Germany has long been recognised as a desirable place to live and work due to its global renowned Brandenburg Gates, beer culture, and bratwurst. In addition, the country's combination of conventional and alternative lifestyles, its excellent quality of life and its vast and varied economic sector make it appealing to many.
However, creating a bank account is one of the first obstacles non-residents confront, whether they are preparing to migrate to Germany or have recently arrived in the country. The good news is that you'll have a lot of flexibility and a relatively smooth experience if you already hold an EU passport or secure a residence permit in Germany.
This article provides a high-level overview of the process of creating a bank account in Germany as a foreigner, including a detailed examination of the many alternatives available to you at each stage.
Is It Necessary For You To Open A Bank Account In Germany?
While it may be convenient, opening a bank account in Germany is not required. However, you must have access to an account to initiate and receive monetary transactions. This might be a foreign bank account held with a bank with German operations or a German mobile bank. A checking or savings account that allows you to set up automatic payments, such as for utilities or German insurance, is required. If you want to get a mortgage in Germany, you'll need to show that you have a bank account there.
Where In Germany Would You Recommend I Open A Bank Account?
Getting a firm handle on banking in Germany may be challenging, as it can be in other nations if you're just getting started. Therefore, before applying to any bank in Germany, you should familiarise yourself with the different kinds of banks available there and the services they provide.
Private banks, savings, cooperatives, multinationals, and online/mobile banks are only some of the banking alternatives available in Germany. Considering that the above data is inadequate to guide your decision, let's spend some time discussing the finer points of each available option.
Banks That Cater Only To High-Net-Worth Clients In Germany
Deutsche Bank is one of the country's most prominent German private banks, with about two hundred total. In Germany's three-tier banking system, private banks make up the first tier. Therefore, the more well-known a bank is, the more likely you will be able to use its services even if you travel internationally. This is especially important if you are looking for a bank with expertise in dealing with foreigners.
The Cash Group consists of the three largest private banks in Germany: Deutsche Bank, Commerzbank, and Hypovereinsbank. So long as you have an account at one of these institutions, using their ATMs won't cost you a dime. In short, they both have no fees for using the ATM the other. Since some banks charge as much as 5 euros for cash withdrawals, having an account at one of these institutions might be helpful.
Second-tier financial institutions are savings banks, which are owned by municipalities. Numerous savings banks, many of which are owned by the public, serve the German people. You may be familiar with Sparkassen, like the BerlinerSparkasse, the Stadtsparkasse Munich, or the Frankfurter Sparkasse. You must be a German resident to create an account at one of these financial institutions.
Third-tier financial institutions in Germany are cooperative banks (Volksbanken/Raiffeisenbanken), which function like member-owned credit unions. More than 1,100 cooperative banks serve the German economy, many under the Volksbanken and Raiffeisenbanken umbrellas. This kind of bank was founded with the premise that its customers, including depositors and borrowers, should have a voice in its management. Unfortunately, opening an account with one of these banks will need proof of permanent German residency.
Germany's International Financial Institutions
You may, of course, also choose to work with foreign banks in Germany if that's what you want. Germany is home to many foreign banking institutions, so you may be able to move your account here if the institution you usually use at home has a branch in Germany. Citibank, ING Bank, BNP Paribas, and Barclays Bank are just a few examples of these financial institutions.
How to Choose a German Bank and Open an Account
Be careful to weigh the bank's services, availability of branches and ATMs, and costs before deciding on the kind of account to establish or the bank to use.
Before deciding to create a bank account in Germany, you should think about the following:
Money-related services. Investigate the services offered by a bank thoroughly before deciding to create an account there. Although German banks often provide a complete range of services, it is nevertheless prudent to come prepared with all relevant data.
Help for the customer. Helping out banking customers is crucial. In particular, about the language. You should choose a bank with English-speaking representatives if you don't know German.
Costs incurred for upkeep and withdrawals. Because of their potential accumulation, fees are an essential factor to think about when deciding on a financial services provider. Some ATMs may charge up to 5€ for maintenance and withdrawals, so be cautious about inquiring about any potential costs.
Branches and automated teller machines. The vast majority of German banks have a total unit and ATM system. Having your money available at your fingertips whenever you need it is priceless.
Internet-based help. The online world has become vital and handy in today's internet era. For example, online banking services are crucial and convenient.
We've compiled a list of some of Germany's best banks so you may quickly and easily open an account with them.
The Services Provided By German Banks
You may choose from a plethora of options when opening a bank account in Germany. Choosing a bank involves many steps. Initially, you must decide if you want an account with a private German bank, a public savings bank (Sparkassen), a cooperative bank (Volksbanken/Raiffeisenbanken), an international bank, or an internet bank (direct bank).
