One of the first things you have to do when you move to Germany is open a bank account. You have money, you’re an upstanding citizen, it should be easy – right? Not so fast.

Expat How To Guides for Germany > HOW TO OPEN A BANK ACCOUNT IN GERMANY

As with so many things in Germany, opening a bank account usually includes enough paperwork to make you bemoan the naïve soul who thought it’d be “fun” to move to Germany. (But see “A Non-Traditional Banking Option” below for an alternative.) A German bank account really is necessary to rent a flat or house, get a phone, receive a pay check, or conduct business. It is unavoidable. Our guide on how to open a bank account in Germany will help you make the process einfach (simple).

A Non-Traditional Banking Option

New arrivals in Germany often find it difficult to set up a traditional bank account. But even non-residents, brand new expats, and other non-Germans have a good option that they are often unaware of. Even in Germany, banking is changing, and you may want to think out of the box. Ask yourself: Do I really need a brick-and-mortar bank branch in the age of smartphones and online banking? Some people do, but do you?

Consider a banking alternative in Germany (and Europe) that is available to you regardless of your citizenship or where you live. TransferWise is a convenient and cheap banking alternative for expats, even before they are expats! You can create a free account online in minutes, giving you a personal or business bank account that allows you to send and receive euros and other currencies for far less than regular banks.

If you’re in a situation in which you need to manage more than one currency (U.S. dollars, euros, British pounds, Australian dollars, etc.), TransferWise is a great option. With a TransferWise account your money will always be converted at the mid-market exchange rate, at a cost that is up to eight times cheaper than traditional banks. You can also hold a variety of currencies for free until you need to use them.

Open a TransferWise Account

Germany’s Cash Culture

Let’s start with the basics. Austria and Germany, as part of the EU’s euro zone, use the euro (EUR). This currency is used throughout most of Europe, but not in places like Switzerland with their fancy Swiss francs (CHF).

Also see Online/Mobile Bank Accounts below.

While in Germany, you need to get your hands on actual banknotes and coins. Cash, or Bargeld, is king. For a place with such an established banking industry, the Germans seem to have a deep distrust of credit and money not in hand. (Might have something to do that crazy hyperinflation after WWI). Even today, most everyday purchases are made with cash. Everything from a Wurst (sausage) to a new iPhone may require a cash payment. For Americans used to buying a pack of gum with their card, Germany’s cash culture can seem stifling.

Because of this, ATMs are plentiful in city centers. They are marked by credit card logos or have the German word for cash machine, Geldautomat. Almost all can be operated in English, German, and a few other languages. In Austria, ATMs are called Bankomats.

Germany’s three major banks – Deutsche Bank (and its subsidiary Postbank), Commerzbank and Hypovereinsbank – cooperate as the Cash Group, which means ATM withdrawals are free if you bank with them and use their ATMs. Other ATMs may charge as much as 5 euro per withdrawal. Other banks, like DKB and N26, offer free cash withdrawals as long as the machine doesn’t require a fee.

For larger payments, people rely on an Überweisung (money transfer). You used to memorize your important bank numbers like your account number (Kontonummer) and bank routing code (Bankleitzahl) with pre-allocated TAN codes used for online transactions.

This practice changed with the introduction of the Single Euro Payments Area (SEPA) in February 2016. SEPA establishes a uniform set of rules regardless of location within the EU (plus 5 countries outside of this area). With SEPA, there is no differentiation between national and cross-border euro payments. SEPA also uses an account number and bank code, but these have been updated to IBAN and BIC code or SWIFT code, respectively. Today, German personal bank accounts must have IBAN account numbers. Transfers usually take about one business day and are free to complete online. TAN codes for online banking are now generated on the fly using a small electronic device provided by your bank.

International Money Transfers A bank is seldom the best place to use to transfer money internationally, especially for big-ticket items such as a home purchase or a business transaction. TransferWise can save you a lot of money compared to banks. Also see our article on International Money Transfers for transferring funds to or from Germany.

Germany’s cash culture is – slowly – changing. Most banks now issue a Girocard (“girocard,” formerly an EC card) for cashless payments. This works like a bank debit card, with more places than ever taking cashless payments. Chip-and-PIN debit cards (girocard, Maestro [MasterCard], V Pay [Visa]) are accepted by most merchants these days, even at places that don’t accept credit cards.

