Banking and Money in Germany
There’s a few things newcomers in Germany should know about German debit cards, online banking, overdrafts loans etc.
How long do national and international bank transfers take?
Which is the best bank for foreigners in Germany?
Are there any bank accounts that do not charge a monthly fee?
Before rushing ahead and opening an account at a random bank, here’s ten facts you should know about banking in Germany.
1. Do I need to get a German bank account?
Well, it’s nowhere written that you’re obliged to get a bank account in Germany.
If you have a bank account in the Eurozone already you use your IBAN and BIC number for receiving and sending payments.
Nevertheless, I strongly recommend you to get a German bank account once you move to Germany.
Why? Well, there are many agencies and institutions that will ask for a German bank account number. For example, your employer…
Believe me, having a German bank account will make your life a lot easier.
2. Can anyone open a bank account in Germany?
No, not everyone can open a bank account in Germany.
You need to register in Germany first in order to be able to open a German bank account.
And in order to register in Germany, you must have a rental contract/agreement…
Once you register in Germany you get a registration confirmation (Meldebescheinigung).
Normally you must provide this confirmation when you open an account in Germany!
So make sure to keep this document in a safe place and ready at hand when you open a bank account.
Update 2017: If you are an EU-citizen you can still open a bank account with Number26 in Germany. This is the first ‘European bank’ of this sort, where you can have a German IBAN (bank account number) although you are not registered in Germany. This is ideal also for those that have not registered in Germany but need a German bank account number! Open a N26 account now for free.
3. I don’t speak German. Which is the best bank account in Germany for me?
There are three equally great options to open a bank account in Germany.
My favourite option is N26, also called Number26.
Why? It is all in English. Like everything. Starting from the application form. To the quick video verification that you do after you have submitted your personal information online. It is also the quickest way to open a bank account. This is because you do not have to go to a bank. The bank is all online. You can ring someone. You can chat with them. It is all modern and digital. This is also the case for your banking.
With your online and mobile apps you can block your Mastercard within seconds if it gets stolen. Or you can send money to your friends via text or email. You can also make the quickest international transfers. This is because N26 is partners with TransferWise.
So if you make international money transfers from time to time this is really great stuff. As you can see I am a fan, haha. The best thing about it is that it is entirely free. Unless, of course, you want to get the fancy black Mastercard, which comes with free travel insurance, and costs you 5,90 Euro a month.
Deutsche Bank – always a safe option.
If you don’t speak any German at all and wish to remain independent concerning your financial affairs, then you should get a bank account at Deutsche Bank. It may be more costly, but they offer you all services in English – apart from the application form and the mobile banking. Every Deutsche Bank branch has at least one employee that speaks English.
The customer hotline has English employees, just ask. They have branches all over the world. Online banking is also available in English. And you can be sure that it won’t go bankrupt – after all it’s Deutsche Bank.
A friend of mine invested in a pension insurance at Deutsche Bank (which is like a life insurance: you pay in money every month, and when you’re about 65 years old, you get a monthly pension payment). This pension insurance is internationally valid, which means that even if you live in another European country later on, Deutsche Bank will transfer the money to your future bank account. Lastly, Deutsche Bank also offers online and mobile banking in English.
Other free online accounts – some level of German necessary…
There are also so called ‘online banks’ like Comdirect and DKB, which have no physical branches. They are online accounts. This is very common in Germany. You do all your banking online.
The advantage of online banking is the following:
You get a VISA card. With this VISA card you can get free cash from any cash mashine in Germany and world wide. This is not the case for other banks. For example, if you have an account at Deutsche Bank, you must go to Commerzbank, Postbank, Deutsche Bank, Berliner Bank to get free cash withdrawals.
If you go to another cash machine, you pay a fee. Another example. At Sparkasse, you can only withdraw money at Sparkasse cash machines for free – you have to pay up to 5 Euros fees, if you withdraw money at another cash machines.
4. Which documents do I need to open a bank account in Germany?
To open a bank account online you must have the following documents:
- your passport
- your registration confirmation (Meldebescheinigung)
In some bank branches they also ask for these documents:
- potentially a pay statement from your employer (depending on the account type)
- potentially your work permit, if you have one.
5. What kinds of bank cards do Germans use?
The most commonly used bank card is a debit card, called “EC-Karte”. You can use it in most shops.
You can also get cash from cash machines with it. Be careful though: some banks charge you if you don’t get cash at cash machines belonging to your own bank (see the paragraph above).
For the EC-Karte you will receive a four-digit secret pin sent to you in a separate letter from the card itself. In shops, sometimes your signature is required to verify your identity, and sometimes the pin number. In addition to the EC-Karte, the VISA-card is also used in Germany, however, not nearly as much as the EC-Karte. This is because you’re usually charged for VISA-card payments in shops, for detailed information on this you should check with your bank. Most people do use their VISA for online payments.
