Picking the right German bank account for your needs

There used to be a time where opening a German bank account was a difficult task for non-German speakers. Choice was scarce, prices were not transparent, and you were often not greeted so well at the counter.

Those days are long-gone: innovative neo-banks have taken the market by storm with slicks apps, cheap plans & English service. In only a few years, the amount of choice quickly became overwhelming to newcomers in Germany. It’s also one of the first decision to take when moving here, which makes it all a bit…paralyzing.

For those reasons, this post looks at the different options available to newcomers in Germany. It has one goal: finding the best bank account in Germany for your needs. This post is based on real-life experience and thorough reviews of the different banks presented here.

Best bank accounts in Germany overview

If you were to squeeze the juice out of this long post, it would take form of this short list. It contains a summary of your best options with access to more details underneath.

All the options listed here offers service in English, with no ATM fees, no monthly fees (unless stated otherwise), free payment cards & a fully digital sign-up process:

• N26 is still the best first account for most newcomers to Germany. It leads the pack in terms of value & ease of use. 2 reasons to pass on it: customer support is sometimes bad & not every citizenship is eligible. More details here.
  
• Tomorrow is a great eco-conscious option with legitimate credentials. Think of it as the green N26: same basic features, flexibility & low fees, but your money is going towards climate-friendly projects. Reason to pass on it: not as many features as the competition. More details here.
  
• Deutsche Bank is the best brick-and-mortar option. Yes, it comes with fees (from 6,90€/month) but it’s the only traditional bank that also has service in English and lets you open an account from abroad. More details here.
  
• Kontist is probably the best option for freelancers. It strikes a great blend of banking & bookkeeping features, saving you tons of time. Tax advisors are available on demand too. Reason to pass on it: the free plan lacks too many features. More details here.
  
• Cheat option: DKB is probably the best bank account in Germany, period. A lot of features, low fees & the only true free credit card on the market. The only drawbacks? No English support & the app is showing its age. More details here.

The best German bank account for most people

N26 still earns the #1 spot for most newcomers Germany. Even after the initial hype and some hiccups along the way, it manages to deliver a smooth banking experience at a very competitive price. Yes, customer support is sometimes lacking, but the value delivered still holds up.

I’ve been using N26 for several years now and it has always served me well in Germany or abroad. I’ve personally been very satisfied with their services so far. It comes often up on Facebook groups & forums when people ask for recommendations. You can read my experience in this full N26 review here.

The benefits are still known:

1. Super low fees:
   • Free standard account.
   • Free Mastercard.
   • Free use of ATMs worldwide.
   • Low fees on international transfers thanks to Wise.
2. Ease of use
   • Open an account within minutes via the app.
   • Interface & customer support available in English, French, Italian & Spanish.
   • No need to have a registered address in Germany/Anmeldung (in most cases).
   • Easy to close the account.
   • Receive your cards within 2-3 days

Reasons why N26 might not be for you

• Your passport/ID card is not supported for identity verification. N26 uses a service provider to verify your identity and your passport/ID card. Sometimes they don’t work well with some countries. This may de-facto restrict your chances to open an account with them. For examples, the following countries’s passports are not supported: Ivory Coast, Algeria, Morocco, Monaco, Nigeria, Russia, Uruguay. Full-list here.
• You really need access to a hotline. When something bad happens, one usually needs a fast reaction time. This unfortunately not well done by N26’s chat. And there is no phone chat available, unless you are on a paid plan.

The brick-and-mortar alternative

If you are after physical branches with real people behind the counter, you can look in the direction of the traditional players on the market. You may have seen them before: Sparkasse, Volksbank, Deutsche Bank, Commerzbank & Postbank.

All in all, those banks more or less offer the same services within a similar price range. They all costs a bit more than the digital players, but you do get some more value & flexibility out of it, once you are in Germany.

Out of this bunch, Deutsche Bank is probably the best fit for newcomers:

• Online banking, documents & customer support available in English
• For students, it provides a blocked account for visa applications
• The bank has agencies everywhere in Germany, even in the smallest cities.
• You can open an account without an Anmeldung/address in Germany.

The eco-conscious alternative

More and more options on the market offer to put your money to work for the planet. These sort of features are young and should perhaps prove their actual impact over time, but it’s an exciting premise. DKB does offer some level of “green banking” but Tomorrow Bank is clearly the “bank-with-a-mission“on that front. It’s a B-Corp company after all.

