Interested in moving to Berlin?
This post is an extract from my book The BreakingOut Guide To Moving To Berlin.
In this post I look at the best way to open a bank account in Berlin.
Click here to find out more about my book all about moving to Berlin – and how to get the best out of living and working in Europe’s coolest and most exciting capital.
How to Open a Bank Account in Berlin
One of the most important things you’ll want to do as soon as you get to Berlin is to open a German bank account.
A bank account is pretty well essential in order to live in Germany. Without a German bank account you won’t be able to rent an apartment, get a German mobile contract or arrange an Internet connection. Nor even get paid when you get a job, because most employers in Berlin expect to pay their staff by direct transfer every month.
I’m not a fan of the big established banks. They all mostly offer pretty much the same features and standard of service as each other. I’ve heard good and bad stories about pretty well all of the large banking chains alike, so I find it difficult to recommend any particular one with any confidence.
I’ve also had the misfortune to see behind the counters of the banks at first hand, having worked as a self-employed contractor at the headquarters of some of the biggest banking chains. What I saw was not a pleasant experience.
All in all I do not regard the big branch banks as the best deal in town. But fortunately there are now better alternatives available.
Right now many new “fintech” or financial technology startups are entering the market. They’re starting to revolutionize and shake up the staid old banking system of the large banks who have had it all their own way for far too long. Better convenience, improved customer service, and a wider range of more innovative and responsive products and services will be the result.
Examples of these in Germany are the new online banks such as Number26 and Consors Bank.
There are also alternative online providers for specific financial services such as the highly successful Transferwise for international transfer payments.
So there are now real and better alternatives out there at last to the old established banks which I recommend you check out.
I’ll give a brief run-down of the online banks later on in this post, as well as taking a look at the old style traditional banks.
But first let’s take a look at the bank account scene in Germany in general and what you need to watch out for when you’re looking to open a bank acccount in Berlin.
Current accounts (Girokonto)
The standard form of bank account in Germany is the so-called Girokonto (current account). This is meant for frequent financial transactions, such as transfer of salary or payment of rent and utilities as well as withdrawing cash from bank ATMs.
If you are a student then you can usually obtain a bank account free of charge. Otherwise free banking is not so well established in Germany as it is in the UK. However there are now some accounts that offer free banking – usually under certain conditions, for example that a minimum salary amount is paid into your account every month, or that the balance does not fall beyond a certain level.
Cheques and Bank Statements (Kontoauszug)
Cheques are hardly used in Germany, and people do not expect to receive them. Cheques went out of general use in Germany more than two decades ago and so bank accounts do not normally come with a cheque book.
Practically all banking transactions in Germany which are not cash are done by means of direct debit transfer. This system is well established in Germany. This is at least one thing that the banks in Germany do very well.
If you do ever require cheques – though I’ve never needed to use one, and I don’t even have any, then they are known in Germany as EC-Schecks. You have to order them specially from your bank and specify how many you require. There may also be a charge for this – and there almost certainly will be if they are sent to you by post.
Another difference with UK bank accounts is that statements (Kontoauszuüge) are not normally sent out by post. Instead you are expected to pop into a branch of your bank and print out a statement from special Kontoauszugsdrucker – bank account statement machines.
If you want a statement to be sent out to you by snail mail you will usually have to pay extra for it.
The EC Card is extremely useful in Germany and it’s also the key to the banking system here. The EC Card is a debit card which can be used with electronic point of sale payment systems in stores. It’s also used to withdraw cash or pay in money at ATMs, as well as to print out your bank statements in branches.
You will normally be issued with an EC Card for your Girokonto. The bank normally sends the EC Card and/or credit card on to you by post a few days later. Don’t forget to sign the card immediately you receive it. A few days later you should then receive a secret PIN number for your card or cards, again by post.
My advice: Make sure your bank account offers an EC-Card and that you do not have to wait long to receive it. An EC-Card is far more useful in Germany than a credit card.
Each bank has its own system of TAN or Transaction Numbers for using with online banking for security purposes. Either you will be sent a list of one-time usable numbers, or else the bank will issue you with an electronic gadget of some kind which you have to use, sometimes also in combination with your EC-Card, to generate a unique TAN number for each online transaction.
