Banking in Germany for Expats and Locals

Banking in Germany can be a bit of a challenge, especially for expats. You'll need to open a German bank account to receive your salary, pay bills, and access various banking services.

The most popular banks in Germany are Deutsche Bank, Commerzbank, and Sparkasse. These banks offer a wide range of services, including online banking, mobile banking, and international banking.

To open a bank account in Germany, you'll typically need to provide proof of identity and address. Some banks may also require a minimum deposit or a German tax ID number. This can be a hurdle for expats who don't have a German address or tax ID number.

Many banks in Germany offer multilingual services, including English-speaking staff and online banking platforms. This makes it easier for expats to navigate the banking system.

The German banking system is quite unique, with three main categories of banks: private commercial banks, public savings banks, and cooperative banks. These institutions have been a cornerstone of German finance for a long time.

Each of these categories has its own distinct characteristics and serves a specific purpose in the market. Private commercial banks are the most common type of bank in Germany, with many international banks also operating in the country.

Public savings banks, on the other hand, are owned by the local government and focus on providing financial services to the local community. They often have a strong social focus and prioritize the needs of their customers over profit.

Cooperative banks are member-owned and operated, with customers who share a common goal or interest coming together to form the bank. This model allows for a high level of community involvement and decision-making.

In addition to these traditional types of banks, Germany has also seen an increase in mobile banks, which offer banking services through digital channels. This shift towards mobile banking has made it easier for people to manage their finances on the go.

For expats and English speakers, online banks like N26, Tomorrow, and Bunq are highly recommended due to their digital sign-up process, competitive prices, and English support.

These banks provide a range of services and features tailored to meet the unique needs of expats and English speakers living in Germany.

N26, in particular, offers fee-free international money transfers, making it a convenient option for those who need to send or receive money internationally.

In Germany, you can find a range of online-only banks that offer convenient services for expats and English speakers.

Many of these online banks have a digital sign-up process, competitive prices, and English support, making them a great option for those who want to manage their finances easily.

Some popular online-only banks in Germany include bunq, N26, and Tomorrow, which offer a range of services and features tailored to meet the unique needs of expats and English speakers living in Germany.

These banks generally offer lower fees and telephone-based customer service in English, making them a great choice for those who want to avoid the hassle of traditional banking.

Here are some of the online-only banks operating in Germany:

These banks are a great option for those who want to handle their banking via a mobile app, with many offering all of their services in English.

In Germany, the most common form of loan or money-lending is an arranged overdraft with your bank.

You can usually get an overdraft after six months of being with your bank, as long as you have a regular salary. Overdrafts are typically up to three times your monthly income.

If you only need to borrow a small amount, you can use a credit card.

Loans can also be arranged through your German bank, but approval depends on how much you wish to borrow, your credit rating, regular income, and residency status.

It's worth noting that overdrafts and loans from your bank usually come with an additional monthly fee.

Public savings banks and cooperative banking associations focus on small and medium-sized businesses and local investment. They often have nationwide branding, but each regional bank operates as its own separate entity.

Sparkasse is the biggest public savings bank in Germany. Volksbank is another major public savings bank in the country.

These local banks play a crucial role in supporting local economies.

Online transfer services can be a cost-effective way to send and receive money in Germany. They work by matching you with people sending money in the other direction, so your money doesn't even leave the country.

Some popular online transfer services in Germany include Currencies Direct, XE, Wise, and TransferGo. These companies offer competitive rates for online money transfers.

If you're looking for a reliable online transfer service, consider using Wise, which offers advantageous exchange rates and reduced fees compared to banks. You can also use XE.com, another cost-effective option for international money transfers to a German bank account.

N26 is another great option for international money transfers, offering fee-free transfers to make it a convenient choice for those who need to send or receive money internationally.

Online and mobile payments are becoming increasingly popular in Germany, but they still have a way to go to catch up with other European countries. Only around 11% of smartphone users make payments with payment apps, but online payments are more common through debit and credit cards, especially with PayPal.

Google Pay, Apple Pay, and mobile banking apps are also widely used for e-payments. If you're planning to make payments on the go, it's worth noting that cash is still a very popular method, used in around 40% of transactions.

For international money transfers, online transfer services like Currencies Direct, XE, Wise, and TransferGo offer competitive rates and convenient transactions.

Germany is a Eurozone country that uses the euro, which replaced the Deutsche Mark in 2002. The euro is used by 20 EU member states.

The current value of the euro is 1.12 against the British pound and 0.88 against the dollar. This affects how much you'll get for your money when traveling between these countries.

Coins in circulation in Germany include 5, 10, 20, and 50 cents as well as €1 and €2 coins. You'll also see these coins in everyday use, especially for smaller purchases.

Notes include €5, 10, 20, 50, 100, 200, and 500. Notes of €100 and above are relatively uncommon in everyday retail transactions.