The banking experience matches the leaders on the market but payment with the card is funding climate-related projects around the world. You can read exactly how they do that in this Tomorrow Bank review.

Benefits:

• Sign-up is quick & painless via the app for most nationalities.
• Each payment with the card funds projects contributing to climate protection.
• Service & customer support available in German or English.
• Free standard account comes with free ATM withdrawals in Germany or in the Eurozone

Reasons you might want to pass on Tomorrow Bank

• Even if the experience matches the competitors, the amount of features still relatively low.

The best bank account in Germany, if German is not an issue

If German is not a problem for you, you should definitely consider DKB. It offers the same advantages as N26 and the same easy process to open the account online and even surpasses it by providing a true free credit card as well. It also puts your money to good use in sustainable projects. However, they do not not support English as a communication language and it can be tricky for newcomers to open an account.

You can read a full-length review of DKB’s Cash account here.

DKB has been rated consistently as one of the top online banks in Germany for many years. If German is not an issue, it is a strong option to open a German bank account online. It could also be your next bank, after you have mastered the language a little bit.

German bank account for freelancers

If you are currently self-employed and you are looking for a separate bank account to manage all your business related expenses and income, you might be surprised by how costly it is to manage and extra bank account for this. Some banks make you pay a premium or will bill you depending on the movements on the said account.

Some banks are also simply refusing to open another account for you because your income is too low, or if your SCHUFA score doesn’t fit.

However know this: as a freelancer in Germany, you are not legally obligated to hold a separate bank account for your business-related transactions. You can use your private one. However, it still might be a good idea to keep your precious savings safe.

Kontist might be the best bank for freelancers in Germany for those reasons:

• Features of the account blend banking & book keeping perfectly, which might save you the costs of another app.
• It also offers tax advisors on demand if you have questions.
• It saves the taxes you owe to the Finanzamt in a separate subaccount.
• Service & customer support is available 100% in English
• Opening an account takes only a few minutes via the app. No SCHUFA required.

Reasons why you might want to pass on Kontist:

• Free plan lacks too many features, 9€/month plan is much better.
• Kontist shows its youth: some banking features are lacking.

Full review of Kontist available here, where I highlight all benefits & drawbacks, as well as real customer reviews.

Options we can’t recommend

• Revolut: It’s a great service in it-self, particularly relevant for frequent travelers & digital nomads. However, we cannot recommend it because it doesn’t provide you with a German IBAN number. This is a problem because you will need that to pay most of your bills or even receive your salary in some cases. Foreign IBAN numbers are often not supported here.
• Sparkasse, Commerzbank & Volksbank: Those brick-and-mortar options don’t support English very well and/or they have a lot of small fees attached.
• Comdirect, ING & 1882direkt: All these options are competitive online services, almost on par with DKB, but they simply cost more.

Banking options in Germany for non-residents

If you need a banking service WITH a German IBAN before you arrive in Germany, you can turn to banks that don’t require a proof of city registration (Anmeldung/Meldebescheinigung). Those banks are N26, Bunq or Tomorrow. However keep in mind that you do need to be able to verify your identity in-app AND that you need to have a German address to receive your documents cards.

If you are mostly worried about fees and don’t care too much about having a German IBAN, you could simply use Wise’s banking option, which will suit most newcomers in the beginning. It’s a great low-fee multi-currency account.

How to open a bank account in Germany

When you have picked the best option for your needs, this is how it usually happens:

1. Provide your ID document (passport or ID card) for identity verification via app or via PostIdent.
2. Optionally, provide your residence certificate (Meldebescheinigung) and your residence permit too.
3. Close the contract online to effectively open your account.
4. Receive documents & cards at home within a few days.
5. Activate your cards to start using them. You might also need to transfer funds onto your new account to activate payment functionality.

This process might look a bit different if you are choosing a brick-and-mortar option or if you are opening a bank account from abroad. In this case, you might have to visit a branch or have your identity verified by a notary for example.

How to transfer money to your new account

We all have been there; we sometimes need to pay something big like a deposit on a flat or your simply need to prove you have the means to stay in Germany to obtain your visa. Since there isn’t much money yet on the new German bank account, you might want to transfer some of your savings there to pay for those things. Depending on your bank at home, they might charge you up to 5% of the said amount to make that transfer from another currency. So e.g, on a $3000 transfer, you might pay up to $150 just to move money around!

