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Banking in Germany

Banking in Germany

Banking in Germany

As an expat in Germany, one of the first steps in setting up your life will be to open up a German bank account, to receive your salary, rent an apartment, or take out health insurance.

Banks in Germany

Before you open your bank account, you might want to do some research on which bank best suits your needs. In a country that has more banks per head than anywhere in the developed world, you have plenty of choice.

While you are deciding where to do your banking in Germany, it is wise to take into account that most banks in Germany charge their account holders a yearly fee; many banks will also charge you for withdrawing cash from an ATM belonging to a different bank. 

Biggest banks in Germany

Banks in Germany fall into three main categories:

Private banks

Private banks are nationwide banks with branch networks. Although they offer everyday banking services, they also have a stronger focus on wealth management, real estate and investment banking.

Direct & Mobile banks

Plenty of online-only banks are now arriving in Germany, offering lower fees and telephone-based customer service. It is sometimes more difficult to withdraw cash if you are with an online-only bank unless they have an arrangement with a high street bank.

Be sure to check all the details of the accounts offered to make sure they suit your needs and requirements. Although the situation is gradually improving, few German banks (with the exception of Deutsche BankPenta and N26) will provide detailed information in English.

Public savings banks and cooperative banking associations

These are local banks with a strong focus on small and medium-sized businesses and local investment. Although the branding for these banks is the same nationwide, each regional bank operates as its own separate entity. They usually have the most number of physical branches, especially in more rural areas.

How to open a German bank account

To open a private current account (Girokonto) in Germany you will need to make an appointment online or visit your local branch with all of your paperwork. It is also becoming increasingly popular to open your German bank account entirely online, by filling out the relevant form on the bank’s website and then confirming your identity either by video chat or Postident.

Documents for a German bank account

Whether you choose to open your account online or in branch, you will need to provide the following documents:

If your bank has a minimum income requirement you may also have to provide proof of income with payslips or an employment contract.

Once your identity has been confirmed and all the details have been processed, you just need to wait until your account is set up and your new debit card (Girocard) and PIN are sent to you in the post.

Online banking in Germany

Most banks in Germany can be expected to provide some sort of internet banking for you to conduct your financial affairs online. Be aware that sometimes you will have to specially request online banking (Online-Banking) when opening your account. Your login details will usually be posted separately to your home address.

Most banks offer internet services only in German. If you are unsure, you can always ask for a tutorial from the bank staff member when you open your account. (Or you can brush up on your German!)

What is a TAN (Transaction Authentication Number)?

In order to make internet banking more secure, many German banks also use TANs (transaction authentication numbers). These single-use passwords are required to log in to online banking or authorise online transactions. Traditionally, German banks used to print these out 50 at a time for customers, but it is becoming increasingly common to have a TAN sent as an SMS to your mobile phone or generated by a Smartphone App.

What is Giropay / Paydirekt?

Giropay and Paydirekt are two schemes offered by German banks that allow you to pay online using your debit card. Once registered, you can use a username and password or PIN to securely pay for goods.

Credit cards in Germany

Credit cards are becoming increasingly popular in Germany, with many of the larger banks, such as TargobankHanseatic Bank and Santander, now offering them to their customers. You can also get a credit card directly from an international supplier such as American Express and Visa. Unlike some providers, gebührenfrei offer credit cards to customers without charging annual fees. There are various websites where you can compare offers and interest rates to find the best deal.

To be eligible for a credit card, you will usually need to be a resident in Germany and earn a minimum amount of net income per month. You will be asked for your employment contract or payslips as proof of this. The exact income requirement differs from bank to bank. Repayment of credit card debt in Germany is usually done via direct debit on a monthly basis. It is possible to spread repayments over a longer period but you may face much higher interest rates as a result.

Be aware that cash is still a very popular payment method in Germany, used in around 40% of transactions. Many small businesses will not accept payments by credit card.

Banking for businesses in Germany

If you are planning to start up your own business in Germany and want to open a German business bank account (Geschäftskonto), the process is very similar to what it is for opening a private account. As well as documents confirming your identity and address, you will also need all of the details concerning your business, such as your Handelsregisternummer and a record of your turnover. Most banks will be able to offer different types of business accounts, depending on the size of your company. If you are a freelancer, you may not need to open a business account.

Loans in Germany

The most common form of loan or money-lending in Germany is an arranged overdraft with your bank. It is usually possible to get one (for an additional monthly fee) after you have been with your bank for six months, as long as you have a regular salary. Overdrafts in Germany are usually up to three times your monthly income.

Loans can also be arranged through your German bank. Whether you are approved depends on how much you wish to borrow, your credit rating, regular income and residency status. If you only need to borrow a small amount, you can always use a credit card.

What is the SEPA?

SEPA (Single Euro Payments Area) is an initiative of the European Union that came into effect on February 1, 2014. It affects bank transfers of euros, seeking to improve the efficiency of cross-border payments. Using your IBAN, you can make or receive payments to any account located in the SEPA.

What is my IBAN?

IBAN stands for International Bank Account Number. It is a unique number that identifies your country, bank and account number in a way that can be understood by financial institutions worldwide. Your IBAN will be included on any correspondence you receive from your German bank, and also sometimes on the front of your debit card.

Can I open an offshore account with a German bank?

Offshore banking is usually only offered by the major German banks, such as Commerzbank or Deutsche Bank.

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