Managing your personal cash flow

No one likes to pay money for withdrawing their own cash. So if you are planning to stay in the country best to get a German bank account and avoid unnecessary fees.

In fact, from receiving your salary to paying the telephone bill–without a bank account you will find it hard to handle everyday transactions. Checks have become virtually extinct in Germany. It doesn’t take much to set up an account, though, and the bank you choose will offer you all kinds of services that you may require during your stay, such as credit cards, money transfer, securities trading, mortgages, as well as savings and investment options. 

Although you need to open a bank account to be able to survive in Germany, it may be difficult to obtain relevant information in English. Most bank brochures are only published in German and not all of the banks’ staff is fluent in English. If you cannot rely on a German friend to come with you when dealing with the bank, the best bet is to try and find an English-speaking employee at a local branch to assist you. Settling your personal finances should be pretty straightforward once you are a bit more familiar with the German banking system.

Choosing a bank

When you look for a bank, in addition to English-language assistance you should inquire about specific services you may require during your stay in Germany. These may include the possibility of opening an account in another currency, fees for money transfers to and from foreign countries and interest paid on foreign currency deposits. Try to obtain as much information as possible on fees, interest rates and other charges, as they can vary markedly between banks and sometimes are not made very plain. 
In contrast to many other countries, almost all German banks charge a monthly fee for current accounts and one-time fees for transactions. Some, however, offer free accounts to students or those with a certain amount of fixed monthly income. 

You will find branches of Germany’s large private banks – Deutsche Bank, Hypovereinsbank and Commerzbank – in all big towns and cities. Public savings banks (Sparkassen) and co-operative banks (Volksbanken, Raiffeisenbanken), which also offer the full range of banking services, have regional branches all across the country and are particularly dominant in smaller towns and rural areas. 

Postbank is the retail banking arm of the German postal operator. You may use its services at most post offices. There are also a number of smaller banks, exclusive private banks and branches of foreign banks spread throughout the country. 

The branch where you set up your account serves as your “local branch office,” but you may carry out transactions at any other branch of the same bank. Opening hours are quite restrictive. Many branches close at 4 p.m.; some will also close during lunchtime. Almost all banks are closed on weekends. 

If individual service is not particularly important for you, you may want to consider an account with an online bank or the electronic arm of a conventional bank. Except for personal service, you basically receive the same range of services while benefiting from lower costs and sometimes higher interest rates. Transactions are typically carried out via phone, fax or Internet. For newcomers with limited German-language skills, it might be a good idea to keep a list of banking terms next to your computer if you’re planning to set up an account with an on-line bank. Very little information in English is to be found on these web sites. 

Retail investors can trade securities at both conventional banks and online brokers. The latter are likely to have more competitive prices, as they do not offer personal investment advice in branch offices. 

Opening an account 

Once you have chosen a bank you can set up an account quite easily. You’ll need to bring a valid passport or identification card, proof of residence in Germany and money for the initial deposit. Your account is opened immediately if you bring cash. It may take a few weeks if you transfer funds from abroad. 

There are a variety of accounts you may want to set up, but only one that is indispensable for making payments: the Girokonto. This is the equivalent of a British current account or an American checking account. You will use this account for the majority of all payments. 

Next to the Girokonto, banks offer savings and other higher-interest accounts. These accounts produce higher yields, but the amount of money you can withdraw may be limited or you may not be able to access the funds for a certain time. This can be inconvenient if you suddenly require a lump sum of money at short notice. Inquire at your local branch about the various possibilities on offer and restrictions that apply.