This guide explains how bank accounts, credit cards and bank transfers work in Germany. It’s an introduction to banking for immigrants.
To open a bank account, read how to choose a bank.
Bank accounts
You need a bank account to get paid by your employer, pay your rent, pay taxes and buy things online. Many things are only payable by bank transfer. Open a bank account as soon as you arrive in Germany.
You don’t need a German bank account. You can use a bank from any EU country. Only German banks give you a Girocard and a German IBAN, but you don’t really need them.
Types of bank accounts
The Girokonto or checking account is your default bank account. You use it to send and receive money. This account pays near 0% interest, so don’t keep a lot of money in it. People usually keep around 2,000€ in their Girokonto. All banks must offer a free Girokonto called the Basiskonto.
The Tagesgeldkonto or savings account is where you keep your extra money. This account pays up to 4% interest.
Use a Depot or trading account to invest in stocks and ETFs. This is a popular way to invest money in Germany.
Open a business account for your business. It’s optional, but it’s a really good idea. Some banks don’t let you use your personal account for your business. Having a separate business account makes accounting easier.
Foreign students might need a blocking account (Sperrkonto) to get a residence permit. You put your money into this account, and you get a fixed amount back every month. This guarantees that you will have money to support yourself while you study in Germany.
The money you put in your Girokonto and Tagesgeldkonto is insured up to 100,000€. Even if the bank closes, you get your money back. Money in your Depot account is not insured.4
Types of banks
Traditional banks have physical locations. If you have a problem, you can go to the bank in person. Usually, these banks are old-fashioned: they rely on mail and in-person appointments. Their online services are not so good.
Online banks have no branches. You do everything online. Usually, they have lower fees and much better online banking. It’s much easier to open an account, because you do it directly in their app.
In my experience, online banks are better, but traditional banks offer more services. If you need a mortgage or a loan, you usually need a traditional bank.
Common payment methods
Germans use 4 payment methods: bank transfers, cash, Girocard and Visa/Mastercard. Other payment methods are rarely used.
Bank transfers
In the European Union, bank transfers are free. It’s the standard way to send money to other people. Bank transfers take 1 to 3 days, but instant transfers are also possible. Some banks offer free instant transfers. Others charge a small fee like 0.50€.
A company can regularly take money from your bank account with a direct debit authorisation (SEPA-Lastschriftmandat). People often pay bills and taxes that way.
Cash
Germans love cash. 58% of their transactions are paid with cash.3 They usually have around 100€ in their wallet, and use an ATM around 3 times per month.3
Many restaurants only accept cash. Most street food kiosks and Spätis only accept cash.
Always have cash with you. Choose a bank with low ATM fees.
When you often pay with cash, you have a lot of coins. There are many ways to get rid of your coins.
Girocard/EC-Karte
A type of payment card that’s only in Germany. It’s still very common.3 Many stores only accept cash and Girocards, not Visa or Mastercard. Some European websites accept Girocards.
Many banks don’t offer Girocards. You don’t really need one.1 If you can pay with Girocard, you can pay with cash.
Visa and Mastercard
Most businesses accept Visa and Mastercard, but you still need cash. Many restaurants and Spätis only accept cash. Most websites accept Visa and Mastercard.
In Berlin, some government offices don’t accept Visa or Mastercard.
Other payment methods
Germans do not use checks or QR code payments. There is no system like Alipay, Cash App, Line Pay, UPI or WeChat Pay. American Express is very rare.2 Paypal is common for online purchases.3
Credit cards in Germany
Most bank accounts come with a Visa or Mastercard debit card. The card only works if there is money in your account.
Real credit cards are rare.3 Immigrants can rarely get one. You might get a very small limit like 500€.
Some bank accounts only include a virtual card. That means that you get a credit card number, an expiration code and CVV code, but you don’t get a plastic card. You can only use it with Apple Pay, Google Pay or for online payments. You can usually get a plastic card for a small fee.
German credit cards rarely have benefits like cashback or points. Some cards have a yearly fee, and come with travel insurance. You can usually get separate travel insurance for cheaper.
Sources and footnotes
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Bundesbank study (2021) ⤴
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verbraucherzentrale.de (2023) ⤴