How to choose the best* bank account in Germany
Learn how to pick the right bank account for you by understanding what features to look out for and what to avoid.
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Whether you’re opening a German bank account for the first time or you’re looking to switch to something better, this page will guide you through all the important features to look out for so that you can find the best German bank account for you.
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How to choose the best bank account for you
Below is a list of things to keep in mind when choosing a German bank account. Make sure to consider your own personal needs, budget and situation when choosing an account. What is “best” will vary for everyone, but you can increase your chances of finding the account that’s best for you by keeping the following criteria in mind when making a decision.
When choosing a bank, the first thing that you should familiarise yourself with is the fees, especially for services that you expect to be using regularly (e.g. ATM withdrawals).
In Germany, many bank accounts are free, but there are also those that charge monthly account keeping fees. This usually means that you can expect to find a difference in the services offered by each. Free bank accounts typically have less products and services on offer, and might only charge you once a certain threshold is reached (e.g. after a certain number of ATM withdrawals per month). That being said, paid accounts also have limits, so it’s important to understand the limitations of each.
Before choosing any bank account, it’s a good idea to make a list of the features you expect to use and how often you will use them. Then compare this to what each bank offers and the fees they charge for it. This way you can judge whether the fees really are worth it or not.
ATM coverage & fees
Certain parts of Germany are surprisingly old-fashioned when it comes to electronic payments – Berlin especially – which means you might find yourself paying in cash more often than you would like. As such, it’s important to understand what fees your bank charges for ATM withdrawals, which can be as high as €4 if using an ATM outside your network.
Banks may offer fee structures such as unlimited free withdrawals if you use your bank’s own ATMs (but a fee charged for using other ATMs), a flat-rate fee at any ATM or free withdrawals at any ATM up to a certain limit. When getting cash out, you should also be wary of third-party ATMs which may charge inflated fees on any withdrawal, regardless of the bank.
Living in Europe, you will also want to keep an eye on what the ATM fees are when travelling abroad in the EU and elsewhere.
Do you need a bank with physical branches?
You might require a bank with physical branches if you:
- Want face-to-face service
- Need to make cash deposits
- Need to cash cheques
If this sounds like you, then you may want to go with one of the more established banks that have a strong presence in your city or town.
Consider where the nearest branch is, the availability of the bank’s ATMs and how its fees and services compare to others. If you live in a small town, you may also want to consider what other products the bank offers (e.g. lending or home loans) to avoid you having to travel for a second provider.
What card does the account come with?
These days, most banks in Germany will provide you with a debit card for a standard current account. These are usually Mastercards or Visas and can be used for withdrawing money, paying online or paying in-store, but can’t be used as a credit card.
While debit cards might seem the same regardless of which bank you choose, they actually vary in several ways that you may want to consider:
- International exchange rates
- Fees for foreign transactions and ATM use
- Unique benefits and perks
- Visa vs Mastercard
- ApplePay & Google Pay compatibility
- Ability to upgrade to a “Premium” debit card
Other things to keep in mind are whether the bank will allow you to have more than one card on the same account, how much it costs for a new card if yours is lost or stolen, and whether or not a credit card is available should you want to apply for one.
In addition to a current account which handles the basics like receiving money, spending it and saving it, you may also want other features from your bank, such as a credit card, a loan or a travel card.
Digital banks are known for their focus on modern services such as money transfers and international spending. They also tend to offer business, travel and joint accounts in addition to current accounts. Plus many include novel features such as free media subscriptions (think Netflix or Spotify), cheap money transfers, travel insurance and more.
Traditional banks are still the titans of the industry and so are usually the only place to go to get things like high interest savings accounts, mortgages, credit cards and loans. They also provide account managers to help you get organised if your banking becomes too complex to handle on your own.
Interest rates across Europe are currently quite unstable due to economic uncertainty, with the European Central Bank (ECB) even going so far as to charge negative rates on savings in 2020.
As such, banks in Germany are likely to change the interest rates they offer on various products over time (for both lending and borrowing). This means it is especially important to keep in mind whether any interest-carrying product is offered at a fixed rate (stays the same over time) or variable rate (changes over time). It’s also worth reading the fine print, in case the rate moves in accordance with ECB or federal bank interest rates.
Spending money overseas
If you plan on travelling, it’s worth keeping in mind what options your bank offers for overseas spending. Some banks simply let you use your regular bank card at the standard Mastercard or Visa conversion, whereas others might charge a certain percentage of the transaction on top, and others might offer a specialised travel card or exchange rates.
International money transfers
If you plan on frequently sending money overseas, then look out for what options your bank provides. This tends to be quite a competitive point between digital banks such as Revolut and Monese, who offer competitive rates and in-app features to make the process as easy as possible. Alternatively, you might want to consider using a separate provider for international transfers, such as TransferWise or XE.
Digital banks vs traditional banks
With the introduction of digital banks (also known as neobanks), customers can now expect more from their banking experience than just a place to deposit and withdraw money.
Digital banks and finance apps come with a range of innovative features, such as insights into spending habits, helpful ways to save money (like sub-accounts and rounding-up purchases), in-app customer service and multi-language support. Signing up is quick and easy, with most of the experience being handled in the app alongside a photo or video call to prove your identity.
As the name suggests, digital banks don’t have any physical branches for you to visit should you need face-to-face service, and they don’t offer as many financial products (e.g. loans and credit). Fortunately, the price reflects this, with most digital banks offering a free account tier. As such, digital banks are currently best suited to people who are happy with a lightweight banking experience.
Digital banks and finance apps can also be licenced differently. Some of these have bank licences, meaning they are able to accept deposits and your funds are protected up to €100,000. However, they can also be licenced as electronic money providers or payment institutions. This means they cannot accept deposits like a bank does. Your funds will also not be protected by the government guarantee.
What is the best German bank account for expats?
Everyone’s needs are different, however, expats typically require a banking experience that is quick, easy and doesn’t involve too much paperwork. Based on that assumption, a digital bank is probably best for an expat new to Germany.
This is because digital banks are app-based and almost always offer a free pricing tier. Plus, some digital banks, such as Berlin-based N26, will let you open an account with just a passport before you’ve even arrived in Germany – no Anmeldung required! They also tend to come with support for multiple languages, both in-app and customer-service side.
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