A Banking Guide for Foreigners in Germany
One of the first things you need to do when you move to Germany is open a German bank account! You can easily open a German bank account from your laptop – from wherever you are in the world! But there are a few things you should know before you open an account. Below you can read about opening a bank account in Germany for foreigners.
Table of Contents:
- Why You Need A Bank Account In Germany
- What to Know Before Opening a Bank Account
- Best Bank Account in Germany for Foreigners
- Cheap & Fast International Money Transfers
Why You Need A Bank Account In Germany for Foreigners
There are many reasons you need a bank account in Germany! To start, you need a German bank account to receive your salary. Your employer will typically use direct deposit to pay you. In addition, you need a German bank account to buy German insurance, such as private health insurance. You also need a bank account in Germany to make SEPA Direct Debit payments and pay German taxes.
You need a German bank account to set up utilities such as electricity and water, and to pay your rent. For this reason, many foreigners open a German bank account before they move to Germany! Some online banks let you open an account from wherever you are in the world. Then you’re ready to rent a flat when you arrive to Germany!
What to Know Before Opening a Bank Account in Germany for Foreigners
Before you open a bank account in Germany there are some important things to consider. Not every bank has the same options. You want to make sure you get the best bank account in Germany for foreigners! To choose the best bank account, you need to consider the safety and convenience of the bank. You should also know whether or not your bank offers online/mobile banking options. If you’re a foreigner then it’s really important to choose a bank that has services in your language. For people that travel then it’s especially important to choose a bank that has low fees (or no fees!) for international transactions and ATM withdrawals.
Mobile Banking: Safety & Convenience
You should choose a bank that offers mobile banking. The ability to manage your account from your phone makes banking safer and more convenient.
Why does mobile banking make banking safer?
A mobile app on your phone makes banking safer because you’re easily able to keep an eye on your account. For example, if your bank has a mobile app then you can link your account to your phone. This gives you the option to get notifications when a transaction is made on your debit card. If you get a receive a notification for an unknown transaction then you can easily sign-in on your app and put a lock on your card. Then no one can use it until you unlock your card. Another example is if you lose your debit card. You can go on the app and lock your card until you find it.
Why does mobile banking make banking more convenient?
As far as convenience goes, a mobile app makes banking more simple. You can access your account to look at different purchases you’ve made, transfer money, and get help from customer service all from your phone.
It is really important to choose a bank that offers all of their services in your language. For example, some banks might have a version of their website in English. However, they might not have applications and customer support in your language. You should always check to see what services are offered in your language.
You might find that if you go to a branch bank (a bank that has physical store locations) to open an account or get help you might not find anyone that speaks your language. Therefore, a good bank account in Germany for foreigners would likely be with an online bank.
Online banks offer their services in English more often than branch banks. However, it’s important to always double check. For instance, Deutsche Kreditbank AG and ING (two German online banks) do not have customer support in English nor do they have a website available in English. An N26 account is a very popular bank account in Germany for foreigners because they have services in English, Spanish, Italian, French and German.
There are three fees to look out for when you’re choosing a bank account in Germany for foreigners:
(1) General fees for having the account
Branch banks usually have more fees than online banks. This is because branch banks have to maintain locations that you can go to in-person. As a result, they also have more employees. Overall, branch banks have more overhead expenses and, therefore, charge more fees. If you decide to open an account with a branch bank, make sure you know beforehand all of their fees.
Online banks have less fees. This is because they are more cost-effective. You can open an online bank account with zero monthly service fees. Online bank accounts are consistently less expensive than branch bank accounts.
(2) Card fees
After you open your bank account, then you will usually receive a free debit card. However, credit cards aren’t always free. Of course it depends on which bank you have, but credit cards usually cost between €30 and €100 per year. For instance, you can get a Classic Credit Card with Commerzbank for €39.99 per year and a Gold Credit Card for €99.00 per year. You can get a standard MasterCard credit card with Deutsche Bank for an annual fee of €39.00.
(3) ATM fees
Every bank has different ATM fees. You should ask your bank what their ATM fees are so you’re not taken by surprise later on down the road!
There are agreements between some German banks to waive ATM fees for their customers that use any ATMs that belong to banks part of the agreement. For example, Deutsche Bank, Commerzbank, HypoVereinsbank and Postbank have an agreement to waive ATM fees for their customers. If you have an account with Deutsche Bank then you can withdraw money from Commerzbank, HypoVereinsbank and Postbank ATMs for no fee.
The German bank N26 has a bank account that offers 5 free ATM withdrawals per month in euros. This is a great bank account in Germany for foreigners because it also comes with a MasterCard debit card for free. The other three types of N26 bank accounts (N26 You, N26 Business You and N26 Metal) allow free ATM withdrawals in other currencies for free. If you just have the basic bank account then the fee for withdrawing money not in euros is 1.7% of the amount withdrawn. The N26 account is the best bank account in Germany for foreigners that travel.
To find out more about N26 bank accounts, checkout our article, “Best GERMAN BANK ACCOUNT For Expats”.
Best Bank Account in Germany for Foreigners
The best bank account in Germany for foreigners is N26. If you don’t speak fluent German, then this is the perfect bank for you. With N26, you can open a current account online for free! You can also withdraw euros from any ATM 5x per month for free! And N26 has no international transaction fees — if you travel then this is a great option! Our article on Germany2Go’s website, „Best German Bank Account for Expats,“ has a lot of helpful information on N26!
Cheap & Fast International Money Transfers
The best way to transfer money abroad is through TransferWise. It is fast, safe and the cheapest way to transfer money. TransferWise uses the mid-market exchange rate. This is the most fair exchange rate. It is the mid-point between the price someone is willing to buy the currency for and the price someone is willing to sell the currency for. Many banks charge mark up the exchange rate and keep the difference for themselves. With TransferWise you always know what you’re paying for. The article, „TransferWise: 6 Things You Should Know,“ has a lot of great information about transferring money internationally between different currencies.
What Documents do You Need To Open A Bank Account?
German address registration document (i.e. your Meldebescheinigung. You will receive this document after you register your address at the local Residents’ Registration Office.)
Proof of income/employment (e.g. paystub or tax papers.)
Proof you’re a student, if you’re opening a student account
A great bank account in Germany for foreigners is N26. You don’t need to show proof of income/employment or have your German address registration document yet to open an account with N26. For example, if you are from the UK, USA, or Canada then you only need your passport. The documents that you need depend on where you hold citizenship.
What is the difference between a branch bank and an online bank?
A branch bank is a bank that you go to in-person. An online bank is, as the name suggestions, online. The biggest differences between branch banks and online banks are language, fees and convenience.
Oftentimes, it will be very difficult to find someone that speaks a language other than German at branch banks. Many online banks have at least some services in English. N26 has services available in English, Spanish, German, French and Italian.
What are the type of bank accounts in Germany for foreigners?
A German current account works like a United States checking account, minus the checks. Germans don’t write personal checks.
You will need a German current account for many different things. First, your employer will deposit your salary into your current account. You will also need a current account to pay taxes in Germany and set up utilities.
For foreigners, current accounts are essential. You will need a current account to transfer money from your home bank account.
When you open a current account you will receive a debit card, known as a Girokonto in German. The bank will usually give you this debit card for free. The amount that you spend on the card will be directly taken out of your current account.