If that’s true for you, you might want to use services like Wise (formerly Transferwise) which thanks to its unique system, allows you to transfer money in other currencies with a very reduced fee. It has no hidden fees like most of banks have!

For a more information, you can also check this detailed guide on finding the right way to transfer money to Germany.

Banking in Germany – General knowledge

About ATM fees

In Germany

Traditional banks in Germany are not really playing fair between them and won’t let customers from others banks withdraw cash without a fee. This fee can be anywhere between 3€ to 5€. That would not be a problem for all digital banks like N26. Sparkasse is usually considered to have the best network of ATMs that are well distributed through out Germany’s cities.

Deutsche Bank, Postbank & Commerzbank are organized into what is called the “cash group“. Any customer of a cash group bank with a German bank account can withdraw money at any ATM within the group for free.

Opening a bank account a Germany will also let you use smaller “independent” ATMs outside of bank branches. These are placed where banks are not good at placing cash points. Fees can reach 8€ euros however, so beware. Owning a credit card can solve that trouble for you, especially if you go with online banks, which have agreements to waive the fee.

A lesser know cash point solution too: supermarkets. Some supermarkets like Penny or Rewe will also let you withdraw money for free on top of your normal groceries’ bill. N26 also uses this to let its customers withdraw money for free, as many times as they want.

Abroad

German banks are usually reasonable on fees when withdrawing money abroad but they might charge a high conversion rate to compensate. Staying in the E.U zone also limits fees. Banks like DKB or N26 don’t charge anything at all when using credit cards at cash points.

Common banking fees across German banks

Comparing banking fees are a good way to make a decision beyond the simple flagship offer they might display everywhere. Banking fees are usually called “Kontoführungsgebühren” (Account management fee) and look like this for most banks:

• Grundpreis – basic fee: Monthly fee for having a bank account in the first place. Yes, this still exists in a fully automated 21st century bank.
• Dispokredit – Overdraft: that’s when you withdraw more money than you have, up to certain contractual limit. It’s usually costing 7% to 11%.
• Uberziehung – also overdraft but not limited by any conditions.
  Here is a quick table to for a quick overview.
• Bareinzahlung – cash deposit: that’s when you want to deposit cash into your account.
• Kontoauszüge: German banks are legally required to send you a monthly account statement, giving you an overview of movements on the account. Also it’s mostly free if you decide to receive in a digital format, most banks will bill you the luxury of receiving by post.

Other kinds of bank accounts in Germany & key terms :

Although this post is about the standard Girokonto, which most people need when they first arrive in Germany, there are of course other types of account. Here is a quick overview with other key terms:

• Girokonto: this is the everyday German current bank account.
• Sparbuchkonto : Savings accounts. This is money you lock away for a long time in exchange for interesting rates.
• Sperrkonto : Blocked account for Germany. Typically used to allow foreigners to acquire visas, mostly for students visa. This is to prove they have sufficient means to stay in Germany. Follow the link for a detailed overview and comparison of providers as well.
• Mietkautionskonto – Mietkaution Sparkonto: Deposit for your apartment. In case you can’t give your landlord the full amount, the bank provides deposit money that you repay with an interest. It can be relevant for international students.
• Disposition Kredit (DispoKredit) : The overdraft limit you are allowed. As with any banks, this comes at a cost, generally depending on your monthly earnings.
• Zinsen : Interest rates
• Überweisung : Money transfer
• Bargeld : cash

Opening your German bank account : your choice will make a difference

Sooner or later, you need to pay your rent and put your wage money somewhere (Ka-ching!), so you have to make a choice. What you need is a “Girokonto”, a current/checking account where your expenses and earnings go into. That’s the standard account.

However, opening a bank account in Germany with one of the traditional big banks usually requires to go in an agency and talk to a reluctant employee because they don’t want to/are not allowed to speak English. It is stressful and sometimes, you just don’t have time when you need to figure out accommodation or a job at the same time.

Bank account Germany – FAQ

I hope this overview helped you find the best digital bank account in Germany for your needs. Don’t hesitate to leave your questions, comments or suggestions in the comment! 🙂

Bastien

Sources: 1, 2, 3, 4, 5