If you are looking for an account that allows you to pay bills, receive funds, and get cash as you need it, a normal current account (Girokonto) is generally the way to go. There are a number of factors to consider before making that decision, though, so let’s take a look at a few of the most common.
1. Monthly maintenance fees
Up until very recently, the majority of banks had a monthly maintenance fee attached to every Girokonto account. This is beginning to change, though, but there are still some banks out there who will hit you with a monthly maintenance fee, with the amount usually in the € 10 per month range.
Before you choose any German bank to maintain your current account, you need to compare a few to see what their terms and conditions are in terms of maintenance fees. Some may be monthly, while others are annual.
One way around the maintenance fee charged by German banks is to make sure that you deposit a minimum amount of money each month, which can be done by depositing your salary. Other banks may require you to maintain a minimum amount in order to be exempt from the fee.
2. Withdrawal charges
Once a current or checking account has been opened, you will be given an ATM card that will allow you to withdraw money from ATM machines as you need it. What you will even find is that a number of different banks will join together to form groups where you can use your ATM card at any of their machines for free. One of the best known in Germany is the “Cash Group,” which allows current account (Girokonto) holders to use ATM’s from banks that are all part of the larger pool. Customers who decide to use ATM machines outside of the pool may face a charge of up to 5 Euros. The majority of banks now provide their customers with an EC card that allows them to pay in a variety of different places without needing cash.
Another trend that banks have started following in recent years is providing a credit card to current account customers them to withdraw from any ATM in Germany with no charges applied. There are even some banks that have taken the free withdrawals a step further by allowing their customers to withdraw from ATM’s all across Europe for free. That said, you are advised to look at the terms and conditions offered by each current account to make sure there are no hidden charges.
3. Transfer charges
People from other parts of the world who are now residing in Germany may face a situation where they need to transfer money back and forth. If you are transferring to a country in the EU, you can do so for free through SEPA. Transferring to countries in other parts of the world may incur a charge, which will be either a flat rate or a percentage of the amount being sent. The majority of banks will also charge for receiving money from countries outside the EU, which will be on top of the currency conversion rates. There are some banks that have a partnership with banks in foreign countries that allow for free transfers. An example of that would be the relationship between Deutsche Bank and Bank of America, where transfers to and from are free.
4. Interest rates on deposits
The amount of interest offered by banks with current accounts is usually non-existent or very small. The average Girokonto account has an interest rate in the region of 0% to 0.5% per annum. Some banks allow customers to earn a little more by offering them the opportunity to deposit to a linked Tagesgeldkonto, which is essentially an account that offers a higher interest rate. The money deposited into the account is usually available immediately, while transferred funds are available within 2-3 days.
5. Internet banking
Every bank now offers Internet banking in one form or another. Some banks have feature heavy Internet banking options, while others forego physical branches, choosing instead to deliver all of their services online. While you may think that a German language online bank would be tough to follow and understand, the fact is that they can be easily mastered by learning a few simple banking terms.
6. Customer service
One of the biggest complaints that foreigners have with German banks is the level of customer service. It’s fair to say that some of that is brought on by an inability to break through the language barrier. Whatever the case may be, it is worth doing a little research to see which banks are known for good customer service and which re not. There are a number of different surveys out there that will tell you all you need to know about German bank and customer service.
If you are English-speaking expat living in Germany or just visiting this country, when choosing the right bank the good thing to check into is to whether or not the bank branch you choose has an employee who speaks English.
You may also find a few banks that have a dedicated English-speaking counter available for customers looking to open a new account. These are very much the exception, though, and foreign customers are more than likely going to have to navigate a German speaking representative when calling customer service.