Many of the banks now offer telephone banking. Certainly all the online banks mentioned in this post do. For this you will also need to use the TAN number system, and probably also a couple of additional passwords or “memorable phrases” as well.
Cash Withdrawals in Germany
You can withdraw money from ATMs by using the EC card and your PIN number. Usually you can also withdraw money from an ATM using a credit card but you may need to be issued with a special extra PIN for this service.
Note that if you withdraw money from an ATM which does not belong to the network your bank is part of it can cost you a fee of up to 5 Euros per withdrawal.
Sparkonto or Savings Accounts
For savings, you can open a Sparkonto or savings account. Sparkonto are free and pay you a minimal amount of interest.
There are also accounts which pay a slightly higher rate of interest, known as 90-Tagegeld or similar such names. However in return for the higher interest rate they have conditions attached such as a minimum deposit level and more restrictive withdrawal terms.
My advice: If you travel a lot, check out the savings account offered by the Postbank. With a Postsparbuch account, you can withdraw money in most European countries and currencies other than the Euro with no extra charges.
Some Things To Look Out For When Choosing a Bank in Germany
Does the bank provide English-speaking banking services?
Unfortunately provision of banking services in English is still rather patchy in Germany and cannot be relied upon too much. With ATMs it’s usually not a problem as these can usually be switched to English. Some banks now translate their websites and online banking facilities into English and sometimes also other languages besides German.
I know that currently Deutsche Bank, Consors Bank, and Network26 all provide their online services in English as well as German.
Will I receive an EC-Card immediately?
This is crucial because without an EC-Card you can’t get cash from an ATM – particularly important when the banks are closed.
Will I be offered a credit card?
Credit cards are not as frequently used in Germany as they are in the US. However, it can still be a good idea to have on and they’re also useful for making online purchases.
German banks do not always give you a credit card right away if you are new to the country. The reason for this is that your SHUFA or creditworthiness record in Germany is not yet established. All the banks refer to the SHUFA database when deciding whether to open an account for anyone and what credit services to offer them.
However, some German banks do now offer credit cards with bank accounts, though they tend to work in a slightly different way to how they operate in the US and UK.
Most credit cards in Germany are Visa or Mastercard. In practice they function more as 30 day credit cards whereby the credit is paid in full at the end of each month. You don’t have normally any say in how much is paid off – usually the whole outstanding sum at the end of the month is automatically debited from your Girokonto account.
Fees for German credit cards vary from free in the case of Postbank and Comdirect to around 30 Euros or so per year.
Not all student accounts come with a credit card. If you’re a student and you need a credit card, then take a look at Comdirect, who currently offer a free Visa credit card. Or alternatively Postbank, who offer students a credit card with their Girokonto for an annual fee of 15 Euros.
There is also a system called Giropay which is another electronic payment system. At present the Sparkassen, Postbank and Consors Bank offer Giropay cards.
How much are the fees for the account?
Bank charges (Kontoführungsgebühren) tend to be comparatively high in Germany and unlike in the UK there hasn’t been much of a tradition of free banking.
However, partly as a response to competition from the new online banks, some banks are now starting to offer free banking, particularly the online banks.
Will I get an overdraft facility and what are the fees for this service?
Overdrafts (Dispo or Disposition/Dispositionskredite) allow you to let your account go into debit or negative balance up to a certain limit. This limit is usually based on your monthly income paid into the account.
In keeping with the general attitude towards borrowing and credit in Germany, German banks tend to be more cautious and conservative in granting credit facilities than banks in the UK or US.
But provided you bank a regular monthly income into your Girokonto, most banks will grant you an overdraft of two or three times your monthly income. This can also be possible for student Girokonto accounts provided a regular monthly student allowance is paid into the account.
However – bear in mind that interest rates for Dispokredite are pretty high, currently at around 15 percent or so per annum.
Can I easily transfer money abroad and what will it cost?
If you are transferring funds to EU countries where the receiving bank operates under the SEPA system and has an IBAN number then the transfer will normally be done free of charge.
