I’ve already been asked several times, “Where should I open an account? Which bank is the best?”. Actually a logical question, I write about documents, CVs, and other things that are needed, and in fact a bank account is one of the things that should be arranged first. No apartment, no job, no Kindergeld works if you don’t have a bank account in Germany.

Here I will try to explain the differences in terms, what you actually need, and what you need to watch out for. Whether there are differences in banks and their offers, and what makes the biggest difference when we talk about banking services for the “small” consumer.

What do we need to open a bank account?

To open your first bank account, you only need a passport. The bank clerk will fill out the documentation together with you (or you yourself if it is an online bank) and submit a request to SCHUFA to check your creditworthiness. The whole process takes approx. 30–60 min, and immediately after that you will get your account number, which you can use right away. The card and PIN arrive later by mail.

As for the form itself, I intended to find one and translate it, but I think there is no point because they only ask for personal data that everyone knows.

Girokonto, Tageskonto, Depotkonto….

Not every bank account is the same and it does matter which one you choose:

Girokonto is a standard bank account for everyday transactions and payments. Cash withdrawal at an ATM, cashless payment (Überweisung), and online account access are generally available with every Girokonto in every bank. It is the easiest to open and represents the starting point of your banking life in Germany. You cannot even open other accounts until the bank observes your Girokonto for some time. It is not intended for someone who keeps a lot of money in the account.

You can arrange a Girokonto with or without a credit card.

Tageskonto is an interest-bearing account. If you have a certain amount of money that you want to “park” for some time and earn interest, a Tageskonto could be interesting for you. Money paid into a Tageskonto cannot be withdrawn at an ATM, nor can you use it to make payments. That money, if you need it, can be withdrawn, but a Tageskonto is generally much less flexible than a Girokonto.

I did a little research on what kind of interest I can get – if you invest 10,000 euros for 12 months, you can count on approx. 60 euros of interest income. Not interesting for me.

Depotkonto is an account for securities. You don’t need it at the beginning, but as soon as you start investing in stocks and the like, you would have to open a Depotkonto where the monetary value of your securities would be kept. I personally have a Depotkonto, but I will explain why on another occasion.

Differences between banks

Just as there are differences in bank accounts, there are also differences in the banks themselves. In Germany there are 2 types of banks you can choose between, namely Filialbank and Direktbank (I will also mention 100% online banks because they are increasingly on the rise).

Filialbank in Germany

As the name itself says, it is a bank with classic branches. It is often also called Hausbank (house bank).

Commerzbank, HypoVereinsBank, Sparkasse and the like are examples of branch banks where we still have a person at the counter and can talk to someone in person, withdraw money, or deposit it.

The biggest advantage of a Filialbank is personal contact and the possibility of depositing money in the branch with a clerk or at a machine. Because of this, these banks are recommended to entrepreneurs and people who often deposit money into their own or business account.

The disadvantage of a Filialbank is the lack of flexibility and complicated processes compared to online banks, and because of that, often also a higher price due to the greater cost of the “apparatus”.

All Filialbanken in Germany offer online banking to their users, but they do so with rather outdated technology and again direct the user to come to the bank for a conversation. For example, while I use online banking at Hypovereinsbank, I get a notification that they offer me some favorable loan and that I should make an appointment at the branch. A Direktbank or online bank would immediately give you the option there, online, for consultation and arranging it.

Direktbank

Yes, you guessed it, a bank that has no branches and handles all contact with users via telephone, mail, or the Internet.

Some of the best-known direct banks are: Consorsbank, 1822direkt, Fidorbank, Comdirect, Bank of Scottland and the like.

Direct banks do not have branches, which means they also do not have employees in branches. This allows them enormous savings in costs compared to classic banks with branches. That saving, and the smaller size of the bank’s “apparatus”, enables them faster development and greater product innovation, which are then (not always) also cheaper compared to classic banks.

The biggest advantage of a direct bank is flexibility and the offer of products at more favorable prices than with classic banks. In addition, the technology intended for users is much better. The portal and customer service, website or applications for contact with the bank and managing your own finances are generally much better than with classic banks.

The biggest disadvantage is the absence of personal contact with a bank employee and the complicated deposit of money into your own account. Of course, you can deposit money, but not in a branch and not via a machine, rather you have to transfer it from some other account to your own.

Online banks are almost identical to direct banks but have one interesting difference. In the process of your identification when opening an account, direct banks use PostIdent – the documentation arrives at your address and with those papers and your passport you go to the post office where a postal employee confirms your identity. Online banks use video identification where you do everything via video call, show your passport, state your personal data, and similar. This is convenient because you do everything via mobile phone, from home.

Online banks are increasing their number of clients at great speed, while classic Filialbanken are rapidly closing branches. In terms of number of clients and power, they are not actually losing out, they simply understand that branches have become less and less in demand.

Differences in products, what to pay attention to

Before you decide, think about what you actually need. How do you handle money? Do you do everything online or do you sometimes need the counter or that machine in banks? How often do you withdraw money at the bank? Where? Do you pay by card here or abroad?

Almost all, and especially direct banks, offer promotions and bonuses that you get if you arrange an account. Many banks offer a cash bonus, free account maintenance, special cards, and services for new users. These are positive things that serve as bait for new clients. What you need to watch out for are everyday costs.

Can you withdraw money at an ATM? How many times? Is it free? Only in Germany or everywhere? Can you transfer money? Only online or in a branch? Is it free if a clerk transfers money for me? Can I pay by card abroad? How much does it cost?

These are more important things with which you very quickly pay back the bonus you got at the beginning, and the bank can give you all that information if you ask or look for it online.

With my card I can pay and withdraw money abroad completely free of charge, and besides that I also have some kind of insurance while I am outside Germany (if they steal my diamonds). Because of that, of course, I pay 10 euros per month for the card, which is ok (nothing is free). I like to be flexible and not have to think about it, and this kind of package suits me. What definitely would not suit me is having to pay for withdrawing money or making payments in Croatia or BiH, and that is exactly the thing with the “free” card that my bank offers.

What if the bank refuses to open an account for me?

It can happen that the bank refuses to open an account for you because of poor creditworthiness, most often if you have a history of not paying obligations, but maybe also because of an error in SCHUFA (I will also write about SCHUFA).

Check what the issue is, and check what information SCHUFA has and whether it is correct. If it is correct and they do not want to open an account for you, you have the option of opening a so-called Basiskonto. This is an account that every bank must offer, and with it you have limited options (generally you can deposit money and transfer it).

Terms you will need:

Kontonummer – your account number (8 digits)

Bankleitzahl – bank number (10 digits)

IBAN – international account number (country code + bank number + your account number)

BIC – international code of your bank

Gültigkeit – expiration date of your card. It is written on the card e.g. 12/22 (12th month of 2022.)

Prüfcode – a three-digit number located on the back of your card in the signature field. It serves for additional security in internet transactions. If your card does not have it, then the card is simply not intended for internet payments.

You can find all these numbers on your bank card or on the contract with the bank.

Source: derneusvabo.de