The German banking landscape is a cornerstone of its economy, known for its stability and variety of options. Whether you are an international student spending time abroad, an expat settling in, a resident looking for tailored services, or a business exploring the financial market, understanding how banks in Germany operate is essential for effective money management.
The German banking system is highly regulated and diverse, so understanding it can be challenging. I want to support you in demystifying the German banking system with this guide. I will explain the types of banks in Germany, from public savings banks like Sparkassen to private and cooperative banks. You will also learn about their key services, including current accounts, credit cards, and mobile banking options, helping you understand your needs.
Whether you seek to open your first account, want to transfer money internationally, look for expat-friendly banks, or are just curious, with this guide, I will equip you with the knowledge to navigate German banks confidently.
Overview of the German Banking System
Germany’s banking system is complex. If you are new to Germany or just trying to understand how things work, I want to help simplify it. Here is my overview of the key aspects that will help you confidently navigate banking.
Types of Banks in Germany
One of the first things you notice is that there is not just one type of bank. Germany’s banking system consists of three main categories:
- Savings banks: The public banks are called Sparkassen and run locally to serve the needs of people in their communities. They are traditionally the leading institutes for private retail banking.
- Cooperative banks: These include Volksbanken and Raiffeisenbanken. They are community-focused banks since their members own them and aim to support local financial needs.
- Private banks: Well-known names like Deutsche Bank and Commerzbank fall into this category. Many offer a wider range of services, from private retail solutions to international business and investment banking.
- Online banks: Digital banks and fintechs are rapidly transforming how banking works in Germany. They operate primarily through apps and websites offering low-fee or fee-free accounts, quick account setup, and user-friendly interfaces.
List of Largest Banks in Germany
Before, presenting the popular banks, I would like to give you an overview of the largest banks in Germany. There are different criteria for defining for this:
Total assets is the most common criterion to define the size of a financial institution. In these terms Deutsche Bank Deutsche Bank, DZ Bank, and KfW lead the ranking. However, a lot of these institutions do not serve consumers: JP Morgan is an investment Bank, KfW is the German development bank, and other institutes serves as head entities for local savings and cooperative banks.
Largest Banks in Germany 2023 (Total Assets)
Rank
Bank
Total Assets (billion Euros)
1
Deutsche Bank
1,312
2
DZ Bank
645
3
KfW
561
4
Commerzbank
517
5
JPMorgan
421
6
LBBW
333
7
HypoVereinsbank
283
8
BayernLB
273
9
Helaba
202
10
ING
195
Source: Statista
Another metric is the market share for current accounts. The vast majority of German citizens have an account with Sparkasse Group or Volksbank-Raiffeisenbank Group. However, research also shows that younger people and expats prefer other institutes that offer multilingual support or do not force you to change bank accounts when you move to another city in Germany.
There are many other independent (online) banks that enjoy high customer satisfaction and offer some of the best current accounts on the market. This category includes VR Perfekt, 1822direkt, Volkswagen Bank, Vivid Money, Kontist, FYRST, Finom and much more.
What are the Best Banks in Germany?
Customer Satisfaction
In 2023, the banks with the best customer ratings were awarded in a study accompanied by German TV channel n-tv (find the full ranking and all categories here):
- Best online banks: (1) ING, (2) Consorsbank, (3) 1822direkt, (4) DKB, (5) norisbank, (6) comdirect
- Best nationwide retail banks: (1) BBBank, (2) Targobank, (3) HypoVereinsbank, (4) Deutsche Bank, (5) Commerzbank, (6) Postbank
Personal Preferences and Expat-Friendliness
Personal preferences and requirements are the most important decision factor for choosing a German bank account. In the end it comes up to your lifestyle. If you prefer English-language customer service and no fees while travelling abroad, you might opt for a digital bank. In case you require a loan or a German credit card the decision might be different.
Navigating banking as a foreigner in Germany is easier with institutions catering to international residents. Besides speakting English. foreigner-friendly banks also facilitate straightforward account opening processes, minimizing documentation challenges such as a proof of residence in Germany. Some banks even often refuse passports from certain countries. Furthermore, you may want to choose a bank that understands your unique requirements such as international transaction solutions.
Luckily, the offer and competition in the German banking market are quite large. You can easily take advantage and choose one of the free accounts with our comparison tool.
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Use our interactive comparison tool to find the perfect free bank account for your stay in Germany
Presenting Popular German Banks
If you are like me, having a list of trusted names can help you feel more confident when picking a bank. I would like to give you an overview of the largest banks in Germany. In general, one can differentiate between retail and online banks. Traditional retail banks offer personal service and a dense network of branches but (except of some) they charge monthly fees. Online banks miss their own branches but usually offer free accounts with the best performance-ratio. All banks nowadays have extensive phone/ online service that is accessible from around the world.