Otherwise, for transactions to accounts outside Europe, the transaction fee charged will depend on the amount transferred and to where it is being sent. Transferring money via the banks in this way tends not to be cheap.
This is an area where the traditional banks have long got away with hoodwinking the public into thinking international transactions are a special and complicated process which cost lots of money.
However there are now alternative ways to send money abroad. One such alternative is to use the services of an international online transfer provider such as highly popular Transferwise.
My advice: If you want to send money abroad, it’s actually cheaper to use the online Transferwise service rather than a bank. Visit transferwise.com
Which ATM network does the bank belong to?
The issue of which ATM network the bank belongs to is an important one because it also governs how easy it will be for you to withdraw money free of charge.
If you use an ATM belonging to a network which your bank does not belong to, then you will probably have to pay a fee. This fee is set by each bank separately and can vary between around 2 and 5 Euros per transaction. So it isn’t cheap.
This can be annoying, so it pays to understand how the ATM systems in Germany are organized.
There are four main ATM (cash machine) networks in Germany. Sparkassen, Volksbanken, Cashgroup, and Cashpool.
The Sparkassen or Savings Banks ATM network is the largest in Germany with some 25,000 machines nationally.
In Berlin the Berliner Sparkasse has around 170 ATM outlets. But if you have an account with Berliner Sparkasse you can use any of the Sparkassen ATMs across Germany free of charge.
The Volksbank network is the second biggest, with some 19,000 ATMs nationally. This serves the branches and customers of the Volksbank and Raiffeisenbanken.
The most useful ATM network is probably the Cashgroup with around 9,000 ATMs nationwide. This includes the biggest nationwide banks such as:
I’ll talk more about these banks later below.
And finally there is the smallest network, known as CashPool, which consists of about 2,900 ATMs in Germany and covers a much smaller group which includes a number of smaller banking chains such as :
I do not have experience with any of these banks.
A Brief Look at Some of the Online Banks in Germany
I’m much more a fan of the new online banks than the old established branch banks and so these are the ones I am going to concentrate on in this post.
This is the direct banking service offered by Commerzbank. However, I’ve heard that Comdirect only accepts customers who have a credit listing with the SHUFA ratings agency. This can be a problem if you have only just arrived in Germany.
Comdirect offer free banking and a free VISA card. They also give you a 50 Euro joining bonus. I personally have no direct experience of them.
Comdirect are at https://www.comdirect.de
This was originally the online banking arm of the online stockbroking service Cortal Consors. The original founders have since sold the bank to one of the large established banks – Bank Paribas I believe. So it remains to be seen if service standards remain the same or take a dive. I also have a bank account with Consors Bank.
Consors Bank offer free banking and a free VISA Card. However, their debit card is part of the Giropay system which is not as common in Germany as the EC-card system. They also offer a 50 Euro free bonus for new accounts.
Consors Bank are at www.consorsbank.de
DKB is a German direct bank originally established in 1990. They offer free banking and a free VISA card. DKB Bank has had some good reviews and is praised by many. However I have no personal experience of them.
DKB are at www.dkb.de
The Postbank are not actually a pure direct bank but are a subsidiary of the German Post Office.
However I’m including them here because their banking services have enjoyed some consistently good reviews. And being part of the Post Office means they also have branches throughout Germany. And in addition to their post office network, they also provide online banking.
They offer a Girokonto for free as well as a free VISA credit card, provided there is a minimum monthly payment into the account. They also offer free international money transfer- something most banks do not offer.
Plus there is a joining bonus worth 100 Euros for newly opened accounts.
I had a Girokonto account and a savings account with Postbank for some years. The main drawbank was that you could only withdraw cash from their own ATMs, but they are now part of the big Cashgroup ATM network so this is no longer an issue.
Postbank are at: www.postbank.de
This is the most recent newcomer to the online banking scene in Germany having opened in 2015. I also have an account with Number26.
Number26 are more mobile phone oriented than the other online banks. You can even complete the account opening formalities completely online with a combination of Internet and mobile (smart) phone. Their giro account comes with a Mastercard debit and credit card in one.