Below is a rundown of the services offered by some of Germany's largest banks:
Funding Institutions in Germany
Deutsche Bank and its subsidiary Postbank serve almost 12 million customers, making it the private bank with the most extensive customer base. Commerzbank comes in second with around four million customers. A better option for non-Germans could be one of the bigger and more well-known German banks. These financial institutions are more used to interacting with international clients and other international banks. Most of the time, they are easier to go to, particularly when you're away from home.
The Girokonto is Commerzbank's free basic account; it comes with a debit card and can be opened digitally or on a mobile device. The KlassikKonto, for €4.90 a month, adds Mastercard debit card and money transfer options. The PremiumKonto, for €12.90 a month, adds up to four credit cards, free cash withdrawals at all ATMs, and insurance options. Starting balances for the Girokonto and KlassikKonto accounts are €100, and you may earn an additional €100 by referring new clients to the Girokonto.
Cooperative banks and credit unions are the third major component of the German financial system. The Volksbanken und Raiffeisenbanken group includes several of these financial institutions. Several checking accounts are available, such as a free checking account with debit card payments, money transfers, and an online banking platform (providing the individual Volksbank you have an account with is set up for this). People who want a more social banking experience often gravitate toward cooperative banking models. Like Sparkassen, Volksbanken needs account holders to be legal residents of Germany.
To illustrate how helpful Wise may be for ex-pats, imagine you have just relocated from the United Kingdom to Germany and would want to make purchases in Euros before completing the necessary paperwork for your Anmeldung. Wise Multi-Currency Account features include the following: the ability to transfer GBP from your UK bank account to your Wise Euro account;
Pay with your Wise debit card, send or receive SEPA (and SWIFT) payments, and set up direct debits; convert to Euros at a modest price (e.g., converting £1,000.00 to Euros will cost you roughly 0.37%, or £3.69).
You will also be able to provide a prospective employer with a separate set of bank information in Belgium. It is against the law to refuse a payout or a receipt of money based on the origin of an IBAN, making Belgian IBANs entirely valid throughout Germany and the rest of the Eurozone. Overdraft protection is not available, nor will interest be paid on any funds remaining in your account after a purchase has been made.
How To Get A German Bank Account Without Registering
Finding a bank that allows non-residents to open accounts is one way to avoid the Catch-22 of needing Anmeldung paperwork, addresses, and bank accounts.
You may establish a bank account in Germany without proof of registration paperwork at many different banks. Likewise, you may join up with N264 and other mobile banks in Germany without providing a physical address (although this may change now that the UK has left the EU).
For those who prefer not to go through the hassle of an Anmeldung, other banks, including Comdirect, ING, and Deutsche Bank6 (through its student account), also provide reports to non-residents.
Check out the Wise multi-currency account if you need an account quickly but don't currently have evidence of registration. A multi-currency account allows you to send and receive funds in many currencies without additional fees. Minimal costs and the actual exchange rate are guaranteed with every trade.
In addition, no proof of registration form is required. By verifying your identity with us, we can quickly activate your Wise account so you can begin using it immediately, saving you the hassle of completing lengthy forms and making you wait in line.
How Much Does It Cost?
Service fees for German bank accounts may vary from €1.908 per month (for Postbank's online-only account) to roughly €14.909 per month (for HVB's Exclusive Account). Therefore, paying for a bank account is unnecessary unless you want a lot of extra features or are having problems opening an account without an Anmeldung.
Many financial institutions, such as mobile-only banks, provide free basic accounts that allow you to manage your money while on the go. One of these accounts should be enough if all you want to do with it is deposit your regular paycheck and make the occasional bill payment.
Even with a free checking account, keeping an eye out for hidden fees and penalties is essential. These could be relevant for certain business dealings. In the next part, we'll look at one such case: using an ATM to withdraw money.
In particular, the costs of doing business across international borders may be high. For example, transferring money to a friend in another nation may cost you a large percentage of the total or a flat fee.
If you often transfer money overseas, you should read the fine print on international payments to avoid spending a lot. Doing it via your bank is probably not the most cost-effective option.
You might be assessed an additional fee if you use a credit or debit card. In the United Kingdom, a bank account often comes with a free debit card. For instance, credit cards may cost anything from €30 for a primary card to €90 for a premium card every ten years.
Okay, we think we have all you need to know about the bank in Germany covered there. Hopefully, you now have a better understanding of the paperwork requirements and the procedure for opening a bank account in Germany if you are not a German resident.
Don't forget to look into the financial institutions we suggested, especially those that cater to students and have free checking and savings accounts. Also, remember that Wise is a simple and inexpensive way to transfer and receive money worldwide or tide you over until you can set up your new German bank account.