Although credit cards are becoming more popular in Germany, they are still far less common than in North America. Credit card fees range greatly, with free cards requiring more expensive accounts, and banks may only offer this option after several months of good credit. The amount of credit is usually in relation to your monthly income. And a German “credit” card doesn’t really work like a US credit card. Whatever amount you charge in a given month will automatically be withdrawn from your bank account by the bank at the end of the month. So your credit (loan) only lasts for a month or less.

Expats will want to have a German debit card for normal, everyday purchases at the grocery store and at other places. Still, be prepared with backup cash for everything from a restaurant meal to a hotel.

Selecting a Bank • German Bank Accounts

Most German banks are of high integrity and offer similar services, but fees vary widely and some are much friendlier to expats. The number of branches and their location may be an important factor in choosing a financial institution. Online banking also is becoming very common, as well as mobile apps. Do your research to find the right bank to suit your needs.

Types of Bank Accounts

There are two basic types of accounts in Germany:

• Girokonto – current account, similar to a US checking account but without checks
• Sparkonto – savings account

Most financial transactions are completed using a Girokonto (via a debit card or a money transfer, an Überweisung). Unlike in France and the United States, Germans don’t write personal checks. Most of the time, a Girokonto includes a girocard, the German version of a debit card. Mosts banks charge a monthly fee for this service, although it may be waived if you keep a minimum account balance. For example, Sparkasse charges a fee of 4 euros per month if the total account balance averages less than 3,000 euros per month. These accounts do not earn interest but allow you to pay by girocard and use an ATM.

A Sparkonto is often opened at the same time as a Girokonto and allows you to save money and earn interest. However, interest rates for a savings account tend to be low, even lower than in the US.

Note that university students may be entitled to special student accounts that are exempt from account charges (Kontoführungsgebühren) if they qualify. There are some restrictions on these accounts, such as an age limit of 29.

Expat Banking Tip Yes, you do need to open a German bank account, but it is also wise to maintain access to at least one home-country bank account. That allows you to pay bills and access funds back home. It’s a small world after all.

How to Open a Bank Account in Germany

Some banks cater to an international crowd, while others are reluctant to provide services or paperwork not in German. You also have a choice of a bank or a savings association (Sparkasse, Raiffeisenbank), and each type has its own advantages and disadvantages.

To open a personal bank account in Germany, you should provide:

• A valid passport with a current German residence permit
• Anmeldung (registration)
• Completed application with personal info: name, age, nationality, address, income, etc.
• Initial deposit (minimum amount depends on the bank)
• Proof of income/employment, a letter of recommendation from your employer, pay slips, etc. (The more of these you have, the better your chances of receiving a full-service account.)
• SCHUFA credit rating (optional, although it may be required at some banks)

Another thing to consider when opening a bank account is if your home bank has a partner in Germany. Deutsche Bank and Bank of America are partner banks and offer low-cost/free transfer services.

Opening an Online Bank Account
You also have the option of opening a German bank account online. To verify your identity you may need to use a webcam, verifying code sent by email, or going to an approved subsidiary like PostIdent. PostIdent requires you download an identity verification sheet from your bank’s website and present it at your local post office with your passport. Your documents are signed and sent to your bank. The bank usually pays the fee for this procedure. Yet another option is to have a lawyer or notary complete the process for you.

Online-only banks serving Germany include DKB Cash, 1822direkt, N26, O2 Banking, Santander, netbank, and a few others. Each has its own advantages and disadvantages. For instance, N26 is the only one with English-language support and a cool app, but it does not offer a debit card with its free account. (You do get a MasterCard. The N26 Black account offers a debit card and more for a low fee.) See the online bank links below to learn more about each online bank and the accounts they offer.

Some banks are reluctant to offer accounts to foreigners, or may require a minimum amount of time holding an account before allowing you to hold a credit card. Others require a minimum income to open an account. Some nationalities also need to undergo a verification by a home bank. A customer representative should be able to guide you through this if it is required.

Cards and documents will be sent to you through the mail once the account is opened.

German Banking Glossary

• Bargeld – cash
• Anmeldung – registration
• Pflichtfeld – required field (on a form)
• Kontoinhaber – account holder
• PostIdent – The post office will verify your identity to open an account. This is popular with online banks.
• Sparkonto – savings account
• Girokonto – checking account
• Sperrkonto – locked account used for foreigners to acquire visas. This is to prove they have sufficient means to stay in Germany.
• EC-Karte – The now outdated term for a Girocard (see below)
• girocard – A German bank debit card accepted by most German retailers and businesses
• TAN codes – special transaction codes that you use online to verify payments from your account
• Kontonummer – account number (now international IBAN)
• Bankleitzahl (BLZ) – bank routing code (now BIC/SWIFT)
• Studentenausweis – student ID
• Kontoführungsgebühren – bank account fees; waived with student status
• aktuelles Nettoeinkommen pro Monat in Euro – current monthly net income in euros
• Disposition Kredit (DispoKredit) – overdraft protection (loan); usually requires a premium account
• Zinsen – interest (paid by you or to you)
• Überweisung/Geldüberweisung – money transfer

