Having a bank account is one of the fundamental requirements of modern life. As a student you need to have either a blocked account or ordinary bank account through which you can manage your expenses. As an employee you need a bank account to receive your salary and use it for your expenses and savings. As a freelancer or entrepreneur you need to work with your bank account.
What bank accounts are available in Germany?
Your Home Bank
German banking system is divided into three sections: private, public and cooperative banks. There are also many foreign and international banks that are operating in Germany. Depending on your purpose for having the bank account, different bank accounts can be considered.
It may be the case that your bank in your home land is joint with one of the German banks. Accordingly you can almost receive the same services such as receiving cash from ATM, depositing money, transferring funds and using card-based payments in Germany as in your home land. However usually this is not the case and you need to open a new bank account in Germany in order to be able to use the banking services.
Current Bank Account
You need to have a current bank account in Germany (Girokonto). By this account you can also ask for a prepaid card which is a kind of visa card and you can use it for your online transaction. The visa prepaid card is not a credit card and you cannot use it for purposes that need a credit card, such as renting an auto. You normally get online access for your card and can transfer money also online from your account. Most of the banks in Germany charge their customers for something around 3-6 Euro for grant of a current account. In some cases, when the monthly income is generated in the current account, banks consider no handling fee for the account.
Depending on your bank ATM network, you can withdraw from other bank’s ATM as well. Otherwise, there is a fee deducted automatically from your account for withdrawing money from a non-joint ATM.
For many students having a blocked account (sperrkonto) is required. Not all the banks in Germany provide this service. Deutsche Bank, Fintiba, X-patrio and Coracle provide this service against a charge. Based on the changes in 2020, you need to pay the amount of 10,236 Euro covering your expenses as student for living one year in Germany. You are allowed to withdraw the amount of 853 Euro monthly from this account.
Depending on which country you are from, you may be required to open the blocked account before your arrival in Germany. It may be required for your student visa. You need to check that with your local German Consulate.
As student you may have the advantage of having a free account. Sometimes there is also an age condition to be younger than 30 for having a free bank account.
Sparkasse banks are very popular in Germany. Sparkonto or saving account is a saving account similar to fixed or term deposit. You get some interest on the money but this varies from bank to bank. In general, it ranges from 2-4%. Premature withdrawal is not so easy. Sparkasse banks have numerous branches in each city. Although the name is common for different ,but each Sparkasse is an independent entity.
Online Bank Account
Online banks are also growing in Germany. One of the advantages of online banks is that they are free of cost. However they do not have any physical branches or cashiers and all the money payment, withdrawal and services should be conducted online or by cooperation of the hotline services.
If your German is not good, it is advisable to look for banks with good English support. N26 is one of the new online banks that operates in Germany as well and provide a good support in English.
As an employee you will have better chances to open bank account, get VISA and credit card, and use various advantage of online banking and online account free of charge. You can look for banks that offer free account if your deposit or monthly income is higher than a verified minimum. You can also look for banks that in the future can support you by giving loan or mortgages for buying house.
If you are using a credit card, be careful with the interest rate when you are in an overdraft. The interest rate differs from bank to bank that you can check it out by asking banks around.
If you have a business or company (for example GmbH or UG)you may need to open a business bank account for your enterprise that is different from normal bank accounts that is opened for personal use. The fee that banks charge for the business account is higher than for ordinary account. It can be around 10 Euro each month, although some banks offer the account for free if the deposit is higher than a limited stand.
In the business account, you can proceed with all transactions of your company or business.
Account for Freelancer
As a company holder it is obligatory to open a business bank account, but as a freelancer or self-employed you do not need to necessarily have a corporate or business account.
If you are freelancer or have a partnership, it is better to dedicate a separate account to your business transactions. It will be easier for accounting records and tax declaration process. If your business account would not be separated from your personal account, you need to disclose the whole transactions for the tax processing and it is also not clear with regard to your salary payments from your business.
What documents are needed?
Your German ID that also have your address. Your student card and if you have a part time job, you can also provide your salary slip as an evidence for your financial stability, although you should not expect to get a credit card on your account. Your passport may also be needed while for some nationalities it is harder to open bank account in Germany.
You may be required to provide different declaration for due diligence or money laundry regulations of the bank. Therefore do not get annoyed, if you are required to fill out such forms for opening the bank account.
Registered businesspeople (eingetragene Kaufmann – e.K.) must provide a certificate of incorporation and later submit the extract from the commercial register and, if applicable, the trade licence.
For corporations, on the other hand, the bank requires more documents. Founders of a GmbH, UG or AG must submit not only proof of identity, the list of shareholders (Gesellschafterliste) and articles of association (Gesellschaftervertrag) but also certificates of incorporation (Gründungsurkunden). Schufa may also be required in some cases.
Freelancers and Partnership
As a sole proprietorship (Einzelunternehmen), you only need proof of identity to open a business account. This is the same for freelancers (freiberufler);
Partnerships (Personengesellschaften) such as oHG or GbR must submit proof of the identity of all partners in addition to the articles of association (Gesellschaftsvertrag) when opening a business account.