Opening a a bank account when you arrive in Germany will be one of your top priorities. You need one to get paid, to withdraw money (if you don’t want to get charged ATM fees every time) and to set up direct debits to pay your bills. It’s something you’ll need to get sorted during your first few weeks here.

 

How to open a German bank account

 

The choice you have when considering which type of account can be bewildering, and there are many poor deals out there. Many banks actually make you pay them for the privilege of you having an account with them. Unthinkable in most English speaking countries!

In this article, we walk you through the different types of banks and the process of how to open a bank account in Germany.

Our other related articles give a comparison of the 4 most popular banks for expats and how to switch your account from your current bank to another, if you signed up with a bank when you first arrived in Germany and now realise you made the wrong choice!

When considering how to open a German bank account, your first consideration will probably be what type of bank do you wish to go with? Here’s a rundown of the 3 main types to choose from:

 

Sparkassen & Volksbanken

 

These are local banks, with a strong focus on small and medium-sized businesses, regional economic development and long-standing customers. In UK terms, they are similar to building societies, whereas in US terms, they are similar to credit unions.

While the Volksbank or Sparkasse brands and logos are the same nationwide, each regional / city Sparkasse or Volksbank operates as an independent entity. What that means to customers is that there are some standardised products and services offered across the whole network, but each bank is its own legal entity and thus determine their own set of charges and T&Cs.

In practical terms, your account therefore is not portable from, say, Berliner Sparkasse to Frankfurter Sparkasse if you move within Germany and want to keep the same in-branch access. They may be part of the same alliance but essentially they are different banks.

Both of these chains have large branch networks, stretching into city suburbs and also operating extensively throughout rural areas. Don’t expect to pop in there at lunch time or on Saturday morning to do your banking though…

 

Nationwide Banks with Branch Networks

 

These are the antithesis of Sparkassen or Volksbanken. They are banks with a nationwide presence, for whom retail banking in most cases is not their core business. These “big boys” tend to have a stronger focus on wealth management, real estate and investment banking. All of these banks will have you covered if you’re keen on using your bank for more advanced products and services such as stock, options, currency or futures trading, or investment funds. The major players who fall into this bracket are:

  • Deutsche Bank
  • Commerzbank
  • HypoVereinsBank
  • Postbank

Their branch networks are less dense than Sparkassen and Volksbanken and tend to be concentrated in larger towns and cities, usually in the centre or in the larger suburbs.

 

Online and App-based banks

 

Just like most other European countries, Germany has a wide selection of banks operating exclusively online. A significant proportion of these are foreign-owned institutions, due to German online banking taking off pretty late in comparison to the rest of Europe.

Online banks typically have lower charges than brick-and-mortar banks, and telephone customer service is usually available for longer hours than banks with a branch network. The downside obviously being if you have a more complex issue and feel uncomfortable speaking German on the phone, this can be a stumbling block. However, that being said, all of them have email support too, so it’s not really a deal breaker.

Because these banks do not have branches of their own, if you need to withdraw cash they usually offer one of these two options, sometimes even both:

Option 1: They partner up with, or are part owned by one of the traditional banks, meaning that customers can use their cash machines free of charge. comdirect bank, for example, is a partial subsidiary of Commerzbank, and thus their customers can use the network of ATMs owned and operated by the Cash Group alliance. Advantage being it’s just like using a normal brick-and-mortar bank in that sense.

Option 2: Through their issuance of a MasterCard or Visa, they offer free withdrawals to their customers using their credit cards at any cash machine which has the Visa or MasterCard logo, which in Germany is pretty much any international ATM i.e. any major bank plus local Sparkassen and Volksbanken. It’s then debited typically at the end of each month automatically from your account. DKB  for example does this. Great in that you can use a much bigger network of ATMs without charges. Not so great if you’re bad at managing money and want to keep track real time of what you’re spending.

Verifying your identity: PostIdent or Video Call

For those German bank accounts which operate exclusively online, there is no way during the application process that you are able to verify your identity.

Online banks get around the need for notarised documents by using the PostIdent facility. Most of them now use various third-party Apps and services to verify your identity via video through your smartphone or laptop’s camera.

Both comdirect and DKB use this method now.

The video chat function is done by means of a smartphone App for iOS or Android. There are a few players in the market offering this which act on behalf of the bank. It’s an outsourced service. PostIdent has also started to offer this through their own App too.

I personally have used a couple of these video identity services. My experience was terrible (I sat in a queue for over half an hour and then the customer service attendant could not read my passport properly with my webcam). The second time (about a year later) was with N26 and this was much better. Maybe it was a different company or perhaps they had just ironed out some process inefficiencies. Who knows?

We don’t wish to tarnish all of these 3rd party operators with the same brush, but just a word of warning that it may be less hassle to use ye olde method!

Why has my application to a certain bank been rejected?

 

A common frustration in the process of how to open a German bank account as a newly arrived foreigner with no credit history in Germany is that some banks may refuse to accept applications for Girokonten (current accounts or checking accounts) from foreigners who have just landed in Germany.

There is are 2 simple reasons for this:

Some accounts, as part of their terms and conditions of being free-of-charge, stipulate that you must have a monthly salary being paid in. If you don’t have a fixed employment contract, that’s obviously not possible. Others simply may want to see some credit history before they will accept you.

Annoyingly, this doesn’t really help your situation. If the institution offering the most suitable account for your requirements rejects your application, wait for a few months or a year, then try again.

N26 are not selective and will not look for a German credit score (which you won’t have, obviously!)

Is it free to withdraw cash from anywhere?

Unfortunately, no it isn’t. Unlike in the UK, for example, German banks do not have an agreement or understanding that their customers can use each other’s ATMs for free. There are 4 main networks of cash machines:

 

  • Volksbanken
  • Sparkassen
  • Cash Group (Deutsche Bank, Commerzbank, HypoVereinsBank and Postbank)
  • Cash Pool (an alliance of mainly foreign-owned banks, as well as some smaller German players).

 

In small towns and villages, there will often only be a Sparkasse or a Volksbank ATM. Fees usually range from €3 to €5 if you use an ATM which is not part of your bank’s network or alliance. Therefore the advice is: If you’re travelling into the boonies for a long weekend (hiking, spa, ski trip, camping), go to your bank at home before making the trip, to avoid being stung by rip-off ATM service charges.

Will They Provide Customer Service In English?

 

Of course, as a new arrival, it’s perfectly understandable that you probably can’t speak fluent German.

What confuses us, however, is that people are genuinely surprised to find out that banks in Germany do not routinely have English speaking service employees. Why should they? If you’re a private wealth management client, fair enough…but for a current account?!

N26 offers their App in English automatically if this is the operating language of your smartphone. Deutsche Bank, being the “premium” bank in Germany, will also have English speaking staff in their branches in major cities. Out in the sticks though you might be out of luck.

When considering how to open a German bank account, you’re very restricted here. In most cases it is a case of good fortune whether there is an employee in a branch or on the other end of the customer service phone line who speaks English.

As with most things in life, if you are friendly and you speak slowly and clearly, your chances of success will no doubt be higher than approaching this with a feeling of entitlement and speaking at normal speed, without moderating your accent.

DKB-Cash: Das kostenlose Internet-Konto

Which bank should I go with?

Well, that depends on a few criteria.

What is important to you as a customer?

  • 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.

SaveSave Disclosure: The links for comdirect, DKB and N26 are affiliate links, meaning that Live Work Germany receives a small commission from these banks for any successful referrals we make. This does not have any bearing on the terms or prices of the accounts themselves.

 

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