Managing Your Money as an Expat: Understanding Banking Services in Germany

Published on January 17, 2026 and written by Cyril Jarnias

Moving abroad always upends the way you manage your money. In Germany, this change is even more pronounced, because the banking system is both very robust, heavily regulated… and sometimes confusing for newcomers. Between the importance of cash, the specific nature of the Girocard, blocked accounts for visas, and the famous Schufa credit score, it’s better to arrive prepared to avoid unpleasant surprises.

The German banking landscape: a solid but fragmented system

The first thing to understand is that the German banking system rests on three main pillars that coexist and compete.

Private commercial banks hold about 40% of banking assets. This includes well-known names like Deutsche Bank, Commerzbank, or HypoVereinsbank. They operate nationwide, often with hundreds of branches, and are heavily involved in retail, business, and international services.

Cooperative banks (Volksbanken / Raiffeisenbanken) form the third pillar. They are owned by their members and also operate on a regional model, with a dense network of branches, especially outside major cities.

Alongside these three blocks, there are online banks and neobanks (N26, bunq, C24, Tomorrow, etc.) and payment providers like Wise or Revolut, which don’t always have full banking licenses but offer many of the services needed for daily life.

This system, considered robust and highly regulated, can nonetheless give an impression of fragmentation: nearly 1,500 banks coexist in Germany, with about 371 credit institutions, close to 1,000 local cooperative banks, and over 400 savings banks. For an expat, the challenge is therefore to choose a provider suited to their profile rather than getting lost in the mass of offers.

Why a German account is almost indispensable

Technically, it’s possible to live in Germany using an account from another EU country. The SEPA regulation allows receiving a salary, paying rent, or bills from any European IBAN, with an identical deposit guarantee up to €100,000. In practice, many expats quickly realize the limits of this approach.

Many employers, public authorities, internet providers, insurers, or landlords still refuse foreign IBANs, even though this practice is illegal (known as “IBAN discrimination”). Having an IBAN starting with DE often simplifies procedures and avoids endless back-and-forth.

A German account is also almost mandatory for:

Another important point: opening an account with a German bank generally creates a Schufa file, meaning a credit history. This file, managed by the Schufa agency, is checked for granting a loan, subscribing to a post-paid phone plan, or signing a lease. Without a history, it’s often harder to secure housing. Conversely, accounts opened with non-German providers (Wise, bunq, banks from other EU countries) do not create a Schufa history.

Finally, in daily life, a local account avoids paying repeated currency exchange fees and makes it easier to use the preferred payment methods in Germany.

Cash, cards, and payment habits: what surprises newcomers

For many expats coming from countries where everything is paid by card or mobile, Germany can seem paradoxical. The country is highly developed, but cash remains omnipresent. Germans still withdraw cash on average three times a month, for a total amount of around €200. Some restaurants, cafés, doctors, hairdressers, or small shops only accept cash or the Girocard.

At the same time, Visa and Mastercard are increasingly accepted, especially in supermarkets, major retailers, store chains, and online services. However, credit cards remain less entrenched in usage than in the US, UK, or some Asian countries. Many Germans live with a simple debit card.

However, card payments surpassed cash usage in volume starting in 2018, and mobile payment services like Apple Pay or Google Pay are gaining ground, even if they are still used by a minority compared to physical cards. SEPA transfers and direct debits also remain very popular, especially for recurring bills.

Opening an account in Germany: procedures, documents, and pitfalls to avoid

Opening a current account (Girokonto) can be done in a branch or online. In any case, expect a minimum of formalities, especially for non-EU nationals.

Banks generally require: financial documents, bank statements, proof of identity, and proof of income.

– a valid passport;

– a German address, proven by a registration document (Anmeldung) or a certificate of residence (Meldebescheinigung) issued by the Bürgeramt;

– for non-EU citizens, a valid visa or residence permit, sometimes for a minimum duration (6 or 12 months depending on the institution);

– possibly proof of income (employment contract, pay slips, university enrollment, etc.) and, in some cases, an initial deposit.

More and more banks offer fully digital opening, with video identification via providers like IDnow. This is particularly true for neobanks (N26, bunq, Tomorrow, C24, etc.), but also for more traditional institutions (Commerzbank, Deutsche Bank). The online process can be faster but often requires more carefully scanned or photographed documents.

Banks and neobanks

For students, the situation becomes even more complicated with the frequent requirement to provide a blocked account (Sperrkonto) as proof of financial means for the visa. We’ll come back to this later.

An often overlooked point concerns Schufa. If you submit multiple account applications in a short time, each bank performs a credit check which can damage your score. It’s therefore better to target a few banks suited to your profile rather than applying in rapid succession.

