A quick note on the history of banking in Germany
Germany boasts a rich banking tradition dating back to the 16th century, characterized by merchant bankers and 19th-century industrial financiers.
The banking landscape comprises savings banks, regional banks, cooperative banks, and multinational private banks, known for their conservative approach and consumer-focused services.
Banking System in Germany
Germany’s banking system encompasses private commercial banks, public sector banks (Sparkassen and Landesbanken), and cooperative banks (Raiffeisenbanken), each catering to different needs and preferences.
Private Commercial Banks
- Control nearly half of all German assets and dominate international trade finance.
- Deutsche Bank stands out as the largest private bank in Europe.
Public Sector Banks
- Comprised of Sparkassen and Landesbanken, serving local communities with a focus on reliability and stability.
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Cooperative Banks
- Known as Raiffeisenbanken, these banks prioritize community service and are considered less risky.
Types of bank accounts in Germany
Various types of bank accounts are available in Germany, with the Girokonto (current account) being the most common. Expatriates may also opt for a Sperrkonto (blocked account) for visa purposes.
Girokonto
- Equivalent to a checking account, offered by international and local banks.
- Consider account fees (Kontoführungsgebühren) before choosing.
Sperrkonto
- Essential for non-EU nationals as financial proof for visas.
- Can complement a Girokonto for managing income and savings.
How to open a German bank account
Opening a bank account in Germany is straightforward, with traditional and online options available. Requirements typically include proof of identity, residency, and income.
Documents Required
- Passport, valid German visa, proof of enrollment or employment, and Meldebescheinigung (proof of address).
- Some banks may request proof of income.
Online Banking
- Popular mobile banks like N26 and Bunq offer fully online account opening within minutes.
Traditional Banking
- Visit a local bank branch for more complex services like credit cards and overdrafts.
- Commerzbank is recommended for those preferring physical branches.
Bank transfer
Transferring money within Germany or internationally is made easy by German banks, with options for online transfers and services like PayPal.
Domestic Transfers
- Conducted via online banking portals, apps, or in-branch visits.
- Set up standing orders for regular payments.
PayPal
- Widely used for shifting money between accounts or managing self-employment income.
Transfer Duration
- Transfers within the same bank are usually immediate, while interbank transfers may take 2-4 working days.
Recommended Banks in Germany
Several banks cater to international residents in Germany, offering features like English support and fee-free transactions.
N26
- Fully licensed German bank with a simple online application process.
- Free account, virtual card, and 24/7 English support.
Commerzbank
- Ideal for those under 30 seeking traditional banking services.
- No account fees and offers both Visa credit cards and Girocards.
Postbank
- Retail banking branch of Deutsche Bank, providing physical branches and mobile banking services.
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