Banks and Banking in Germany

Banking in Germany isn’t all that different from back home — but there are a few twists.

Expatriates staying in Germany for an extended period will probably need a German bank connection. Setting up an account is a fairly straightforward operation, much the same as at home. All you need are your passport and money for the initial deposit. You may also be asked to show proof of a German address.

If you bring cash, your account is opened immediately. If you are transferring funds from your home bank, it may take some time for the amount to be credited to your account.

The most common account is called a Giro account. It is similar to a checking account or current account. Various banks offer various services for differing fees with a Giro account. Students may apply for an exemption from bank fees Savings accounts that normally offer a better interest rate are also available.

The EC Card

Once you have opened an account the bank will issue you a card commonly referred to as an “EC-Karte”, which is very valuable for transactions. You can use it to get cash around the clock from the automatic teller machines (Geldautomat), and it is commonly accepted for payments at supermarkets, gas stations, ticket offices, department stores and other retail outlets. Payment is made with either a signature or with the four-digit PIN number assigned to your card. In addition to the magnetic strip on the back of the card an EC Card may have a “chip” on the front. This “chip” can be loaded with up to €200 of cash to be used like a cash card. It can be used to pay small sums in parking garages and at certain stores and other outlets.

The card can also be used to get account statements from terminals in most banks as well as to execute some basic transactions in special terminals in many banks.


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Credit Cards

Credit cards are becoming more and more accepted in Germany. There are many International Geldautomat that will accept them for cash advances, and they are accepted at boutiques, department stores, hotels, airports and many restaurants. They can be used at Telekom shops and other telephone stores to purchase equipment. They are also accepted by the Bahn for the purchase of train tickets. Be sure to check to see if credit cards are accepted in shops or restaurants.

Online Banking

German banks are into online banking. With most of them now you can check your balance or order a fund transfer from your computer. PIN numbers are issued for home banking and automatic teller machines. TAN numbers used in making online transfers are now sent to an account holder via a mobile phone SMS or are generated by a device used to scan a bar code on your computer.

Automatic Teller Machines (Geldautomat)

Geldautomat are found in just about every bank as well as in other locations - stores, train stations, shopping centers, malls and on various streets and commercial pedestrian zones. Their locations are normally easily recognizable by a large EC sign.

The Geldautomat are interconnected and you can get cash from just about any one you find in Germany and its neighboring countries. And the use of them in many, but not all, cases, could be free if you go to a bank of the same name and/or type as your own. Withdrawing money from a Geldautomat of a different bank than your own may cost extra. Sometimes the extra charges are a percentage of the amount withdrawn and sometimes a flat fee is charged. The costs can range from €1.00 to €10.00. The affiliated bank is normally shown on the machine itself or even on the screen.

In addition to getting cash from a Geldautomat you can also “charge” the embedded chip on your EC Card as well as put credits on to a prepaid mobile phone.

Types of Banks

There are four different types of banks in Germany: public sector commercial banks (Private Geschäftsbanken), savings banks (Sparkassen), credit cooperatives (Kreditgenossenschaften) and the Postbank. The distinctions between these are of little interest to most depositors. The rules for a standard checking account (Girokonto) are generally identical.

Making Payments

There are several ways of making payments in Germany.

Transfer (Überweisung) is used to transfer money from one account to another. You fill in a paper transfer form (Überweisungsformular) and hand it in or complete the form online and use a TAN number to complete the transaction.

Standing order (Dauerauftrag) is used if you have regularly recurring payments of a set sum, such as rent, insurance premiums, television fees and the like This sum is deducted automatically from your account on an agreed date and transferred to the account of the recipient. The necessary forms can be filled out online or at the bank.

Direct debit (Lastschrift): This is a practical method if you have recurring payments that vary in size, such as the telephone, gas and electric bills. You give the recipient a direct debit authorization (Einzugsermächtigung) that authorizes it to deduct the respective amounts from your account. Of course, you can always cancel the authorization and stop the direct debit. As a safeguard against abuse you also have the unrestricted right for 90 days to recall any sum that was deducted in this manner. You can recall it even if it was proper, though this would give it the status of an unpaid bill.

Other Bank Services

You can establish a line of credit (Dispositionskredit) at a German bank, usually two or three times your monthly pay. Once you have done this you may overdraw your account to the agreed amount, but be warned that these overdrafts may cost you some heavy interest, sometimes ranging from 11% to 18% per annum.

German banks are universal. In contrast to Anglo-American banks, they offer the consumer a very wide range of financial services beyond deposit taking and lending. At just about any of them you can exchange currencies, purchase stocks, bonds, insurance, travelers checks and precious metals, take advantage of portfolio and asset management, take out a mortgage, buy real estate and make electronic transfers around the globe.

Several large German banks operate “International Desks,” designed to cater to all the banking needs of English-speaking and other expatriates in Germany. They are a good source for information on the services and goods that are offered.

As a rule German banks are open weekdays from 8:30 a.m. to 4 p.m. and on Thursdays to 5:30 p.m. or 6:30 p.m. Some smaller branches shut at lunchtime. Most allow access to the Geldautomat and the statement printers in their foyer around the clock.