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You cannot do anything in Germany without a bank account. If you do not have an account, you will not be able to pay rent and your employer will not be able to pay your salary. With this in mind, it is one of the first things that you should do when starting your new life in Germany:Go to your local bank and open an account.

You can choose between three different types of bank: large, private commercial banks, savings banks and cooperative banks. Cooperative banks are the smallest of the three. The large, private commercial banks have extended their offers for private customers in recent years in an effort to entice them away from savings banks, which are traditionally seen as more user friendly.

The first thing you need to open an account in Germany is money. However, that is just one of the requirements. You also need your passport or another official identification document. You may also be required to present proof of residence from the registration office and your residence permit.


Current account

The most popular and easy to use account is the current account, which enables you to arrange all of your incoming and outgoing payments at your discretion. Banks will grant you an overdraft facility based on your income. This can be as much as several thousand Euro. Most banks charge a monthly fee for providing a current account and this is usually deducted once every quarter.


Savings account

Savings accounts are used extensively in Germany. The most popular form is the savings account with agreed notice, which allows you to withdraw a predetermined amount each month. You have to give three months’ notice if you intend to withdraw more money than initially agreed upon. If you withdraw more than the agreed sum you will not be entitled to as much interest on the amount.


Accounts with higher interest rates

There are a number of ways to benefit from increased interest rates on your savings, particularly if you do not require access to your money at short notice. One such method is the fixed-term deposit account. You deposit money into this account for a given period, which can range from one month to five years. The longer the money remains in the account, the more interest it will amass. Another option is an instant access savings account. Money deposited in this account will earn interest according to current interest rates on the financial market. You can normally access this type of account on a daily basis. However, interest fluctuates according to financial markets, so there is no guarantee that you will receive a fixed rate over a set period of time.


Direct banks

Direct banks are a welcome development in the German banking sector and are very user friendly. Discount brokers have attracted customers with high interest rates on savings and current accounts. However, these higher interest rates come at a price. Direct banks save money by having less staff and fewer branches. This means that they are unable to provide the same service as conventional banks. As a result, direct banks are more attractive to customers who carry out their banking online. If you opt for a direct bank, you should make sure that the bank has cash machines close to your home or place of work. Certain direct banks only have a few cash machines available for their customers and fees for withdrawing money from other banks’ cash machines (sometimes more than €5 per withdrawal) can soon add up to more than the cost of having an account with a conventional bank. Some banks have come to an agreement regarding use of their cash machines (Targobank, Santander, SEB and Sparda-Bank are all members of the www.cash-pool.de system, while Deutsche Bank, Commerzbank, UniCredit Bank AG and Postbank are all members of www.cashgroup.de), which means that customers of these banks always have access to free cash withdrawals from the cash machines of the other banks.


Online banking

Online banking is very popular in Germany. There are numerous advantages to this system: All transactions can be carried out from your own computer and transaction costs are generally lower. The most simple and cost-effective way to conduct online banking is to log in via the bank’s website. Banks usually provide customers with a list of transaction numbers or TANs. These numbers allow users to carry out banking operations online. It should be noted that TANs can only be used once. You should also be aware that not all banks provide TANs in list form. Certain banks have introduced a system based on text messages while others require you to purchase an ATM-card sized ‘TAN generator’.


Transfers, cheques and statements

If you have opened a current account, you will receive transfer forms. Most transfers in Germany are carried out by means of direct transfer from one account to another. Cheques are rarely used in Germany. Transfer forms usually come with a carbon copy page. Everything that is written on the first page is transferred onto the page below. In order to make a transfer, simply enter the name of the recipient, their account number and the bank sort code. The transfer form should then be signed in order validate it. You then tear off the copy (which also includes the name of the person making the transfer), give the transfer to your bank (either in person or by post) and they will make the transfer. Many companies make this task easier for you by attaching their own transfer forms to your bills. If this is the case, you are only required to fill in the name of your bank, the sort code and your account number before passing it on to your bank. For international payments within the EU, you should to include the recipient’s IBAN/BIC code in order to avoid unnecessary charges.

Regular payments

The most convenient way of settling regular payments is to set up a long-term standing order. Regular payments may include electricity bills, insurance payments, rent, telephone bills, tax payments, membership fees, magazine subscriptions etc.). There are two different ways of doing this: direct debit authorisation, which gives the recipient the right to regularly debit your account; or a standing order, where a fixed sum of money is transferred to the recipient on dates agreed in advance.


Maestro card

Shortly after opening your current account, your bank will send you a bank card, a chequebook and transfer forms. The bank card was previously known as an EC card but the name has now changed to Maestro card. It comes with a PIN number, which you cannot select yourself. The card can be used to carry out electronic transfers and withdraw money from cash machines in Germany and the rest of Europe. You can pay using a Maestro card anywhere that displays the Maestro symbol. Many shops and offices, which do not display the symbol, also accept Maestro cards as a payment method.

Due to the fact that it costs so little for retailers to use, the Maestro card is accepted almost anywhere in Europe and is significantly more popular than the credit card. Payments made using a Maestro card result in a direct debit being taken from your current account. This may take a few days to be processed. If you overdraw your current account, the preset interest rates for the overdraft facility at your bank will be automatically charged to your account. There are no charges for paying with a Maestro card outside of Germany, as long as you are still within the Euro zone.


Credit cards

Credit cards are still not as widely used in Germany as they are in many other countries. One reason is because retailers prefer the Maestro card as it incurs lower charges. There are also many cultural reservations about making purchases on credit. Nevertheless, credit cardproviders are attempting to alter this attitude and you will see that credit cards are becoming more common in large department stores and on shopping streets. Banks also provide credit cards for current account holders. These are usually either Visa or MasterCards. Card holders will not usually be required to pay any charges in the first year. However, you can expect subsequent costs of around €30 per year for a simple credit card.