Expats living or working in Germany will come into contact with the German banking system sooner or later - no matter whether they need to open a bank account to receive their salary or simply want to transfer money to and from abroad.
The banking system in Germany
Banks in Germany fall under three different categories, which make up the "three pillars" of the German banking system: private commercial banks, public savings banks and cooperative banks. These institutions all exist alongside international banks and an ever-increasing number of mobile banks.
Private commercial banks
These private banks have branches across Germany, offering everyday banking services as well as wealth management, real estate and investment banking:
Direct & Mobile banks
The number of online-only banks is steadily increasing Germany. These institutions, which generally offer lower fees and telephone-based customer service in English, all operate in Germany:
- Bunq (link only accessible from Germany, the Netherlands and France)
- N26
- Tomorrow (climate protection with every euro and a free Visa debit card)
Public savings banks and cooperative banking associations
These local banks focus on small and medium-sized businesses and local investment. Although they have nationwide branding, each regional bank operates as its own separate entity. The biggest public savings banks in Germany are:
- Sparkasse
- Volksbank
Business bank accounts
If you are starting your own business in Germany, you'll need a separate business bank account. While many of the above banks offer business accounts, these companies specialise in business banking for entrepreneurs:
Opening a bank account in Germany
If you are living in Germany (and especially if you are working here), you will need to open a bank account to receive your salary, take out health insurance and pay your utility bills. Our step-by-step guide walks you through the process of opening a bank account in Germany, including setting up internet banking, both as an individual and as a business.
Blocked bank account (Sperrkonto)
A blocked bank account is a special type of bank account that enables the holder to prove that they have sufficient financial resources when applying for a German visa or residence permit. It is "blocked" because it requires the account holder to deposit a pretermined lump sum of money, which can then only be withdrawn in monthly instalments.
You can open a German blocked account from abroad in English with one of the following companies:
For more information on opening a blocked account in Germany, visit our Blocked bank account (Sperrkonto) page.
International money transfers to / from Germany
From time to time, every expat in Germany will have to transfer money to and from abroad. There are several different methods in Germany of transferring funds internationally - each with its own pros and cons. The best method for you will depend on the amount, type and timing of the transaction.
Online transfer services
Online transfer services offer international currency transfers and payments to both individuals and companies. They work by matching you with people sending money in the other direction, so that your money doesn’t even leave the country. This allows them to offer much more competitive rates than your average high street bank. These companies all offer competitive rates for online money transfers in Germany:
Bank transfer
When considering an international money transfer, most people immediately think of their bank. Most high street banks do offer foreign exchanges as a branch of their services, and allow you to transfer money worldwide using a SWIFT (Society for Worldwide Interbank Financial Telecommunication) code. Banks often charge a flat fee for international transfers, making them a good option if you're transferring large amounts of money. However, they often have higher exchange rates.
Cash remittance
A cash pickup service (the most famous is operated by Western Union) allows the receiver of a transfer to pick up cash from a physical location, as an alternative to having the money sent directly to their bank account. They are therefore often used by individuals who do not have access to formal banking services. You pay an agent in cash, and it is transferred to another agent somewhere in the world and converted into the local currency.
Mobile money
Mobile money is a technology that allows people to receive, store and spend money via their mobile phone. Mobile money is a popular alternative to cash and banks because it’s easy to use, secure and can be used anywhere in the world where there is a mobile phone signal. Plenty of mobile money providers offer the option for users to convert their money between multiple currencies.
Credit cards in Germany
Credit cards are becoming increasingly popular in Germany, with many of the larger banks, such as Targobank and Santander, now offering them to their customers. You can also get a credit card directly from an international supplier such as American Express and Visa. There are various websites where you can compare offers and interest rates to find the best deal.
To be eligible for a credit card, you will usually need to be a resident in Germany and earn a minimum amount of net income per month. You will be asked for your employment contract or payslips as proof of this. The exact income requirement differs from bank to bank. Repayment of credit card debt in Germany is usually done via direct debit on a monthly basis. It is possible to spread repayments over a longer period but you may face much higher interest rates as a result.
Be aware that cash is still a very popular payment method in Germany, used in around 40% of transactions. Many small businesses will not accept payments by credit card.
Loans in Germany
The most common form of loan or money-lending in Germany is an arranged overdraft with your bank. It is usually possible to get one (for an additional monthly fee) after you have been with your bank for six months, as long as you have a regular salary. Overdrafts in Germany are usually up to three times your monthly income.
Loans can also be arranged through your German bank. Whether you are approved depends on how much you wish to borrow, your credit rating, regular income and residency status. If you only need to borrow a small amount, you can always use a credit card.
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