Another advantage of Number26 is that their website can be switched to English, including for the account opening procedure.
A potential drawback with Number26 at the moment is that they do not offer EC cards as yet. Instead, Number26 offers a MasterCard credit and debit card in one.
Also note you can’t send wire transfers from outside Europe from a Number26 account at present (but you can make transactions within the European SEPA area).
Number26 are at: number26.de/en
Check out the websites of the individual banks for precise details of their services.
The Big Traditional Branch Banks
These are the large banking chains which maintain bank branches everywhere such as Deutsche Bank, Dresdner Bank, Commerzbank and the like.
The problem with these kind of banks is the much the same problem with such big banks everywhere in the world. They are just too big and with that too bureaucratic. Also their internal corporate culture reflects the attitudes of the past towards banking and that comes across in their customer service.
What they seem to have in common is that they are often slow, expensive, generally unwilling to innovate, and customer unfriendly. All in all they are pretty faceless and bureaucratic and can be surprisingly incompetent at times as well.
Getting these large banks to do even simple things such as update their records to take account of your change of address can sometimes be very convoluted and bureaucratic and an exercise in frustration.
I had an account for many years with one of these big German branch banks. Incredibly they duplicated my bank account number with the account of another person within the same bank (though not the same branch).
As you can imagine, this led to frequent confusion and cock-ups with my account on their part, including even my rent payments being transferred to the wrong person until I discovered what they had been doing.
I’d have thought it was simple banking basics not to duplicate account numbers, but they did not seem to follow this rule.
I finally closed my account with them (not solely because of this account number duplication nonsense, but for other reasons as well), and opened an account instead with the new online Consors Bank.
These banks do have branches in all large German towns and they belong to the largest ATM network in Germany which makes it easy to withdraw money and carry out banking transactions.
But to my mind that’s about the only advantage they offer – and even that is now much less of a plus now the online banks are also part of the ATM network.
Opening a Bank Account in Germany
To open a bank account in Germany you need to show your national identification document ie passport or in the case of EU citizens, your national identity card if you have one.
You will also need to have official proof of a German address from the local borough where you live.
This is known as a Meldeschein. For this reason you should try to register at the Burgerbüro or Einwohnermeldeamt before you attempt to open a bank account. Without this piece of paper, no bank will open an account for you.
Under the internationally agreed KYC or “Know-Your-Customer” banking regulations intended to prevent money laundering and funding of terrorism and other crime, German banks are required by law to establish the correct identity of anyone wanting to open a bank account.
This can in theory at least be a bit of a catch 22, because to rent an apartment you will need a bank account, but to get a bank account you need to be registered with an address.
However it’s still possible to get registered and then open an account. For example, if you’re renting a room in a shared apartment, then you can then go to the Burgerbüro and register your residence and get your Meldeschein certificate. You don’t have to actually be renting a whole apartment as a main tenant. This is what I did when I first came to Berlin.
In some cases you might also be able to do this if you are staying in a pension or hostel for more than a few days. Strictly speaking the Burgerbüro people are not supposed to accept hotel type accommodation as a residential address for registration. Try to avoid mentioning the name of the place by just giving the street address. There is a possibility it may still be rejected, but on the other hand you may be in luck. It’s a bit of a lottery.
When you move into a permanent apartment of your own (or a flat share), then you will still have to go back to the Burgerbüro and re-register your new changed address once again.
It’s possible also that the bank may want to see a contract of employment and/or salary statement. If you’re a student and you want an account with student benefits, then you will need to bring documents to prove your student status.
If you are opening a bank account online or with an online-only bank such as one of the banks mentioned above, then you can use the Postident service which is offered by Deutsche Post.
This can be done in person at the branch of the bank in question. Alternatively it can sometimes be done by means of the PostIdent procedure.
This is a service provided by the German Post Office free of charge to the public.
You take your application documents and identity (passport or national identity card if you are from the EU Schengen Area) along in person to a Post Office branch and the postal clerk will certify your identity on the spot, complete the forms and send them on to the bank concerned at no cost to you.
