Today we’ll talk about the banking overview in Germany. You’ll get all the information about opening a bank account in Germany. What documents are mandatory for the citizens and foreigners? A little bit overview about the banks available in the country.
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Germany Banking Overview
Germany’s banking system is known as the three pillar banking system. This banking system comprises public savings, commercial, and cooperative banks. Apart from these, many online banks, mobile banks, and international banks are in Germany. The foreigners who are moving to the country or are working over there can choose from comprehensive options of online banks, German banks, and international banks. The private commercial banks are the largest sector and makeup around 40% of the banking assets in Germany. Other banking partners are also available, but they are only a tiny number. Most of the centralized banks and regional banks in Germany are smaller. Apart from this, there are 371 credit institutions, including banks in Germany. 987 local cooperative banks and 421 local saving banks are also available.
While staying in Germany, it is not mandatory to open a bank account with a German bank. Definitely, you need a bank account to send and receive the money. You can open an account with an international bank or with a Germany-based bank. You will require a bank account to make the utility bills and German insurance payments. If you want to take a German mortgage, you must prove an active account in Germany.
Whenever you move to Germany and you do not have a bank account, in that case, you can make the transactions through your overseas bank account. Most businesses accept international debit and credit cards such as MasterCard, Visa, and American Express in Germany.
Types of Banks in Germany
If you are looking for a bank account in Germany, you have many options. Simply select the bank in which you want to open a bank account. As discussed above, the banks’ options in Germany; are public savings banks, private German banks, cooperative banks, international banks, and online banks.
Here is the summary of the offers provided by these banks. It will be easy for you to compare the banks, and you can choose the bank account according to your requirements.
- Private German Banks: Opting for more extensive and popular German banks may be wiser for foreigners. Private German banks have more experience working with foreign customers and foreign banks. These banks are more accessible, especially when you are traveling abroad. Private German banks can offer you an active account with a starting balance, online and mobile banking, money transfer options, MasterCard debit and credit, free cash withdrawals at all ATMs, and international health insurance options. Deutsche Bank, Commerzbank, and HypoVereins bank are private German banks.
- Public Savings Banks: Public savings banks are held by public shareholders as cities or communities. These banks are very popular with German customers. Public savings bank provides you basic account to open. The bank will offer you an EC card, a debit card, and mobile banking options, and you can choose the different account models. Public savings bank also provides an instant savings account and a fixed-term deposit account. It is mandatory to be a German resident to open a bank account with a public savings bank. BerlinerSparkasse, Stadtsparkasse Munich, and Frankfurter Sparkasse are well-known public savings banks.
- Cooperative Bank: Cooperative banks and credit unions are the third pillar of the German banking system. Most of the banks operate under the Raiffeisenbanken and Volksbanken umbrella. The cooperative bank offers different current accounts. The bank provides free banking, money transfers, debit card payments, and online banking in the primary account. Cooperative banks are famous for their communal approach to banking.
- International Banks: Germany is one of the leading post-industrial economies globally. The country is a famous location for international business. That’s why you can easily find local branches of many international banks in Germany. The benefit of international banking is that you can transfer the funds from your local country’s bank account to a German branch. International banks offer you expat-friendly services and similar accounting options at the same prices as most German banks. International banks are Barclays Bank, Santander, HSBC, Citibank, ING Bank, and BNP Paribas.
- Mobile Banks: Mobile banks are also known as digital banks in Germany. These Banks don’t offer local branches; they only use the cash machine of the other banks. Mobile banks are famous for their cost-saving to provide more financially attractive conditions. Some mobile banks offer free banking services with no minimum deposits. The popular online and mobile banks are bunq, DKB, N26, Revolut, and Wise.
How to Apply for a Bank Account Opening in Germany
When you move to Germany, you will not have any problem opening a simple bank account with a German bank. For foreigners, it’s mandatory to prove their registration in Germany along with a German work permit. In Germany, banks are not obliged to open a bank account for you. If you cannot show a financial history, you might face difficulties opening a bank account. The best way to open an account in the bank you should go to the bank physically with your required documents. Before moving to the country, you need to sort out your German visa and have a German address. This will be helpful for you to open an account with a German bank before your arrival. Usually, it is an easy process to open an account with a German bank after relocating to the country.
Some mobile banks, bunq, DKB bank, ComDirect, and N26, allow foreigners to open a bank account from abroad. You can also submit your documentation online to open an account with mobile banks. These banks also allow you to open an account in a few minutes using your mobile phone.
You can also open digital and mobile accounts with a few German banks. For the account opening, you don’t need to visit the bank branch physically if the bank is offering you the facility of online documentation collection. Suppose you already have an account with the bank and want to switch to mobile banking for this. In that case, you simply download the mobile banking application on your mobile phone. The procedure for account opening with mobile banking and online banking is effortless. You need the email address, mobile phone number, and valid ID for the account opening process.
Documents Required for a Bank Account Opening
To complete the process of an account opening in Germany, you must have the following documents.
- You should have a passport and photo ID and a valid visa or residence permit.
- Address proof is also mandatory.
- Most banks require evidence of income and employment. It depends on the account which you want to open.
- Proof of being a student is required to open a student account.
- Some banks may require your credit rating.
- You need to prove your identity online or at a post office by following the post ident procedure.
In Germany, account opening generally takes 2-3 business days.
As per the German government rule, the German banks are open from 8:30 am to 4 pm on weekdays. On Thursdays, banks’ working hours are from 8:30 am to 5:30 pm or 6:30 pm. Most of the small banks are shut at lunchtime.
Many expats prefer CommerzBank or Deutsche bank and many find N26, Revoult as the entire process is online and you don’t need to visit a bank branch, always compare the features like monthly charges, free debit card, credit card, customer service support in the English language, etc while opening a bank account.
In Germany, you will get the banks accordingly to your requirements. You should consider several factors before selecting the best banking option. The main element is the cost; however, many banks offer bank accounts for free with limited services. English language services are also essential. To get the English-speaking staff, mobile applications, and websites, altogether choose the international and mobile banking services. The range of products and services is also a mandatory factor. Therefore, go for free worldwide withdrawals and low-cost international money transfers. Moreover, banking should give you 24/7 access to your account. By following this article, the banking process in Germany will be straightforward for you. Additionally, you can refer to our guide Bank Account Comparison to choose the best option as per your requirement.