Popular Retail Banks
Below are the key traditional retail banks in Germany’s banking scene. They have shaped the German market for decades and are known for their reliability, stability, and wide range of financial services. With the upcoming of online banking, classic traditional retail banks have moved to a more hybrid model in past years. They have combined their traditional banking experience with advanced digital services and free account options.
Popular Online Banks
German online banks have been booming in recent years. With the freedom to manage finances from anywhere, native online banks provide seamless mobile experiences. They have brought lower fees, easy-to-use applications, tech-savvy banking and a new range of financial products. The following digital banks have redefined Germany’s the financial landscape, offering user-friendly interfaces and advanced security measures:
Bank Fees in Germany
Fees are a standard part of any bank. In my experience, keeping an eye on these fees can save you a lot over time. Here’s what you can expect:
- Maintenance Fees: Many banks charge a monthly fee for their bank accounts, credit cards, or brokerage accounts unless you meet specific requirements, like having a minimum income or performing a certain amount of transactions.
- ATM Withdrawal Fees: Using an ATM outside your bank’s network can cost you extra, so it’s something to watch for.
- Transaction Fees: International transfers, card usage, or specialized services often incur additional costs.
The Role of Regulators
I have always appreciated the level of security in Germany’s banking system. Thanks to its robust regulations and oversight from key institutions, the country is one of the most secure financial places worldwide. It is one of only 11 nations globally with a AAA credit rating.
- BaFin (Federal Financial Supervisory Authority): This watchdog ensures banks operate fairly and transparently, focusing on protecting consumers and maintaining the integrity of the financial system.
- Bundesbank (German Central Bank): The Bundesbank oversees monetary policy within Germany and plays a pivotal role in ensuring financial stability.
- European Central Bank (ECB): As part of the Eurozone, Germany’s banking system is also influenced by the ECB, which regulates significant banks across member states and sets monetary policies for the Euro.
- SCHUFA and Credit Scoring: SCHUFA is Germany’s credit bureau, which is central to assessing financial reliability. Banks check your SCHUFA score to evaluate your creditworthiness, which affects account approvals, credit card eligibility, and loan applications. Maintaining a positive SCHUFA record is essential for accessing a wide range of financial services in Germany.
Current Trends in the German Banking Industry
Some ongoing trends have been reshaping how banking operates in Germany for good. They do not only come with changes and challenges but also bring new opportunities for expats and residents alike.
- Digitalization: Germany’s banking sector rapidly adopts digital tools, with online banks, mobile apps, and AI-powered solutions leading the way.
- Challenges for Traditional Banks: In the wave of digitalization, legacy institutions face competition from upcoming fintechs and are adapting through cost-cutting and digital transformation.
- European Market Consolidation: The EU drives cross-border mergers and regulatory harmonization to create a more unified financial market. It also allows banks in other European countries to offer their services in Germany.
- ESG and Sustainability: Banks prioritize green finance and ethical investments to align with environmental and social goals.
Banking in Germany for Expats
As an international expat in Germany, navigating the banking system can be incredibly challenging, from understanding how the system works to finding a bank that caters to foreign residents. In this section, I walk you through the essentials you must consider when you are an expat in Germany.
Why You Need Banking Services in Germany as an Expat
If you plan to stay in Germany for a longer period of time, you will need a German bank account for seamless financial transactions – no matter whether you’re a student, professional, or expatriate. A local account provides access to essential services like:
- Salary deposits from your employer
- Bill payments / standing orders, e.g. for electricity or mobile phone plans
- Tax payments or refunds from authorities
- Money transfers (called SEPA), e.g. for rent
- Cash withdrawals at ATMs
- Card payments at stores and online
Thanks to the liberated financial European market and Single Euro Payments Area (SEPA), an account from another European country that does not charge fees (e.g. for withdrawals, payments or international transfers) might also serve your needs. Some pan-European providers like N26 or Wise have even focused on the niche of European citizens. In return, this also means that a lot of German bank accounts are also well-equipped for living and travelling abroad.
How to Choose the Right Bank for Expats
As an expat in Germany, finding a bank that meets your unique needs comes in handy for managing your daily finances smoothly. Factors like English-speaking customer support, transparent fee structures, and access to digital banking services can make a big difference. I composed for you the following guiding questions as key factors to finding a proper bank:
Does the bank allow free ATM cash withdrawals?
Do you require to deposit cash?
Do you require a Girocard for cashless payment everywhere?
Does the account include a Visa or MasterCard Debit and Credit?
Do you appreciate personalized service at a branch?
Do you want multi-language support , especially in English?
Do you already have a German residence?
What are the account fees?
Is the account for private purposes only or do you need it for business?
Do you want to manage other services with the same bank?
How to Open an Account?