How much does a current account cost in Germany?

Unlike some countries where current accounts are largely free, many German banks charge account maintenance fees (Kontoführungsgebühren). These fees often range between 0 and around €13.90 per month, depending on the offer.

Often, these costs are reduced or waived if certain conditions are met, for example:

– receiving a minimum monthly income (often around €700);

– holding a certain volume of assets with the bank (for example €50,000 at Commerzbank);

– student status below a certain age (often under 26 or 28).

Cash withdrawals at your own bank’s ATMs are generally free. On the other hand, using an ATM from another bank can cost between €5 and €10 per withdrawal. To limit these fees, major institutions have grouped together in free ATM networks, notably the Cash Group, which includes Commerzbank, Deutsche Bank, HypoVereinsbank, and Postbank.

The table below allows for a quick comparison of some typical fees for expats:

Bank / Service	Standard monthly fee*	Free withdrawals / month (Germany)	Card included
N26 (Standard)	€0	2 to 3 free withdrawals, then €2	Virtual Mastercard debit card
Commerzbank Girokonto	€4.90 (can be waived under conditions)	Unlimited withdrawals in the Cash Group	Free Girocard, virtual Mastercard
C24 Smart	€0	4 free withdrawals / month	Free Mastercard + Girocard
bunq (free)	€0	No free withdrawals	Virtual card (physical card is paid)
Wise	€0	Up to €200/month free	Visa debit card (€7 one-time fee)

Prices subject to change by the banks; special conditions for students, premium profiles, etc.

To reduce the cost of transfers outside the eurozone, providers like Wise or XE.com stand out, applying the real mid-market exchange rate with a clear commission, often between 0.5% and 1% of the amount.

Which banks are best suited for expats?

Not all German banks are equal for a newcomer. Some combine services in English, streamlined procedures, and acceptance of foreign passports, while others require a long local history and excellent German language skills.

Particularly “expat-friendly” banks

Several institutions stand out with offers designed for foreigners.

N26 is probably the most well-known neobank. 100% mobile, it offers an interface and support in English, French, German, Italian, and Spanish. Account opening takes a few minutes on a smartphone, without requiring immediate Anmeldung. The Standard offer is free, includes a German IBAN and a virtual Mastercard debit card (the plastic card costs €10 once). Two or three withdrawals in euros are free each month, then they are charged €2 each. Card payments in other currencies do not incur foreign exchange fees. However, some non-EU nationals must present a valid German residence permit of at least one year. Another key point: an N26 account creates a Schufa file, which is interesting for future access to housing or credit.

bunq, a Dutch bank, offers a German IBAN and an interface available in many languages, including French and English. It is possible to open an account without Anmeldung or tax number initially, but these documents must be provided within 90 days, and you must be physically in Germany at the time of opening. The free account is limited: no physical card or free withdrawals, but paid offers include up to six free withdrawals per month and advanced multi-account features. An important advantage for some expats is that bunq does not generate a Schufa file, which may appeal to those who want to separate their “basic” finances from their German credit history.

C24 is an interesting German mobile bank for those who speak German. Its free Smart account includes a free Mastercard and Girocard, with four free withdrawals per month and no foreign exchange fees on payments abroad. It is known to be fairly open to foreigners, but non-EU citizens must have a residence permit, and US citizens are not accepted. A Schufa file is created upon opening.

Finally, Tomorrow Bank targets expats concerned with environmental issues. This “ethical” mobile bank, based in Hamburg and operating with Solarisbank, offers a free account under conditions (monthly deposit of €500), a Visa debit card, and an app entirely in English. Deposited money is used to finance sustainable projects (renewable energy, social housing, etc.). In return, cash withdrawals are limited and incur fees, requiring a preference for card payments.

Useful banks but less accessible to newcomers

Some banks are very good market players, but their conditions make them more difficult to access for newly arrived expats.

Sparkasse and Volksbank, despite their massive presence (the Sparkasse ATMs represent about 45% of the country’s ATMs, those of the Volksbanken 32%), are not always the best fit at the start of a stay. They almost always require a registered address, a residence permit, and a good level of German to navigate their procedures. The advantage is their great tolerance towards nationalities, including from sanctioned countries, but each entity is very local and you sometimes have to change banks if you move to another city.

Deutsche Bank, very well-known internationally, offers part of its services in English, including a hotline, but generally charges higher fees than Commerzbank for comparable service. Its account opening process is known to be slow and demanding for non-EU citizens.

Revolut is often mentioned among international alternatives, but requires a German tax number to open a local account, which is only possible after address registration. It is therefore not the ideal solution for the very first days in the country.