Note that using cash is still very popular in Germany! Especially smaller places like cafes and small bistros will not accept any cards.
Many banks also issue MasterCards and VISA cards. If you use Mastercard or VISA card, you usually pay a fee with every purchase. That is why it is normally cheaper to pay with cash or an debit card (EC-Karte). Number26 is for example based on the business model that it offers free bank accounts, but then it charges you through you Mastercard payments. What does this tell us: Whenever something is advertised as ‘free’ it often has lots of hidden charges. At least with banks like Deutsche Bank and DKB you can be sure that there are no hidden fees.
6. My bank doesn’t want to give me a VISA card and an overdraft loan! Why?!
If you’ve never lived in Germany before and you don’t have a Schufa (SCHUFA is the credit rating system used in Germany), you may not get a credit card and an overdraft loan right away.
This is because banks first wants to check whether you generate any income.
Once you’ve had a regular income for about three months, the bank usually grants you a credit card and an overdraft loan depending on the amount of your salary.
DKB is an exception to this. It automatically grants you 500 Euros overdraft. This overdraft increases once you have a regular income.
7. Is there a German bank account that is for free?
Most banks in Germany charge a small fee for basic cheque accounts. Among the biggest bank in Germany are Deutsche Bank, Postbank, Commerzbank, Sparkasse and the Volksbanken. They all have branches where you can go to in person.
Do students pay a bank fee?
No. If you are a student or under 18, there are generally no fees at any of these banks.
Why are online accounts so popular?
Most online bank accounts in Germany are for free. That’s why. For example, DKB or Comdirect. Number26 is also for free.
Why are they for free?
Having a free bank account means that basically you cannot walk into a branch for support. You have to call a hotline if you need assistance. The most common and popular online banks in Germany are Comdirect and DKB. They offer completely free accounts and free credit and debits cards, as well as free cash world wide. N26 offers 5 free cash withdrawals a month – no matter where in the world you are!
These accounts of course have some hidden fees, for example, if you lose your card or need a new pin, they charge quite considerable fees for that. So make sure not to lose your cards.
Which online banks offer a free overdraft?
If you open an account with DKB, you automatically get 500 Euros overdraft. If you get a regular income, this overdraft increases. With N26 you normally also get a free overdraft.
8. Online banking in Germany – how does it work?
Depending on the bank you choose, you will usually receive the following in separate letters: a debit card and pin numbers, an online banking login number, an online banking pin number, a list with so-called “TAN” numbers (unless you opt in for ‘mobile TANs’), and sometimes a card scanner. Using the login number and the pin, you can log in to your bank account online. There you can see an overview of your account status, previous payments etc. You can make bank transfers using the TAN number: for each transaction you will be asked to enter one of these numbers on the TAN sheet. Since 2014 most banks require the name of the account holder, the IBAN and the BIC number, as well as a reference for the transfer.
More and more banks use a digital ‘TAN’ number these days. Using a mobile phone app you can generate a unique TAN number whenever you make an online transfer. This method is arguably more secure than the conventional paper based TAN number. It also makes you more mobile as you may not always have the paper based TAN number at hand!
Update: Most banks now offer mobile banking with a so-called Photo Tan or Push Tan. To use this function, you have to download your bank’s app in the appstore / Google Play. If you are at DKB, download ‘DKB online banking’ and ‘DKB push tan’. Usually it is enough to type in your bank’s name into the Appstore. In my opinion, this is the easiest and fastest way to transfer money online.
How does it work?
You open the online banking app. You enter the details of the money transfer. A field appears, which asks your for a TAN number. Click on a button, which says ‘use Photo Tan’ or ‘Push tan’. Then the other app should automatically open. You must enter a password. Then a unique TAN gets generated. It gets automatically transferred to the other app. Now confirm all the data. And then your online transfer is done. Completely paperless.
9. How long does it take to transfer money between different bank accounts in Germany?
If you transfer money between accounts belonging to the same bank, then your money will arrive on the other account on the same day you’ve sent it.
However, it takes between one and three working days, if you transfer money to a different bank. This is one of the longest durations within Europe. It can be quite annoying. But there is no way around it. Sorry!
10. How do I send money abroad and how long does it take?
If you send money with your German bank account within the Eurozone, it usually doesn’t take longer than 1-3 working days.
If you want to send money abroad, a quick way of doing it is TransferWise. I recommend TransferWise, if you want to transfer money between EU and non-EU countries.
You save up to 90% in comparison to common bank transfers and other money transfer services. With Wise you just use your debit card or a normal bank transfer. What they do is they match you with people sending their money in the other direction. As such, in theory your money never leaves the country. The money arrives in 1-2 days.
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