Free German Bank Accounts – Your Best Options
If you’re currently considering a move to Germany, you may not be aware that many banks here charge a monthly administration fee for the pleasure of you holding a current (checking) account, known as a Girokonto in German, with them.
In that case, let this article guide you as a reminder for when you make the move, to ensure you don’t end up opening a German bank account with an institution which imposes these rip-off charges.
For those readers already living here and wondering what options are available to them to save themselves some money, read on…I assume you must already have some sort of banking arrangements here in Germany. If you are paying for the privilege of having a German bank account, I strongly recommend you stop throwing money down the drain and consider one of the options below.
In the previous articles in this mini-series, we first looked at helping those new in Germany get to grips with how to open a German bank account.
This was followed up with an overview of how to switch accounts for existing customers who already have a German bank account with another institution.
The colossal profits made by the banking and financial services industry mean that I like to see it as a bit of a moral cause. I consider it my mission for them to make as little profit as possible from my custom. Being financially savvy is a skill I would advise all expats to get to grip with in their new country.
If this is something you would like more help with but don’t know where to start, contact us for a free 15-minute Skype chat. We can most likely help, although disclaimer, this site is not a regulated financial advice business. Think of it like us sat having a beer and casually talking a bit about money saving opportunities. It’s merely a no-obligation offer from LiveWorkGermany to advise you how you could save some money for a nice weekend away! Or just spend it on strippers if you prefer? Either way, it’s better than some CEO called Herr Prof. Dr. Graf von Somewhere getting your hard-earned in his bonus.
What are your “must-haves”?
First thing we need to establish is: What is important to you?
Do you want access to a branch network?
Do you want to do more or less everything on your smartphone or tablet App without having to log in on a computer?
Do you want to have your credit card with the same institution as your main bank account?
Do you have a regular salary which will be paid in?
Do you want other services from your account?
This will influence the choices which are out there.
If you want access to branches, low overdraft charges, or the ability to have an account for casual use rather than somewhere your salary is paid into, this is going to limit the choices you have. All retail banks have to make money from something. By keeping overheads low or by maximising profit on non-essential services are all ways they do this.
List of free accounts
There are a number of accounts out there which are “free”.
The ones we are happy to recommend below in the “Recommendations” section are all free for:
1. Cash withdrawals from their own (if applicable) and partner organisation cash machines
3. Day-to-day transactions and management of the account
4. Issuance of a Girocard i.e. a debit card or electronic cash
5. Monthly statements, as long as you receive these online as PDF files and you clear out your mailbox regularly
6. Calling customer service and speaking to an actual person (this also applies to email queries which are responded to by a person, not just a link to their FAQs)
In the individual recommendations section below, we expand on this to explain in more detail for each offer. All of the above are valid for each account though.
Free under what circumstances
All of the above are free for the accounts we have recommended. The charges could be higher than average for other products offered by the bank. Examples are:
- Stock trading accounts
- Unauthorised overdraft charges
- Transferring money in other currencies or to non-Eurozone countries
There are ways around all of these.
There are literally hundreds of options available if you want to trade stock. Do your homework. If you understand how to buy and sell stock, then you’re smart enough to research this to ensure you don’t sign up for a poor value product with bank account provider.
Unauthorised overdraft charges can be worked around by agreeing an authorised overdraft (Dispo) limit up front when you open your account, or at least after a few months of banking with them if you have no credit history and the bank refuses this at the offset. Even authorised overdraft charges can still be relatively high though, at anything between 10 and 15% typically. But hey, if you borrow money short-term, it’s rarely cheap.
The lazy customer who doesn’t do his / her due diligence pays the price. Banks earn a lot of money through people not being bothered to research alternatives. When it comes to financial services products, not being savvy and not doing your homework usually means you’ll pay for it in uncompetitive charges imposed by your Hausbank.
Why doesn’t everybody do this?
Honestly, because people are lazy and have other, more fun and important things to do. I have never encountered an easier way though to stop wasting money than by changing your main bank account.
Many Germans stick with the bank they have been with since they were kids, or stick with the same bank that their parents bank with. This is a country where any change is seen as a risk, and thus often viewed adversely. Change happens very slowly here. Many (not just old) people still go into branches to complete all of their money transfers.
In more rural areas, people may be more loyal to the local Sparkasse or Volksbank because of the more dense branch network available. However, even if you are based out in the sticks, seriously, how often do you need to use your branch? Is it really worth paying up to €100 per year for in completely unnecessary charges? Just go with another bank and drive to your nearest larger town for the couple of times a year you require in-branch services.
I have a mortgage, overdraft limit, credit card and stock-trading account split between the 2 banks whom I have current accounts with. I never use branch services. Last time I spoke to my personal banker was in 2009, when I arranged my mortgage.
LiveWorkGermany.com is happy to recommend:
Why? Because these 3 offer something for everyone, from traditional branch network through to online bank through to App-driven banking.
Well, I personally have been a customer of both Commerzbank and comdirect for several years am happy with their service. If I had to choose between them though, I would choose comdirect, mainly because their fees are lower and I don’t really use in-branch services.
Go with comdirect if you want more readily accessible customer service via phone and email, and / or a credit card with no annual fee. Their other fees are lower than Commerzbank and there is no minimum salary deposit as a condition for the free account.
If you want access to a nationwide branch network, then go with Commerzbank.
N26 is a relatively new kid on the block: One of the cool kids of the Berlin start-up scene. I can only go on the feedback I see in online forums and Facebook Groups. They seem to have their customer service in tune with their target audience. Everything is accessible from their smartphone App – this is the future of banking for the more tech-savvy generation. Also, if you make regular non-EUR purchases on your credit card, this is also the best option because it is commission free.
I also wanted to recommend an alternative product to the more traditional banks, especially for those folks who may not be able to access their services for reasons mentioned below. I am conscious of the fact that not all expats in Germany have a regular, fixed income which is paid into their account by their employer.
That said, for anyone self-employed who is not a casual freelancer, I would seriously consider a business account to benefit from the obvious advantages of doing so for self-employed people and small business. There are benefits this type of account can offer for “solopreneurs” vs. the traditional Girokonto aimed at private individuals.
What to do if they don’t accept my application?
There is no guarantee that your application for a German bank account will be accepted. Banks are often conservative, risk averse institutions. If you have recently arrived, don’t have a job yet and have no credit history within Germany, there is definitely a possibility that they will not approve your application.
N26 are considerably more laid back around who they accept. If your circumstances mean you are not the typical average applicant, perhaps this is your best course of action, at least for the first few months until you have established yourself.
What banks are definitely not allowed to do is to discriminate based on nationality. However, they are perfectly entitled to ask your immigration / residency status (and reject you if you do not have the right to legally reside permanently in Germany).
So there you go. Variety is the spice of life and knowing your options is the key to not wasting money on unnecessary charges. If you’re sitting on the fence about whether to switch your account…DO IT! It will be the easiest money you have ever saved.
Work out how much you earn per hour in your job. If an hour spent switching your German bank account is financially more lucrative than your day job, then it really is a no-brainer!
Good luck with your application and I hope this was useful!