UP TO DATE NEWS YOU NEED
21 Aug 2017
Though the German banking system has all the perks you’d expect from modern financing, it isn’t always as straightforward as it should be.
Fees for bank accounts are common, cash machines aren’t always free to use and you often need to make a personal appointment with the bank just to set up an account.
However, as a bank account is essential for many aspects of life in Germany – not least receiving your salary –we’ve put together an easy to follow guide for navigating the German financial system.
Keep reading to find out more.
Banks in Germany are split into two main groups: Cashgroup and Sparkassen.
Within these two networks, withdrawing money from ATMs is free.
However Cashgroup customers who use a Sparkasse ATM – and vice versa – will be charged for taking out cash.
Cashgroup is made up of large national banks and their subsidiaries.
Members include Deutsche Bank, Dresdner Bank, Commerzbank, Hypovereinsbank, Postbank, Comdirect, Norisbank and Berliner Bank.
The Sparkassen network on the other hand is state owned.
These banks often have strong relationships with local businesses and communities and many people choose them for their more traditional approach to banking.
Almost all small towns will have a Sparkasse, making it easy for members to withdraw money free of charge.
If you’re moving to a large city, you shouldn’t have a problem finding free cash machines no matter which bank you choose.
However, if you’re relocating to a smaller town, you may be restricted by the choice of banks available in your local area.
Unless you’re a confident German speaker, it’s probably easiest to open a bank account in person.
In most cases, the process is quick and relatively straightforward, however some banks require you to make an appointment to set up an account, so check with your local branch in advance.
As you need proof of address to open bank accounts in Germany, you’ll first need to register with your local Bergeramt.
This is called Meldebescheinigung and is required every time you change address while you’re living in Germany.
The form you get when you register is your proof of address.
As well as being required for opening bank accounts, it’s also needed for things like joining the library and other local organisations, so make sure you keep it in a safe place.
Once you’ve got your proof of address, take it and your passport to your chosen bank to open an account.
Some banks also ask you to present proof of earnings, so it’s a good idea to take your payslip along when you open your account.
There are a number of different accounts to choose from in Germany. Some are free but fees can be as much as €8 a month for paid accounts.
The most common type of account is the current account or ‘Girokonto’.
You can also open a savings account, ‘Tagesgeldkonto’, a limited access savings account, ‘Sparbuch’, or a securities account, ‘Depot’.
If you opt for a free account, you’ll generally have access to internet banking and an EC card, however you’ll be charged for in-branch transactions.
If you choose an account with a monthly fee, you’ll have a wider choice of free transactions and access to a selection of services.
Most banks charge extra for credit cards. If you do want a credit card, note that the most widely accepted cards in Germany are Visa and Mastercard.
American Express is less commonly used and you may struggle to find retailers who will accept it in more rural parts of the country.
Everyone who lives in Germany is required to have health insurance. If you have a job, you’ll automatically by included in the public insurance scheme and contributions will be deducted from your salary.
If you’re freelance or self-employed, you’ll need to arrange your own insurance. This can be expensive so it’s a good idea to talk to an insurance agent to ensure you get a good deal.
Another type of insurance you should invest in is third-party private liability insurance (Haftpflichtversicherung).
This will cover you in the event you commit an act for which a German court would consider you ‘ordinarily negligent’.
‘Ordinary negligence’ could be as simple as accidentally damaging someone else’s property or causing an accident as a pedestrian by not crossing at the zebra crossing.
Though this might seem like a lot to take in, getting a bank account and insurance cover set up in Germany is actually pretty straightforward if you follow the right steps.