The processes for opening a bank account or getting a credit card in Germany are always quite similar and it is usually done online. For retail banks you can also open the account directly in the branch. Nevertheless, from our own experience, you may get worse conditions if you do not fill out the online form before. For example, once myself I ended up paying extra for a credit card and received a lower sign-up bonus just because I did everything at the branch. Usually, the entire process of online application and identification only takes about 10-15 minutes.
Steps to Open a Bank Account in Germany
Required Documentation to Open an Account
With the proper documents, opening a bank account in Germany is straightforward. Here is what you typically need:
- Identification (ID or Passport): A valid passport or national ID card is essential for verifying your identity.
- Proof of Residence (Meldebescheinigung): After registering your address with the local authorities, you’ll receive this document, which most banks require to confirm your residency in Germany.
- SCHUFA Credit Report: This document is vital for accounts involving credit services. SCHUFA is Germany’s credit bureau, and a clean credit history often smooths the process.
Some banks, particularly online banks or those catering to expats, may have more lenient requirements, such as offering accounts without SCHUFA checks or allowing remote applications without proof of residence. Always check the specific bank’s policies beforehand to ensure you meet their criteria.
Changing or Opening Another Bank Account
Of course you can open several accounts. It may especially make sense if you want to have a separate shared account with your partner or for business expenditures. If you are unhappy with your choice, some banks even offer automated services to move your direct debits/ standing orders. Therefore, you should first open a new account before closing the old one.
Key Financial Services in Germany
Current Accounts for Private and Business Use
Managing finances as an expat in Germany starts with the right current account. Germany offers a variety of options for private and business needs, including traditional and digital banks. Choosing the best account depends on your priorities, such as low fees, accessibility, or specific business features. Use our overview on all free bank accounts in Germany here, to find your best option.
Credit Cards in Germany
Credit cards are less common in Germany than in some other countries, but they offer valuable perks like cashback, travel rewards, and installment payments. Understanding fees, limits, and eligibility criteria will help you find the right card for your lifestyle or travel needs. Check our Ultimate Guide on Credit Cards in Germany for details or find your perfect option in our Best Credit Cards in Germany article.
Investment and Savings Products
Whether you save for the future or look to grow wealth through investments, Germany’s banks give access to all savings and investment options. From high-yield savings accounts to advanced financial instruments, you can choose your favorite, considering returns, fees, and taxation, such as capital gains tax. Thanks to a national deposit guarantee, your funds of up to €100,000 on any German savings account are secured at any German bank in case it goes bust. Compare the best savings accounts in Germany here with our overview.
German Blocked Accounts for Student, Education and Chancenkarte Visas
If you come to Germany for studying or job search and are not a EU citizen, you may be asked to open a blocked account (“Sperrkonto”) in order to proof your financial independence. It is required before applying for a Visa and after being admitted to a German university.
The blocked account shall have a minimum balance of €11,208 to cover the estimated expenses for one year. When starting their studies, students are then entitiled to withdraw a maximum of €934 per month. It may be more if your initial balance exceeds the legally obliged minimum amount.
Each month in Germany, you can then transfer money from your blocked account to your personal current account.
There are only few specialized banks that offer blocked accounts. Read more in our dedicated article on German blocked accounts.
International Transfer Solutions
For expats living in Germany, transferring money to and from their home countries is often a necessity – to support family, pay off loans back home, or receive payments.
- SEPA (Single Euro Payments Area) transfers are highly efficient if your home country is within the EU or the Eurozone. They come with the same fees as national transfers; hence, they should be free with most banks. SEPA is quick and inexpensive, usually reaching the recipient within one business day.
- Transactions outside the SEPA zone are generally much more complicated and slower. Traditional banks, in particular, charge high fees for international transfers, and their exchange rates are typically less favorable compared to specialized services – especially digital ones:
- Wise: Offers low fees and competitive exchange rates by avoiding high markups. It’s ideal for regular personal or business transactions.
- Western Union and MoneyGram: Useful for instant transfers to cash pickup locations but generally higher in fees than digital services.
Loans and Mortgages
If you plan to stay longer in Germany and purchase your own property, you will probably need to get a mortgage at one point. For other purposes, there are also private and business loans with varying interest rates and terms. Knowing the required documentation, credit score impact, and how to compare offers is key to securing favorable conditions.
Conclusion: Navigating Banks in Germany
Navigating the German banking system as an expat might initially seem complex. But believe me, it is manageable.
From traditional institutions to innovative digital banks, Germany offers diverse options tailored to different financial needs. By understanding the available services, the regulatory framework, and the specific challenges expats face, you can confidently choose a bank that suits your situation. I encourage you to explore both local and online banking solutions, considering factors like fees, accessibility, and customer support. Whether you are opening your first account, transferring money internationally, or looking into savings and investment options, take the time to compare providers to make informed decisions.
For additional tips and resources, check out other guides of our expat blog, where I share insights to help expats thrive financially in Germany. Your financial journey here starts with the right information—let us make it simple and stress-free!
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