German Banks and Saving Associations
German financial institutions are generally open from 8:00 until 16:00 and may have one night per week with evening hours. Conversely, some banks – such as DKB or N26 – are online-only with extremely limited or no storefronts. Even many “normal” bank branches are fully automated, with no tellers or teller windows. There may be a few humans on hand to assist customers, but all deposits and withdrawals are done by machine. There are even fancy machines into which you can feed euro banknotes, which are automatically counted and totaled. You then take your printed receipt, and go on your merry way.

Major Financial Institutions in Germany

• Citibank no longer offers retail banking services in Germany. Citi Germany, with offices in Frankfurt, is part of Citi’s Institutional Clients Group (ICG). Citi Germany serves companies, institutional investors and government agencies.
• Comdirect – This online bank is a subsidiary of Commerzbank. It offers a free Visa credit card and sign-up is easy and the credit card allows you to get cash out of machines in Germany and abroad for free. It is also the only German online bank that does not require German residence or a German postal address.
• Commerzbank – One of the largest banks in the country, it has an extensive branch network dedicated to consumers. It offers a free bank account including a girocard (but not credit card) if you open your bank account online, as well as premium accounts that offer two debit cards and travel insurance. This bank is highly rated with above average customer service and regularly offer promotions for new sign-ups. Their site is available in English.
• Deutsche Bank – Germany’s largest nationwide bank is also one of the most well-known internationally. They offer a range of services like specific accounts for students and for accountants/lawyers or other professionals that hold client money. As mentioned before, their partnership with Bank of America can make for easy money transfer for customers.

• DKB – Deutsche Kredit Bank is ideal if you like no/low fees and are comfortable doing all your banking online. It offers a free account, ATM withdrawal (unless that machine charges a fee) and a free Girocard. If you have an issue, you can call or email customer support. Note that in recent years DKB has become more stringent in their requirements and may require a certain level of income.
• HypoVereinsbank – Another large bank across Germany, they are part of the international Italian banking group Unicredit. There are a range of accounts and online services with Konto Klassik free of charge if a minimum of 1,500 euros is deposited every month. The site is only available in German.
• N26 – A relative newcomer, this Berlin-based online bank caters to the expat market with an English interface. It is quick and easy to sign up for a free or paid account with its own smartphone app. N26 also plans to begin operation in the US and the UK. For more see this GW page: About N26 – The Mobile Bank
• Netbank – An online bank with a respectable history. Allows customers to use any ATM for free.
• Postbank – Once the biggest retail-customer bank in Germany, it is now owned by Deutsche Bank. Postbank Giro plus offers a free Girocard bank card and a free Girokonto if you maintain a minimum of 1,000 euro a month auto-deposited into the account. They also have a large ATM network.
• Sparkasse – Sparkassen are run as a non-profit public service with many branches and ATMs throughout Germany. Each large German city has its own Sparkasse. For example, Berliner Sparkasse is the largest retail/consumer bank in the city. However, they do have high charges for non-Sparkasse ATMs.

Another banking alternative:

• TransferWise – As we mentioned above, London-based TransferWise is an excellent alternative to traditional banking, offering free Borderless Account banking in multiple currencies. You can create an account online in minutes, giving you a personal or business bank account that allows you to send and receive euros and other currencies at rates far below regular banks. > Learn More

This HOW TO guide was written by Erin Porter.

More | Expat How To Guides for Germany

Related Pages
AT THE GERMAN WAY

• About N26 – The Mobile Bank – N26 was founded in Berlin by two Viennese who wanted to provide a new kind of banking.
• Banks and Money – About the German way of banking
• International Money Transfers – Advice on transferring funds to or from Germany and around the world
• Expat How To Guides for Germany – Step-by-step guides for many topics related to living and working in Germany
• Living in Germany – For expats in German-speaking Europe

ON THE WEB

• German Online Bank Account Comparisons – A quick comparison of online banks in Germany from Settle in Berlin, the galaxy’s most comprehensive and simple guide to getting settled in Berlin and Germany
• Germany.info – The website of the German Embassy in Washington, DC has a lot of good information for Americans living and working in Germany.

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