Best 10 Facts - Money and Banking in Germany

If you’ve just moved to Germany for long term or only temporarily, you will need at least some basic knowledge about bank accounts, online banking, debit cards and loans, just to mention a few. How long will you have to wait for an international or national bank transfer? What is the best German bank for immigrants? Do all German banks require a monthly fee? Here are ten important facts you should know before opening a bank account in Germany. Find out what banks and services you should avoid, learn about hidden fees that will cost you an arm and a leg in the long run and discover the safest and trustworthy German banks.

1. Do Foreigners Need a Bank Account in Germany?

Once you’ve moved to Germany, no one will force you to open a German bank account. If you already own a European bank account, you will be able to use your BIC and IBAN in order to make and receive payments. Opening a bank account in Germany is optional and many foreigners live without one for years.However, opening a German bank account can be highly beneficial. Many institutions will ask for a German bank account number whenever you need to make any sort of transaction. A bank account opened in Germany oftentimes makes things go smoother and faster.

2. Who Can Open a German Bank Account?

Not anyone will be able to open a bank account in Germany. Foreigners will have to first get registered in order to open an account with a German bank. For registering in Germany, immigrants will need a rental agreement or contract. The registration confirmation, called Meldebescheinigung, is required upon opening any German bank account. Keep the document safe and don't misplace it, as it is very valuable. Make sure to bring the Meldebescheinigung with you when you’re opening the bank account in order to prove your identity and status.

3. What Is the Best German Bank Account for Non-German Speakers?

Currently, foreigners can choose from three excellent options to make a German bank account. If you don’t know any German and you want to keep your independence in terms of finances, you should consider opening an account with Deutsche Bank. While they are on the pricier side, their services are all offered in English and each branch is equipped with at least one English speaking employee. Even the customer hotline has an English version and they have Deutsche Bank branches worldwide. With such a reputation, you can rest assured Deutsche Bank will never go bankrupt. They are reliable, trustworthy and always polite to their customers. On the other hand, you should be more careful with smaller, startup companies that aren’t registered, such as Number26. They might seem more convenient at a first glance, but they take advantage of their customers in the long run.

Deutsche Bank also offers pension insurance. This allows clients to pay a sum of money every month until they reach the age of 65 and then receive monthly pension payments. Since it’s valid internationally, their pension insurance plan can be accessed from any country in Europe later on. English mobile and online banking are also guaranteed by Deutsche bank. Foreigners might also find “online banks” useful. These don’t have physical branches but are online accounts that allow you to do your banking online and are very common in Germany.

With online banking, you get several advantages, like a VISA card. This card allows you to withdraw cash from any German or international ATM without paying withdrawal fees. In contrast, the vast majority of physical banks apply some sort of withdrawal fee. Deutsche Bank accounts only allow feeless withdrawals from Berliner Bank, Deutsche Bank, Commerzbank or Postbank. Drawing cash from an ATM from any other bank will imply paying a withdrawing fee. Sparkasse, too, only offers free withdrawals from their cash machines, charging up to 5 Euros when money is withdrawn from another bank’s ATM.

4. What Are the Necessary Documents for Opening a German Bank Account?

Foreigners will need the following papers in order to open a German bank account online:- a valid passport;- the Meldebescheinigung (registration confirmation).Some banks will also require:- pay stubs from your current employer;- a work permit, if applicable.

5. What Bank Cards Are Used in Germany?

Germans typically use an EC-Karte, which is a debit card that can be used in shops and for withdrawing cash from ATMs. However, withdrawal fees will apply when you don’t use your bank’s ATMs. The EC Karte comes with a 4 digit confidential PIN number sent in a different letter than the card. Shop transactions will either require your PIN number or signature in order to validate your identity.

The second most popular card after EC Karte is the VISA card. Payments made with this card in shops are usually charged according to your bank. Most Germans only use their VISA cards for making online payments, since no fee applies. Cash is not completely obsolete in Germany and many Germans still use it, especially in family bistros or small cafes that don’t accept cards.