Comparing options: language, cards, withdrawals, Schufa

To choose an institution, it’s useful to look beyond just monthly fees and consider a few concrete criteria: availability of services in English, the type of card issued, conditions for cash withdrawals, or impact on the Schufa file.

Bank / Service	App / support languages	Girocard provided	IBAN starts with DE	Creates a Schufa file	Useful notes for expats
N26	EN, FR, DE, IT, ES	No	Yes	Yes	Fast opening without Anmeldung, very suitable for first months
Commerzbank	App/online in DE & EN	Yes	Yes	Yes	Major branch bank, free withdrawals in the Cash Group
bunq	EN, FR, DE, + others	No (free offer)	Yes	No	Easy expat account, no Schufa, but withdrawals are paid on free plan
Wise	EN, DE, FR, etc.	No (Visa, not Girocard)	No (IBAN BE)	No	Ideal for international transfers and getting started before arrival
C24	DE only	Yes	Yes	Yes	Free account with Girocard, but no English support
Tomorrow Bank	EN	No (Visa only)	Yes	No (via Solarisbank, less checking)	Ethical bank, limited withdrawals, very mobile-oriented

Blocked accounts (Sperrkonto): a mandatory step for many non-EU citizens

For many expats from outside the EU/EEA who come to study, look for work, or attend training, the issue of the blocked account is central. This type of account serves as proof for German authorities that the holder has sufficient resources to support themselves during their stay.

The principle is simple: the student or visa applicant deposits in advance a sum corresponding to one year of living expenses, calculated from official scales (BAföG). This money is not freely available. Upon arrival in Germany, the holder can only withdraw a fixed amount each month, for example €992 for a total annual amount of €11,904 according to the current scale. The goal is to prevent them from withdrawing everything at once and ending up without resources later.

This blocked account is required for many types of medium or long-term visas, notably:

– student visa (bachelor’s, master’s, PhD);

– job seeker visa;

– visa for language courses longer than 90 days;

– visa for vocational training or apprenticeship;

– au pair visa;

– opportunity card (Chancenkarte);

– visa for recognition of foreign degrees or participation in a Studienkolleg.

Exceptions exist, however. Nationals of the EU/EEA and Switzerland are exempt. Those who receive a scholarship fully covering living costs (DAAD, Erasmus+, government scholarship, etc.) can use the scholarship certificate as proof of financial means. An official sponsorship declaration (Verpflichtungserklärung) by a German resident, public funding from the home country, or an approved student loan can also replace the blocked account.

Required amounts and additional costs

The minimum amount to deposit is set by regulation and revised regularly. As an order of magnitude, it is currently around €11,904 for one year, which corresponds to €992 per month. For some categories (training, apprenticeship, language courses), a 10% surcharge may be required, bringing the total to about €13,094.40 (€1,091.20 per month).

It is possible to deposit more than the minimum, but the monthly withdrawal limit remains set at the official amount, unless the additional sum is explicitly intended to cover transfer or exchange fees.

Blocked account providers generally charge:

Where to open a blocked account?

It is possible to go through either a traditional German bank or a specialized provider that works in partnership with a German bank.

Some banks like DKB, Targobank, Postbank, Sparkasse, HypoVereinsbank, Volksbank, or Commerzbank may offer blocked accounts, but these offers are often easier to obtain once already in the country, with in-branch procedures and sometimes physical document submissions. Moreover, not all branches offer this service.

Dedicated providers like Expatrio, Fintiba, Coracle, Studely, or Drop Money specialize in assisting international students. They offer 100% online processes, multilingual interfaces, and often bundles combining a blocked account and student health insurance, simplifying the visa application. Some, like Expatrio, also include a basic current account usable upon arrival.

It is essential to verify that the blocked account is indeed held in a bank registered in Germany. Accounts opened in foreign banks, even reputable ones (like Kotak Mahindra Bank in India), may be rejected by German consulates or require a later transfer to a German bank, resulting in loss of time and fees.

Students, young professionals, freelancers: adapting your bank choice to your situation

Most major German banks offer specific accounts for students, often without account maintenance fees up to a certain age.

For example, Commerzbank offers a free student account until age 28, sometimes including a free annual credit card if a monthly deposit threshold is met. Deutsche Bank, ING, comdirect, Berliner Sparkasse, and Volksbank also have offers with no management fees for students, sometimes with a symbolic cost for the debit card (e.g., €8.50 per year at Berliner Sparkasse). To benefit, you generally need to provide proof of enrollment in a higher education institution.

