How to open a bank account in Germany as a foreigner: a comprehensive guide

Getting a German bank account as a foreigner

Are you an expat or foreigner in Germany looking to open a bank account?

As an expat or foreigner in Germany, it is important to find a bank that understands your unique needs and offers services that cater to your situation. Read on for everything you need to know about banking in Germany and how to open a bank account in Germany.

Four questions you can immediately ask yourself to choose the best bank for your banking needs in Germany:

• Are you happy with online banking? Or do you also want a bank with physical branches for your banking in Germany?
• Do you speak German well enough to handle your finances fully in this language? Or do you require a bank with an English website and English-speaking representatives?
• What will you mainly use your bank account for? Savings, loans, international transfers, etc.?
• Are you willing to pay a small quarterly fee for preferred customer service? Bank fees vary, so it pays to shop around.

Once you have chosen a bank, complete the online application, open an account at a local branch, or create an account directly in the bank’s mobile app. It is advisable to open your bank account as soon as you arrive in Germany as it is a requirement for many further mandatory steps when living in Germany.

Overview of the Euro & the unique German banking system

The Euro

For more than 20 years, the Euro (€) has been the official currency of the European Union. You can pay with it in 19 European countries. The Euro is a very stable currency with a low inflation rate that is generally below 2%. However, due to the worldwide situation, the inflation rate has been significantly higher than usual in recent times.

If you were used to simply swiping your card or even paying with your phone in stores in your home country, you’d be surprised by the Germans’ love for cash. This may be related to their desire to control spending habits and their need for data protection and security. However, since the Covid-pandemic, this has taken a 180-degree turn, and contactless payment is now the preferred option in most shops, gastronomy, and other stores.

Nonetheless, ATMs (Geldautomaten) are commonly found in cities, train stations, airports, and other points of interest. Larger supermarkets and drug stores often offer the option to withdraw money from the current account, given that a minimum purchase has been made at the store.

The German universal banking system

Germany’s banking system is based on three pillars.

• Private commercial banks (Privatbanken)
• Public savings banks (öffentlich-rechtliche Kreditinstitute)
• Cooperative credit banks (Genossenschaftsbanken)

German private commercial banks like the Cash Group (Deutsche Bank, Commerzbank, HypoVereinsbank, Postbank) are typically larger banks that operate nationally and internationally. As such, customers benefit from a large network and availability as well as a large variety of products, from loans to investments, insurance, and more. Branches are widespread, and withdrawing cash at ATMs is free within the Cash Group.

The German public savings banks are called Sparkasse and their respective state banks (Landesbanken). As the name suggests, these banks are owned by municipalities, states, or other public bodies. They usually operate regionally and focus on loans and savings. Additional services and international transactions may be limited.

The largest German cooperative credit banks are called Volksbank and Raiffeisenbank. Members of a cooperative bank are owners at the same time. Cooperative credit banks are often smaller and geographically constrained, usually only providing loans to borrowers in their administrative district.

For foreigners and expats, it may be worth noting that larger international banks generally offer services in English and other languages, while smaller regional banks may not.

Types of German bank accounts for expats and foreigners: branch, direct, challenger

All banks mentioned above can be categorized as branch banks. International banks like Santander and Credit Suisse, which have branches in Germany, also fall under this category.

Besides, there are direct banks (mobile/online banks only). Germany’s largest ones to choose from are DKB, Comdirect, Targobank, and ING-DiBa.

Finally, challenger banks address a younger target audience used to mobile banking, financial transactions, and investing on the go. The largest ones to choose from in Germany are N26, Tomorrow, Wise, Revolut, and bunq.

Current account comparison

Comparison of current accounts/checking accounts for expats in Germany in 2023

Types of German bank accounts & cards

Types of bank accounts

Generally, German banks offer these four types of accounts:

• Current account/checking account (Girokonto)
• Savings account with instant access (Tagesgeldkonto)
• Savings account with limited access (Sparkonto, Festgeldkonto)
• Securities account for trading (Depot)

Typically, you will open a current account first. With this, you will receive an International Banking Account Number (IBAN) for international transfers and a physical card for ATM cash withdrawals.

Depending on your needs and choice of bank, you can also request to open the other types of accounts mentioned above. However, these don’t typically come with a physical card and are mostly intended for online use or operations carried out by a bank representative at a local branch.

With the current account, most people also apply for a credit card as it makes traveling and online payments easy, quick, and secure. Depending on the bank you have chosen, the benefits and costs vary.

