Factors to consider when choosing a Bank Account in Germany

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Current account (Girokonto) bank account in Germany

In Germany you would need a normal current account (Girokonto) for performing most of the financial activities such as receiving funds e.g. salary, paying bills such as house went, and withdrawing cash for everyday use. Here are some of the factors you must consider before selecting a bank account in Germany.

1. Monthly maintenance charges

Till recently most of the banks charged a monthly maintenance fee for your normal current account (Girokonto). Though this has changed in recent years, there are still some banks which will charge you the monthly maintenance fee for maintaining a bank account in Germany. This fee can be anywhere up to € 10 per month.

Therefore, one of the most important things you should consider before opening a current bank account in Germany is to check their terms and see if they charge any monthly or annual maintenance fee.

Some banks allows you to get away from paying the monthly maintenance fee provided you are able to deposit a minimum amount per month in form of your salary. The banks might require you to maintain a minimum balance in your account if you do not wish to pay the maintenance fee.

However, there are many banks which to provide maintenance free bank accounts to their customers. These include the Internet bank accounts such as those provided here.

2. Withdrawal charges

Once you get a current account or checking account (Girokonto) opened in a bank, you will be provided with an ATM card to allow you withdraw your money from the bank ATMs.  Banks even join together and form of pool among them to allow free withdrawal for their customers from any ATMs of any banks in the pool. Cash group and cash pool are two such alliance of banks which offers their current account (Girokonto) customers to withdraw money from any bank ATM which is part of the pool. Banks might charge the current account (Girokonto) customer up to 5 euros for withdrawing cash from other bank ATMs or ATMs from outside the pool. Most banks now provide the customer with an EC card which allows them to pay in most stores or restaurants instead of cash.

In recent years, certain banks have started providing their current account (Girokonto) customers with a credit card to allow them to withdraw money from any ATM in Germany for free of charge. Some banks have taken it further and provide free withdrawal of money from any ATM within the euro countries, and some even allow free withdrawal worldwide. However, the current account (Girokonto) customer must always check if there are any hidden fees or annual charges for obtaining such credit card.

3. Transfer charges

Foreigners living abroad may often need to transfer money from and an account in the home country. In Germany transferring funds to any EU country through SEPA is free of charge. However transferring money to a country outside EU might incur transaction charges. These transaction charges might be a flat rate of a percentage of the transferred fund. Most banks also charge for receiving funds from non-EU countries in addition to the currency conversion rates. Some banks have agreements with certain banks in foreign countries and allow a customer to transfer money between both the banks free of charge. For example, Bank of America has an agreement with Deutsche bank allows free transfer and withdrawal of funds from Bank of America.

4. Interest rates on deposits

Most banks provide very little to no interest on the money deposited under the current account (Girokonto). The average interest rate for a current account (Girokonto) base from somewhere between is 0% to 0.5% per annum. However some banks might provide the customer with an option to earn higher interest on the money by depositing it to a linked day money account.

5. Customer service

Foreigners often lament about the quality of customer service in Germany. Furthermore, foreigners are in the added disadvantage due to the lack of knowledge of the local language. Therefore, it is important to check if the bank you are opening your current account (Girokonto) is well-known for its customer support or the lack of it. Various surveys provide the customers with information about the customer service in the German banks.

It is also advantageous to know if a local employee of the bank branch where you intend to opening your current account (Girokonto) is able to speak English. Certain banks also have customer service counter to provide service to the English-speaking customers while opening a bank account. Having said that, foreign customer must most likely resign to the fact that most if not all of the phone customer service will be in German. Check out a list of English service banks in Germany.

6. Internet banking

All banks now provide Internet banking facilities for the customer. Some banks provide a lot of features with the Internet banking facility to allow the customer do most of the work through Internet banking. Some banks are exclusively Internet banks and do not have a physical branch. Certain bank such as Commerzbank, Targobank also provides Internet banking facility in English. Check out the list of German banks providing English internet banking website. However, German language website of Internet banking is not so hard and can be understood by a non-German speaker by knowing a few important banking terms.


Checklist for choosing a current account (Girokonto) in Germany

1.     Maintenance fee

  • Check if the bank charges a monthly maintenance fee.
  • If the banking account, check if the bank has any conditions on monthly deposit or maintaining a minimum balance maintaining a monthly balance.

2.     Withdrawal and transfer fees

  • Check what card is provided by the bank to allow the account holder to withdraw the money. Is it a simple ATM card or EC/Maestro card or credit card?
  • Check if the bank is part of any cash pool or Cash group
  • If the bank provides with a credit card, check if the credit card comes with annual fees.
  • Check the transfer fees transferring money to and from your home country.
  • Check if the German bank has a special agreement with bank in your country.

3.     Interest rates

  • Check what the interest rate for a normal account is
  • Check if the bank provides additional facility to link the account with a higher interest earning instrument.

4.     Customer service

  • Check if the branch you’re opening in has the English-speaking employee.
  • Check for customer ratings of the particular bank from a reputed survey.

5.     Internet banking facility

  • Check if the bank provides Internet banking facility and any added features in the Internet banking facility