For salaried employees on permanent contracts, the priority will often be a bank that easily accepts their nationality, offers services in English, and provides both a Girocard for daily life and a Visa/Mastercard for online purchases and travel. In this context, a duo like Commerzbank + N26 is common: a major bank for salary, direct debits, and Schufa, and a neobank for flexibility and travel.

Withdrawing cash without blowing your budget

Since cash is still heavily used, especially in small shops, the issue of access to fee-free ATMs is central. The country is covered by three major ATM networks:

– Sparkasse ATMs (about 45% of the network);

– those of the BVR cooperative banks (Volksbanken/Raiffeisenbanken), around 32%;

– ATMs of the Cash Group (Commerzbank, Deutsche Bank, HypoVereinsbank, Postbank), about 15%.

Each bank favors its own network, and sometimes has agreements with other institutions. Some offer a limited number of free withdrawals at any ATM, for example:

Others focus on free withdrawals within a given network, but charge high fees for withdrawals elsewhere. This is the case for many Sparkassen or Volksbanken: free withdrawals at their ATMs, but fees around 2% (minimum €7.50) on other networks.

To optimize, many expats choose to:

– favor a bank linked to a large network (Cash Group, Sparkasse, BVR) or offering multiple free withdrawals;

– supplement with cashback at the checkout in supermarkets or drugstores via Girocard (dm, Rossmann, Aldi Süd for Mastercard), which allow withdrawing up to €200 per purchase.

International transfers: how to send money without getting fleeced

Germany is one of the EU countries that sends the most money abroad. In 2019, residents transferred about $19 billion in remittances to other countries, nearly 18% of all outgoing flows from the 27 member states. The expat community in Germany uses these transfers to help family back home, pay for studies, buy property, or settle international bills.

To send money from a German account, several routes exist. Traditional banks allow making SWIFT transfers via the app, website, or in a branch. It’s a simple solution for large amounts, but often costly.

Banks apply:

Processing times range from one to five business days. Some banks offer faster “express” options, but at an even higher cost.

Transfer companies with physical agencies (Western Union, MoneyGram) allow receiving funds in cash without a bank account, which can be useful for helping a relative without formal banking access. They are, however, significantly more expensive, with commissions that can reach 7 to 10% of the amount sent.

Generally, to minimize costs:

– it’s better to send one large sum rather than several small ones if fixed fees apply;

– it’s preferable to choose the standard timeframe rather than express service, if time is not critical;

– always compare not only the displayed fees, but also the effective exchange rate used.

Multi-currency accounts and offshore banking: centralizing your financial life

For expats with income, investments, or commitments in multiple countries, a simple local current account is not always enough. Solutions like Wise’s multi-currency account allow holding and managing several currencies simultaneously (euros, dollars, pounds, etc.) and even having local banking details in different countries. This facilitates international receipts and payments without multiplying local accounts.

Taxation and wealth management: what’s at stake behind choosing a bank

Even though the issue goes beyond simply opening an account, an expat settling long-term in Germany must keep in mind that the country applies worldwide taxation on tax residents: anyone with a residence or spending more than 183 days a year in Germany must in principle declare all their worldwide income to the tax authorities (Finanzamt). Where the income is paid – into a German, French, or American account – doesn’t matter; transferring money from abroad to Germany is not, in itself, a taxable event, but the income that generated these amounts must be correctly declared.

Financial income (interest, dividends, securities capital gains) is generally subject to a flat-rate withholding tax of 25% (Abgeltungsteuer), plus the solidarity surcharge (5.5% of the tax) and, where applicable, church tax, resulting in an effective rate close to 26–28%. German banks automatically deduct this tax on gains realized via their securities accounts. On the other hand, if you invest via a foreign broker, you must declare this income yourself.

Setting up an effective banking strategy in Germany

Faced with the apparent complexity of the German banking system, it’s useful to think in terms of a gradual strategy, rather than looking for the “perfect” bank from day one.

A pragmatic approach consists of: identifying the most effective solutions based on specific contexts and needs.

In any case, it’s better to avoid mass-applying for multiple accounts in rapid succession. Each application can trigger a Schufa inquiry, and a high number of requests concentrated in a short period can harm your credit score.

In summary, managing your finances in Germany as an expat requires some preparation, but the system offers a wide variety of options: stable traditional banks, agile neobanks, multi-currency accounts, blocked accounts to secure a visa, dense ATM networks, and competitive international transfer services. By intelligently combining these different building blocks and staying mindful of fees, it’s possible to build a banking architecture that is both comfortable for daily life, efficient for cross-border transfers, and compliant with the country’s administrative and tax requirements.