An Overview of Open a Bank Account in Germany
Germany is known for its large and competitive banking sector, which offers customers many choices in managing financial activities. Majorly there are three categories of banking services in Germany, they are private and public sector banks, direct banks, and non-bank fintech. Private and Public Sector banks charge the highest fees and lengthy account registration requirements, but they offer a wide range of services. Direct Banks are affiliated with big German banks. They offer full-fledged banking services but do not have any physical branches, thereby lowering their cost and entry barrier. Lastly, non-bank fintechs offer easy-to-access flexible checking and spending services at low cost.
Types of German Bank Accounts
The following types of bank accounts are available in Germany:
- Current Account or Checking Account (Girokonto)
This type of bank account is used to process cashless payments and is meant for everyday use.
- Saving Account (Sparkonto)
This type of bank account allows funds to be deposited but restricts withdrawals and accruing interest.
- Fixed Deposit Account (Festgeldkonto)
This type of bank account is a fixed-term investment account that offers higher interest rates as compared to most of the other types of accounts. There is a limitation in withdrawing funds until the tenure has expired.
- Money Market Accounts or Overnight Money Accounts (Tagesgeldkonto)
This type of bank account bears interest for a fixed term by paying interest rates from the money market.
Types of Cards Available in Germany
- Electronic Cash (EC) Card (Girocard)
It is a debit card linked to your account that can be used for direct payments and ATM withdrawals. However, this card doesn’t have a 16-digit number so it cannot be used for other payments, such as online shopping.
- Visa or Mastercard (Kreditkarte)
It is a debit card linked to your account and has a 16-digit number, so it can be used for all types of payments and withdrawals.
- Credit Card (Kreditkarte)
It is a credit card with a credit limit that gets billed automatically from the account once a month by the SEPA direct debit. However, some German banks also allow the carry forward of debt from one month to another.
- Maestro Card
A maestro card is the same as a debit card like Visa or Mastercard. It is linked to the account and has a 16-digit number that can be used for all payments and withdrawals.
Documents Needed to Open a German Bank Account
The paperwork requirements may slightly differ from bank to bank, but the following documents are commonly requested by banks to open a bank account in Germany:
- A passport
- German Residence Visa
- Duly filled out Bank Application Form
- Proof of Address (an Anmeldung)
- Proof of employment or income
Procedure to open a bank account in Germany
The online procedure to open a bank account is as follows:
- Search and Download the Girokonto registration form from the Bank website.
- Take a printout of the form and print it.
- Take the form to the local Deutsche Post Location along with the required documents for identity verification.
- Send the signed ID verification and application form to your chosen bank.
- Wait for approval. The approval is sent via paper mail.
- Make an appointment with the bank or directly go to the bank.
- Make a Request to open a Girokonto and complete the application form.
- Get your ID and other documents verified.
- Wait for approval. The approval is sent via paper mail.
Different Ways to Open a Bank Account in Germany
Big German Bank
These are traditional banks and comprise four large banks, namely Deutsche Bank, Commerzbank, HypoVereinsbank, and Postbank. These banks mutually waive withdrawal fees for customers across Germany, so they are known as the Cash Group. Additionally, banks like Sparkassen, Volksbanken, and Raiffeisenbanken also come under this category but do not form a part of the Cash Group. Sparkassen banks have a network of 430 municipal and local public banks across Germany, whereas the Volksbanken and Raiffeisenbanken are widespread banking cooperatives. Even though it can be expensive and tricky to set up an account with these banks, they offer a broad scope of service and have a long history.
Banking Services Offered by banks are as follows:
- Deutsche Bank
Deutsche Bank offers the following types of services in Germany:
- A standard checking account with a Girocard debit card, online and mobile banking services. This account costs €6.90 per month. It is known as AktivKonto.
- A standard checking account for students. This account has no monthly fees but the registrants should be under the age of 30 and must be students from the EU. This service is also known as Das JungeKonto.
- A premium account option with a credit card and travel insurance. This account costs €13.90 per month. This service is known as BestKonto.
It is the second-largest private bank in Germany, and it offers the following services:
- A standard checking account with a debit card. Here no monthly fee is levied if less than €700 is deposited per month. If it exceeds then a fee of €9.90 is charged per month. A deposit of €50.00 is required after the first three months of active use. This service is known as Girokonto.
- A standard Girokonto with additional features such as direct debits, transfers, and checks is known as Konto-Extra “Klassik”. It costs €6.90 per month.
- For travellers, there is a premium account which costs €12.90. It includes two credit cards, deposits, free withdrawals, airport lounge access, and family health insurance. This service is known as the Konto-Extra “Premium”.
HypoVereinsbank (HVB) is the fifth-largest German Bank. It offers the following standard set of banking packages for everyday use. Certain additional benefits provided are:
- HVB AktivKonto- An everyday Girokonto with access to online and mobile banking and with optional debit and credit cards. After the first year, the account costs €4.90 per month, an additional € 5.00 per year for a debit card, and €15.00 per year for a credit card.
- HVB PlusKonto- A standard checking account with debit and credit cards built into the price of €9.90 per month after the first five years. The account also has free money transfers.
- HVB ExklusivKonto – It is a premium account that offers free credit card ATM withdrawals and travel insurance. It costs €14.90 per month after the first year.
- Volksbanken and Raiffeisenbanken
These banks offer a broad collection of credit unions and cooperative banks offering services across Germany. They operate as a shared brand and offer a myriad of financial solutions such as Girokonten, debit cards, and online and mobile banking services. It is an ideal banking option for people who are inclined towards cooperative banking.
These banks provide a range of services and are widely available. They offer diverse banking packages and individual options. The services include a Girokonto, Girocard debit card, and online and mobile banking options.
German Direct Bank (Direktbanken)
These are full-fledged banks offering all or most of the banking services. However, they do not operate outside their branch, and the banking services are online instead. The main categories of direct banks in Germany are fintech and bank subsidiaries. Fintechs include Bunq, N26, and Monese. Fintechs provide a slightly narrower range of financial services and are cheaper. On the other hand, subsidiaries offer a wide range of services but are slightly more costly. Subsidiaries are DKB, ING-DiBa, and Comdirect.
Using a Wise Account (a bank-like alternative)
Another option for a non-resident to open a bank account is Wise Multi-Currency Account. The services offered by Wise Multi-Currency Account are debit Mastercard, which allows users to pay and be paid like a local within Germany and also across the Eurozone. A Wise Multi-Currency account can be opened online. A person is only required to verify their identity through their interface to signup and access to service.
Using a Basic Payment Account (Basiskonto)
The last option to open a bank account in Germany as a non-resident is a Basiskonto. It offers basic banking services either free or at a low cost. It is available as long as the applicant is an EU resident, which means that an EU national and a holder of EU visas can open a basis. It is insured for up to €100,000 in deposits for individual accounts and €200,000 in deposits for joint accounts.