In Germany, you'll find ATMs at bank branches, supermarkets, shopping centers, train stations, and main streets, making it easy to access cash when you need it.

Using ATMs is free, but be aware that there may be a charge of up to €5–10 if you use an ATM at a different bank.

Some banks have partner agreements for fee-free transactions, so it's worth checking with your bank to see what agreements are in place.

The three major German banks – Deutsche Bank, Commerzbank, and HypoVereinsbank – cooperate as the Cash Group, allowing you to make free withdrawals at each other's ATMs.

You can find the nearest ATM that takes Visa cards in Germany here, Mastercard here, and American Express here.

Online payments are a convenient way to make transactions in Germany, but the country lags behind in mobile payments. Only around 11% of smartphone users make payments with payment apps.

PayPal is a very popular option for e-payments in Germany, while other commonly used service providers include Google Pay, Apple Pay, and mobile banking apps. These apps can be used for online transactions, making it easy to shop and pay bills from the comfort of your own home.

For online payments, debit and credit cards are also widely accepted in Germany. You can use your card to make purchases online, pay bills, or transfer money to others. Many Germans prefer to use their cards for online transactions due to their convenience and security.

Here are some popular online payment options in Germany:

Keep in mind that cash is still a popular payment method in Germany, used in around 40% of transactions. However, online payments are becoming increasingly popular, especially among younger generations who prefer the convenience and speed of digital transactions.

Fees in Germany can add up quickly, so it's essential to understand what you're getting into. Current accounts can range from being free to around €5 a month, and ATM use is free if you use a machine from your own bank.

Debit cards are usually free to use, but credit cards can vary in cost, with some providers charging in excess of €100 annually, plus APR fees. Overdraft interest rates are typically between 4-12%.

Money transfer costs also vary, with SEPA transfers usually being free or around €5 for instant payments. Transfers to non-EU/EFTA nations can start at around €10, with larger payments costing more.

To stay safe while banking in Germany, never click on a link to your bank's website in an email, and always type the website address directly into the address bar. Never give out your password or PIN number in an email, over the phone, or on a third-party website.

So you're getting ready to return something, whether it's a purchase or a service. You're in luck because many companies offer a refund or exchange within a certain timeframe, typically 30 days.

The return process can be done online or in-store, depending on the company's policy, and some even offer free returns. For example, Amazon offers free returns on eligible items.

You'll need to provide a valid reason for the return, which can be due to a change of heart, a defect in the product, or if it was misrepresented. Keep in mind that some companies may have specific requirements for returns, such as providing a receipt or proof of purchase.

Some companies will also offer store credit instead of a refund, which can be a good option if you're looking to make another purchase soon. This can be a win-win situation, as you get to keep shopping and the company gets to keep your business.

Fees can be a real surprise when you're not expecting them. Current accounts in Germany can range between being free and around €5 a month, sometimes a bit more.

Banking fees in Germany can add up quickly, especially if you're not using ATMs from your own bank. ATM use is free if you use a machine from your own bank but you may be charged around €5-7 if you use an ATM belonging to a bank that doesn’t have an agreement in place with your bank.

Some bank services are free, while others come with a price tag. Debit cards are usually free to use, but credit cards can vary between being free and costing in excess of €100 annually, plus APR (annual percentage rate) fees.

Loans and mortgages in Germany also come with fees. Costs depend on APR, plus some providers may also attach additional fees. Overdraft interest rates are usually between 4-12%.

Money transfer costs can be a mystery, but they usually depend on where the money is going, how much is being paid, and how quickly you want it paid. SEPA transfers are usually free (or around €5 for instant payments).

Banking security and fraud in Germany are becoming increasingly sophisticated. Around 800,000 incidences of bank card fraud occurred in Germany in 2016, resulting in €132 million of damage.

You can protect yourself against these scams by being cautious online. Never click on a link to your bank's website in an email - always type the website address directly into the address bar.

Phishing is a common scam to watch out for, where someone tries to access your account password details online or over the phone. Be careful not to give out your password or PIN number in an email, over the phone, or on a third-party website.

Online payments should always be made using a secure payment platform. This will help keep your financial information safe.

To stay safe, never store personal data on your mobile device. This includes not storing your bank account information or passwords.

German banks have improved their security measures in recent years, with online and mobile accounts moving away from password protection and using biometric ID security, such as fingerprint or face recognition.

If your bank card gets lost or stolen, inform your bank immediately and block your card by contacting the freephone 116 116 number. If you lose a girocard, you can call 01805 021 021.

If you're unhappy with the way you've been treated by a German bank, you should first try to resolve it through the complaints department of the bank.

You can make a complaint to the independent Financial Ombudsman in Germany if the issue can't be resolved through the bank's complaints department. The service is free, although you'll need to cover costs like postage or legal fees if you consult with a solicitor.

You can still take legal action through the German courts if you're unhappy with the outcome of your complaint to the ombudsman.