The vast majority of the banks offer MasterCards and VISA cards. With these two, clients are charged a fee for every transaction, which makes paying with an EC-Karte (debit card) or cash more convenient. Beware of companies such as Number26 that claim to offer a free bank account. They will then charge you via your MasterCard payments, applying pricey fees for various transactions and services. Whenever you hear something is “free”, take it with a pinch of salt, as it might mean many hidden charges. DKB and Deutsche Bank don’t have any such hidden fees.

6. Why Are some Foreigners Denied an Overdraft Loan or a VISA Card?

Immigrants and foreigners who have just moved to Germany have probably never heard of SCHUFA. This is Germany’s credit rating system that plays an important role in offering or denying an overdraft loan or a credit card. Banks must check any income sources prior to offering clients any type of cards. Depending on your income, after three months of regular salaries, banks will typically grant you an overdraft loan or credit card. The only exception to the rule is DKB, who immediately grants clients a €500 overdraft which increases over time.

7. Are there any Free German Bank Accounts?

In general, all German banks will charge a fee for a cheque account. The most renowned German banks are Deutsche Bank, Commerzbank, Postbank, Volksbanken and Sparkasse. All of these offer physical branches for clients to go to in person.

Are Students Required to Pay Bank Fees?

Students under 18 years old are not required to pay any fees at the vast majority of banks.

Why Are Online Accounts Preferred?

German online accounts are so popular because they are free, like DKB and Comdirect. There are small exceptions to the rule, like Number26, which is no longer free and charges for withdrawals and other transactions.

Why Are these Accounts Free?

A free online bank account implies that there are no physical branches to offer assistance. Clients are required to call hotlines whenever they need support. DKB and Comdirect are the Germans’ favourite and most popular online banks. They provide free credit, debit cards, bank accounts and feeless cash worldwide. Additionally, their online banking and services are mostly in German.

However, many of these accounts come with hidden fees. If you forget your PIN number and need a new one or if you lose your card, for example, some banks will apply pricey fees. Make sure to keep your card safe!

Which Online Bank Provides Free Overdrafts?

Upon opening a DKB account, clients instantly receive a €500 overdraft that will increase over time, provided the customer has a regular income.

8. How Does Online Banking Work in Germany?

The process is similar to most banks. Clients receive separate letters with the PIN number and debit card, a login number for online banking, a PIN number for online banking, “TAN” numbers (but you can also select “mobile TANs”) and occasionally a card scanner. Logging in to the online bank account requires the PIN number and the login number. Here clients can check the status of the account and recent payments. The TAN number is used for making bank transfers. Each transaction requires a number from the list. The majority of banks also require the account holder’s name, the IBAN number, the BIC number and a transfer reference.

Nowadays, with so many electronic gadgets available, digital TAN numbers are becoming more popular. A unique TAN number can be generated by a mobile app for every online transfer. This method is secure, convenient and more environmentally friendly than old fashioned paper TAN numbers.

Many banks now offer a mobile banking option with Push TAN or Photo TAN. To access this service, clients have to download the application of the bank in the AppStore or in GooglePlay. DKB clients can download DKB Push TAN and DKB Online Banking. Any app is easy to find by typing the bank name in the search bar.

How Does the Online Banking App Work?

After installing the app, you have to type in the money transfer details. When prompted for the TAN number, press the Push TAN or Photo Tan button, which automatically opens the other app. After entering the password, you will receive a unique TAN number that is instantly transferred to the first app. The last step is to confirm all the data and your paperless online transfer is complete!

9. How Long Does a Money Transfer Between Different German Bank Accounts Take?

Transferring money between two accounts from the same bank will be completed on the same day. However, transferring money to another bank will usually take from 1 to 3 working days, one of the longest wait times in Europe.

10. How Can You Send Money Abroad and How Long Will It Take?

Foreigners and immigrants can easily send money abroad using their bank account in Germany. For a Eurozone destination, the money will take anywhere from one to three working days to transfer.

However, there is another way to quickly send money abroad. TransferWise is a great choice whenever you need to make money transfers between non-European and European countries. The service helps you save as much as 90% of your money when compared to other money transfer providers or common bank transfers. In order to use TransferWise, all customers need is a normal bank transfer or a debit card. TransferWise has a simple, straightforward and secure approach: they match transfers with others sending money in the opposite direction. By doing this, the money practically never leaves the country. The transfer reaches its destination in one or two working days.