'Banks in Germany: Types, Accounts, Sparkasse, Direktbank, and What’s

You’ll need a bank account in Germany almost immediately after moving there: your salary is deposited into it, and rent, utility bills, insurance premiums, and regular payments are deducted from it. For everyday life, you usually need a Girokonto with a German or European IBAN, while separate banking products are used for savings and loans.

The German banking system appears conservative: many transactions still rely on identification, documentation, SEPA transfers, and verification of the origin of funds. But within this system, there are different types of banks—ranging from traditional branch-based banks to fully digital Direktbanken.

What Types of Banks Are There in Germany?

Banks in Germany can be categorized based on two criteria: the range of services they offer and their method of service delivery.

Based on the range of services offered, the following categories are distinguished:

• universal banks—handle accounts, cards, payments, deposits, loans, investment products, and advisory services;
• Specialized banks—focus on specific areas, such as home savings, consumer lending, or real estate financing.

In terms of service models, the most common comparisons are between:

Bank Type	How It Works	Who It’s Best For
Branch Bank	Has branches, staff, teller windows or ATMs, and in-person consultations	For those who value in-person contact at a branch and assistance with paper documents
Direktbank	Main transactions take place online, via an app, website, phone, or email	for those who are willing to handle matters remotely and want to pay less for banking services

The number of banks and branches in Germany is gradually declining due to market consolidation and the growth of online banking. Therefore, it is best to check the latest Bundesbank reports for accurate statistics on the number of institutions rather than relying on outdated figures.

Filialbank: A traditional bank with branches

A “Filialbank” is a bank with physical branches. These banks also have apps and online banking, but a significant part of their service remains at the branch: consultations, submitting certain documents, receiving paper statements, handling cash, and assisting customers who find it inconvenient to do everything through the app.

Branch-based banks are often more expensive than digital ones: fees depend on the specific account, the customer’s age, regular deposits, cards, and in-branch transactions. Therefore, before opening a Girokonto, you should consider not only the monthly fee but also the cost of paper-based transfers, cash withdrawals, cards, statements, and in-branch services.

Paper SEPA Transfers and Kontoauszug

In Germany, you can still find paper SEPA Überweisung forms. The customer fills in the recipient’s details, IBAN, amount, payment purpose, date, and signature, and then submits the form to the bank or drops it into a special drop box. Sometimes these forms are sent along with a bill by online stores, insurance companies, or, for example, ARD-ZDF.

Example of how to fill out a SEPA Überweisung Zahlschein form.

To track money movements, a Kontoauszug—an account statement—is used. You can get it online, and at some branch banks, you can also print it out at a kiosk in the branch. Paper statements and transactions handled by bank staff may incur additional fees, so it’s worth checking the bank’s Preis- und Leistungsverzeichnis.

Types of Branch Banks

Branch-based banks include various groups of institutions.

Private Banks. These are commercial banks organized as private entities. Well-known examples include Deutsche Bank, founded in 1870, Commerzbank, and other banks that serve private clients, businesses, and provide investment services.

Sparkassen. Savings banks operate regionally and are part of the public-law banking sector. For customers, this usually means a wide network of branches and ATMs in their region, though specific terms and conditions depend on the individual Sparkasse. It’s best to check with the specific Sparkasse where you opened your account regarding opening, maintaining, and closing an account.

Genossenschaftsbanken. Cooperative banks operate as either cooperatives or joint-stock companies. This group includes Volksbanken and Raiffeisenbanken. A customer can become a member of the cooperative by purchasing a Genossenschaftsanteil and gain the right to participate in the cooperative model, but membership is not always required for a regular account.

Direktbank: a digital bank without a traditional branch network

A Direktbank serves customers remotely: via an app, website, phone, video call, email, or mail. Such banks typically have lower operating costs, so they often offer free or lower-cost Girokonten, competitive terms for Tagesgeld and Festgeld, and user-friendly apps.

Through the app, you can make transfers, manage your card, receive notifications, open savings accounts, apply for loans at and, and track your expenses. For immigrants, the app’s language, support for foreign documents, and a straightforward identification process are important.

Opening a current account () at a Direktbank is usually done online. Identity verification can be conducted via VideoIdent, Postident, eID, or a third-party identification service. In some cases, the bank may still send documents by regular mail or request additional confirmation of your address, residency status, or tax information.

To withdraw cash, online banks use partner networks, their own card terms, or “cash-at-shop” services at supermarkets. Free withdrawals often depend on the amount, currency, country, card type, and pricing plan.

Among the popular digital options frequently mentioned in Russian-language sources are (N26),, and (Revolut). The terms and conditions of these services vary, so before opening an account, you should check the fee schedule, deposit protection, IBAN, card fees, and rules for German residents.

Specialized Banks

Spezialbanken do not offer the full range of banking services, but rather focus on specific products. In everyday life, three main groups are most commonly encountered.

