction.

Most arrivals will want to create what is known as a Girokonto. This is essentially a checking account and can be provided by various forms of bank.

For instance, you may find that cooperative Raiffeisenbanken are the best banks for checking accounts, or you might opt for a Sparkassen (shareholder owned savings banks). Then there are big international banks which offer Girokonto for foreign residents.

English language banking apps

Mobile banks such as N26 offer English language apps and attractive fees, as do "direct banks", such as DKB or ING-DiBa. These businesses don't operate their own ATMs or branches, but use the infrastructure of other banks. This lets them reduce their fees considerably.

Applicants must be sure to check the Kontoführungsgebühren (account fees) when making a decision, as they can bump up the cost of banking quite a lot in some cases.

Can I have two bank accounts in Germany?

Germans aren't restricted to a single bank account. While it's advisable to set up a Girokonto to handle income and savings, this account often functions alongside a Sperrkonto (blocked account). That way, students can receive their monthly payments and add them to work income or payments from abroad.

Some people may want one account which offers advantages for international money transfers, as well as a Sparkassen account which guarantees good ATM access anywhere in Germany. You won't always find an account with the features you need, and there's nothing wrong with shopping around. There's no limit to how many bank accounts you can use, so find a mix that works for you.

Which bank is the best bank for students in Germany?

Students may prefer to open a bank account with no deposit required, and tend to gravitate towards banks with low fees and good international features, as well as strong mobile apps. These features tend to rule out traditional banks, which have been challenged by specialist student providers.

Direct banks may offer incentives for students to sign up, such as a free Visa card, global cash withdrawals, and the chance to create a bank account with no fees. Others offer a similar package based around a free MasterCard, while Targobank, ING-DiBa, and PostBank all offer free accounts that are easy to set up and offer excellent ATM coverage within Germany.

Bank transfer

Transferring money from abroad and between German banks could be a headache for expatriates, but it doesn't have to be. German banks know that easy transfers are a major selling point and way to serve their customers, so they tend to make the process relatively hassle-free.

How do I transfer money to a German bank account?

Making a domestic transfer (Überweisung) between German bank accounts isn't complex at all. To do so, use your bank's online banking portal or visit a local branch. You will need the account details of the receiving account. So, if you are paying your monthly rent, be sure to request these details from your landlord.

Even better, you can set up a standing order (Dauerauftrag) which transfers a set amount of money at regular intervals. For variable transfers such as phone bills, you can also set up direct debits called Einzugsermächtigung.

PayPal

Services like PayPal are widely used in Germany as well, and can be the easiest way to shift money between accounts or manage self-employment income.

How long do bank transfers take in Germany?

Most bank transfers in Germany won't be instantaneous. If you need to make a payment by a certain date, be sure to leave a couple of days leeway. Transfers will typically take 2-4 working days, from the moment you hand in the form to bank cashiers, to the money lying in the receiving account.

What is the fastest way to transfer money?

If you are in a hurry, try online payment portals. Because they remove a layer of paperwork, they can be much quicker than traditional transfers. One option is to use the online banking portal provided by your bank. Many direct banks and even saving institutions offer this facility.

Apps like Monese and mobile banks such as N26 make transfers even faster. It may be sensible to match up a standard Girokonto with a mobile-based account. That way, you can respond rapidly to demands for payment, and avoid any missed deadlines.

What is the cheapest way to transfer money internationally?

If you are transferring money from an EU-based bank with an IBAN code, transfers will be free and easy. For non-EU nationals, fees and delays could be involved, but specialist transfer services exist to make the process simpler.

TransferWise is probably the cheapest and most popular method. This mobile-based service can be connected to online banking services like PayPal, and will convert foreign currencies into Euros, before depositing them into your German account.

When you sign up, you'll need to provide some basic personal details, including your full German bank details. Beyond that, all that's involved is a swipe of the smartphone screen.

TransferWise

Expatriates often mix TransferWise with mobile international banking companies like N26. In fact, N26 may be the best international bank account for new arrivals. With free withdrawals worldwide, English language support, and an alliance with TransferWise to reduce transfer costs, it's an appealing option for foreign German residents.

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