Types of cards

Keep in mind the different types of physical bank cards you may need.

Typically, Germans have one debit card and one credit card. While the situation may be different abroad, most Germans only have their accounts and cards with one bank of their choice and trust.

• Girocard (EC card): linked to your current account for payments in shops and stores or ATM withdrawal; not suitable for online purchases.
• Debit card: linked to your current account, you have to transfer a balance onto this card to use it. Suitable for online purchases, ATM fees for withdrawal commonly occur, and payment options in German shops and stores are limited.
• Credit card (Visa, Mastercard) with a credit limit that varies according to your bank. ATM fees typically occur, and payment options in German shops/stores are limited.

Next, let’s look at the different payment methods you can expect in Germany (or not).

Payment methods in Germany

• Cash: this used to be the preferred payment method, which has changed since Covid.
• Checks are uncommon.
• Contactless payment with debit cards: most common since Covid.
• Credit cards: common for online payments but only accepted in some physical stores in Germany.
• Most contactless payment terminals and online shops accept Apple Pay and Google Pay.
• Mobile payments like AliPay or WeChat Pay are not yet widespread in Germany.

So, have you made up your mind? Are you ready to open a German bank account? Let’s do it together with this simple guide.

How to open a German bank account for foreigners

The process of opening a bank account in Germany is straightforward. Depending on your bank of choice, you can submit an online application, apply in person at a local branch, or register your account conveniently on the bank’s app.

Required documents

Some banks may ask for more documents, especially when foreigners apply, while other banks (typically direct/challenger banks) have sleeker and easier processes.

• ID (passport, national ID card)
• German address registration (Meldebescheinigung)
• Application form

Depending on the bank, you may also be required to present the following documents:

• Immigration status (visa, residence permit)
• Payslips (typically the previous three months)
• Employment contract
• Credit score (Schufa)

Now, depending on which bank you choose, you can apply through the bank’s website, in person at the branch, or using the bank’s app.

How to open a bank account in Germany online

1. Go to the bank’s website.
2. Download and print the application form. Conveniently fill it out at home.
3. Send it to the bank via regular mail (emails are not accepted) with a copy of your ID and address registration.
4. Receive confirmation about your account from your bank via regular mail.
5. Receive your debit and credit cards (if applicable) and pin codes via regular mail.

Since this process involves a lot of legwork, consider applying for a German bank account directly at a local branch of your selected bank.

How to open a bank account in Germany at a branch (in person)

1. Make an appointment (recommended).
2. Obtain the application, fill it out, and submit it to the bank representative.
3. Present your ID and address registration.
4. You will receive a letter of confirmation via regular mail.
5. The bank will send your debit and credit cards (if applicable) and pin codes separately via regular mail.

If you apply for a credit card, the bank will typically check your credit score (Schufa).

How to open a bank account in Germany with a direct or challenger bank

1. Download the bank’s app.
2. Fill out the registration form.
3. Receive a video call to verify your ID (if applicable).
4. Receive instant account feedback in the app.
5. The bank will send your debit and credit cards (if applicable) and pin codes via regular mail.

The advantage is that you can typically already do this while abroad. So, you don’t have to wait until you have entered the country and can start banking in Germany as soon as you arrive. Plus, direct and challenger banks typically also offer their services in English.

How to get a blocked bank account (International students in Germany)

If you are a student, one requirement is proof of funds to support your living expenses, which is done through a deposit into a blocked bank account (Sperrkonto).

Direct/challenger banks typically don’t offer blocked accounts as part of their services. Larger regional or international banks like the Cash Group or Sparkasse are more suitable.

Remember to prepare your student ID or proof of admission to register a blocked account.

A few common terms

• TAN (Transaction Authentication Number): to authenticate online transactions on your bank’s website or in the app; depending on the bank, you can receive the code via text message or a separate banking app
• SEPA (Single Euro Payments Area): For efficient transfers within the EU, using your IBAN

So, what is the best German bank for foreigners and English speakers? This largely depends on your personal needs and requirements. Take Nioomi’s short quiz to determine which German bank is best for your situation.

Key takeaways

• A German bank account is required to pay your rent, receive your salary, and make online purchases for everyday and special items.
• While opening a German bank account with an online or challenger bank is quicker and easier, their range of services is less extensive compared to branch banks.
• Choosing the right bank in Germany for your situation and needs can be confusing and stressful. Let Nioomi assist you with this process!