It’s hard to imagine life without a bank account. In Europe, everyone, including refugees, asylum seekers and those with a tolerated stay have the right to a payment account with basic features. We look at the ins and outs of opening a bank account in Germany and everything that goes with it.
In order to fully participate in today's economic and social life, a bank account that allows you to deposit money, withdraw cash and make credit transfers is indispensable. For refugees, of course, this is no exception.
In July 2014, the European Union enacted the Payment Accounts Directive, which gives everybody who legally resides in the European Union the right to a so-called basic payment account (“Basiskonto”).
Every bank with a consumer business, including private banks, is obliged to open such an account for every applicant within ten business days, irrespective of the applicant's credit status.
In Germany, the Payment Accounts Act (“Zahlungskontengesetz”, or ZKG) from June 2016 states that anyone is allowed to open a basic account, including those with no fixed address, recognized refugees, asylum seekers as well as persons with a tolerated stay (“Duldung”) who don’t have a residence permit.
However, in practice, some people may experience difficulties despite the legal directive. There have been reports of rejections by different banks and post offices in response to asylum seekers' requests to open an account, for example in Italy. This prompted the Italian Banking Association (ABI) in May to state that asylum seekers must only show their stay permit to be able to open an account.
Here’s what you need to know about basic payment accounts in Germany:
Why do you need a bank account?
- to pay bills, such as rent, electricity, gym membership, etc.
- to receive money, for example one’s salary or social benefits
- place orders on the internet
- banks are safe places to keep your money
Which documents do you need to open a basic payment account?
- personal information including your name, date of birth, place of residence and place of birth
- a registration certificate
- proof of identity (“Legitimationsnachweis”), i.e. an ID card or passport; if you don’t have either, a proof of arrival, a residence permit or a certificate of suspension of deportation also suffices
- for online bank accounts, you usually have to undergo an identification and verification procedure called the POSTIDENT procedure, which might be done via online video identification
What can I do with a basic payment account?
- basic accounts are so-called credit accounts ("Guthabenkonto"), which means you cannot get into the red
- you can set up regular standing orders ("Daueraufträge"), for instance to pay your rent so you don’t forget
- you can also make payments via direct debits ("Lastschschriften"); you can reverse each transaction within eight weeks
- make money transfers to bank accounts in Germany and other countries; money transfers within Europe are usually free of charge as long as it’s from one IBAN to another and in the same currency
- you will get a debit card (“Girocard," formerly known as "EC-Karte”) that allows you to shop in brick-and-mortar stores as well as online
- you might also get a credit card at your local bank; if you don’t have a regular income, you’ll likely only get a prepaid credit card, which you have to top up with money first
- get account statements (“Kontoauszug”) at the statement printer at your bank; although not mandatory, you should keep your account statements for at least one year as you will likely be charged extra if you need copies later on
- in case the bank rejects your account application, it must inform you within ten days
- provide information on fees prior to opening the account; for the duration of the contract, it must inform you at least once a year about fees levied, overdraft interest rate and the credit interest rate
- it must also make charge information (“Entgeltinformation”) transparent online
- when you switch to a different bank, your bank must help you by “transferring standing orders and other services … in an uncomplicated manner”
- your bank may only reject or terminate basic accounts under certain conditions; generally, however, banks – as well as customers – have the right to terminate standard bank accounts without giving a reason due to the prevailing contractual freedom in Germany
- terminate one’s account in case of non-compliance with the legislation on money laundering and terrorist financing or on the prevention and investigation of crimes
Which obligations come with opening a bank account?
- you must inform the bank when you change your address
- make sure there is always a sufficient amount of money so you can make transfers and avoid overdrawing fees
- avoid getting in default for more than two months and owing the bank more than €100
Things to consider when choosing a bank
- proximity of local branch
- availability of ATMs in your city and elsewhere
- account management fees (up to €15 a month for a basic account)
- you can compare different basic payment accounts here; a publicly accessible, operationally independent comparison website isn’t available yet in Germany
- avoid dubious online prepaid credit card offers that allegedly offer thousands of euros in credit and don't require a credit score check ("ohne Schufa"); they usually come with hidden fees
- if you’ve been refused a basic payment account, you can get help and request a review to see if the decision is lawful here
- money transfers to non-EU countries as well as to currencies other than the Euro can incur additional charges on the receiver’s end; if in doubt, always ask your bank about possible charges before making a transfer
- for more information on banks’ obligations, fee transparency, grounds for rejection and more see German Payment Accounts Act FAQs
your bank might charge for money transfers or only offer a limited number of free transfers
- if you have difficulty proving your identity during the POSTIDENT procedure at your local post office, ask the clerk if they accept a different document, try going to a different branch or contact the credit institute directly
- always carry some cash with you; not every store, etc. in Germany accepts credit and debit cards
- some shops, restaurants, etc. refuse to accept large bank notes, usually starting with €100
credit card payments are usually deducted from your account much later than payments with debit cards