If you are opening an account at one of the old-style branch banks, then depending on the branch and staff availability, you may be required to make an appointment before opening an account.
As with the online banks, many of these large banking chains now offer free gifts to get customers to sign up.
Be aware that a common practice among most of the big banking chains when you open an account is to try and sell you other banking products which you don’t really need.
They may also ask you if you want to receive circulars by post and/or email. You may or may not want to permit them to send you spam in this way!
My advice: Be firm and reject any attempt to sign you up for services that you don’t want.
Sparkassen are a German local tradition found throughout the country. Every city and town has a state-owned bank called a “Sparkasse”, literally, “Savings Bank”.
The Sparkassen are locally focused banks which are often the bank of choice for local businesses and local people. I don’t have any personal experience of the Sparkassen other than once having a savings account with them. However, I know some people say the Sparkassen are a little bureaucratic and inflexible and a bit “toytown” – particularly when it comes to processing international transactions.
The Sparkassen all belong to a nationwide network called the Sparkassenverbund, which enables account holders to conduct business from any Sparkasse branch or Sparkasse ATM anywhere in Germany.
The network in Berlin is called the Berliner Sparkasse.
Berliner Sparkasse has a good network in Berlin with around 170 branches. Be aware that the basic Sparkasse account at Berliner Sparkasse only comes with a service card (known as “SparkassenCard”) and not an EC-Card.
Bank Account Numbers And Other Banking Stuff
Finally, some info about how bank account numbers work in Germany.
Girokontonummer (account number) and Bankleitzahl (Sort-Code)
A bank account number in German is called a Girokontonummer.
Usually your main current or giro account ends with the digits 00. Any additional accounts such as a savings account will use the same number but end with a different digit or two digits, such as -10 instead of -00.
A bank sort-code is called a Bankleitzahl or BLZ. If anyone wants to transfer money to you then you need to give them your bank account number and the BLZ number.
Unlike in the UK where some people seem to have a paranoia about “giving their bank account details” to other people, in Germany there is no such concern and very little fraud.
Businesses in Germany even state their bank account details – account number and BLZ openly on their websites. It’s also common for Germans to include their banking details on Ebay in the same way. The direct transfer banking system in Germany does at least seem to work well.
Each banking chain has its own BLZ (in some cases more than one for different purposes). To avoid delays or processing problems with transactions you should always use the one which is specified for your account.
Sepa or Single Euro Payments Area
However, a new system has now come into operation called SEPA, which stands for Single Euro Payments Area. This is an initiative to standardize the different banking account and sort-code systems in Europe and make it easier and cheaper to make transactions within Europe.
The idea of SEPA is also that the same charge is levied for an international transaction between two European countries as is levied for a purely domestic transaction. So SEPA is good news for customers.
Not so good is the way the SEPA system has been implemented. Instead of combining bank account number and sort-code into one new single number, which is how I thought they were going to do it, the SEPA system uses two new numbers, called the IBAN and the BIC.
The IBAN or International Bank Account Number
The IBAN is a new monster-length bank account number consisting of no less than 34 alphanumeric characters (yes you read correct). This includes a country code, two check digits and the actual bank account number itself.
The BIC or Bank Identifier Code
The BIC (Bank Identifier Code) is the SWIFT Address that is assigned to a bank for processing automated payments quickly and accurately. This identifies the name and country of the bank. The BIC replaces the old BLZ bank sort-codes.
BICs are sometimes called SWIFT Codes and are usually either 8 or 11 characters long.
IBAN and BIC are not just used for the SEPA area in Europe – the idea is that they will be used worldwide as well.
The banks basically want everyone to switch over to using this SEPA system – which means using the 34 digital IBAN account numbers and the 11 digit BIC rather than the old system of 9 digit bank account number and 9 digit BLZ. Never make things more simple when you can make them more complicated!
Well that concludes this look at the banking system in Germany.
Good luck with opening your new bank account in Berlin!
One more thing…
Get the Best out of Berlin by Learning German
About the best thing you can do to get the best out of your stay in Berlin is to learn to speak German as soon as you can.
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