Bausparkassen

Bausparkassen are associated with home savings plans and Bausparverträge. The idea is this: the customer first makes regular savings deposits and then, upon meeting the conditions, can obtain a home loan. This product isn’t suitable for everyone: interest rates, terms, fees, and eligibility for a loan depend on the contract.

The operations of Bausparkassen are regulated by the Bausparkassengesetz. In the article on building savings, it’s important to compare rates, fees, and alternatives separately, because a low interest rate on a future loan doesn’t always compensate for the low return on the savings portion.

Installment Banks

Installment banks specialize in payment plans and consumer lending. Such a bank might be behind an installment plan at a store, a car loan, or a loan for household appliances.

Before signing a contract, it’s important to check the annual percentage rate (APR), the total cost of the loan, insurance, the term, the right to early repayment, and the consequences of late payment. The claim that obtaining such a loan is “easier” depends on your SCHUFA score, income, residency status, and the policies of the specific lender.

Realkreditinstitute and Pfandbrief

Realkreditinstitute and mortgage banks are involved in real estate financing and the issuance of Pfandbriefe. In practice, the average homebuyer is more likely to encounter a specific mortgage offer from a bank, broker, or Bausparkasse than the term “Realkreditinstitut” itself.

The activities of Pfandbrief banks are regulated by the Pfandbriefgesetz. For customers, what matters most is not the bank’s legal classification, but rather the interest rate, fixed term, equity capital, ancillary costs, property appraisal, and early repayment terms for mortgages.

Deposits, Money Protection, and Investments

A Girokonto is used for everyday spending. For savings, Tagesgeld, Festgeld, and Sparbuch are more common; these products are discussed in more detail in the article on Tages- or Festgeld.

Germany has a deposit insurance system. Legal protection typically covers bank deposits up to €100,000 per depositor at a single bank; under special temporary circumstances, coverage may be higher, but such cases must be verified according to the Einlagensicherungsgesetz and the rules of the specific scheme. Investments in securities, cryptocurrency, ETFs, or stocks are not considered standard bank deposits and are protected under different rules.

If a bank offers investments or cryptocurrency purchases through its app, this does not make the product as safe as money in a Girokonto or Tagesgeld account. Before making a purchase, you need to understand the risks, fees, tax implications, and who the actual service provider is.

Why Do Immigrants Sometimes Have Difficulties with Banks?

It is sometimes more difficult for a new immigrant to open an account than for someone with a long financial history in Germany. The reasons are usually practical, not personal:

• The bank must comply with customer identification requirements;
• A foreign passport, residence permit, Meldebescheinigung, or national visa may take longer to verify;
• A customer may not have a SCHUFA history;
• Banks are required to respond to money laundering risks and suspicious transfers;
• Large incoming transfers from abroad require a clear explanation of the funds’ origin.

For example, if someone sells an apartment in another country and transfers a large sum to Germany, the bank may request the sales contract, proof of payment, translated documents, tax documents, or other evidence of the funds’ origin. It’s better to notify the bank in advance than to risk having the payment blocked or returned.

Being denied a standard account doesn’t always mean there are no other options. In Germany, there is the Basiskonto—a basic payment account for consumers who are legally residing in the EU. However, the bank is still required to verify the customer’s identity and may deny the application for reasons specified by law, such as a violation of compliance requirements.

How to Choose a Bank in Germany

Before opening an account, compare not only the advertising but also the actual terms and conditions:

• Is there a monthly fee, and under what conditions does the account become free?
• How much does a Girocard, debit card, or credit card cost?;
• where you can withdraw and deposit cash for free;
• Does the bank accept the necessary identification documents?
• Is there an English interface and support?
• What kind of IBAN is issued, and is it suitable for your employer, rent, and recurring payments?
• How deposit insurance works;
• How much do international transfers and foreign-currency transactions cost?
• Can you quickly obtain statements, a “Mietschuldenfreiheitsbescheinigung” (certificate of no rent arrears), or similar confirmations or bank references if needed?

For your first account after moving, it’s often more convenient to choose a bank with a straightforward identity verification process and good customer support, and then later optimize your fees, cards, deposits, and investment products.

FAQ

Which is better: a Sparkasse or an online bank?

A Sparkasse is convenient if you need a branch, ATMs in the region, and in-person assistance. An online bank is often cheaper and more convenient to use via its app. For an immigrant, the deciding factor may not be the type of bank, but whether the bank accepts their documents and how quickly the identity verification process is completed.

Is it possible to live in Germany without a bank account?

Formally, cash is still used, but without a bank account, it’s difficult to receive a paycheck, pay rent, or set up insurance policies and subscriptions. In practice, almost everyone needs a Girokonto.

What is an IBAN?

An IBAN is an international bank account number. In Germany, it begins with “DE” if the account is held at a German bank. Some fintech services issue IBANs from other EU countries; this is legal, but it sometimes raises questions among employers or landlords.

Can a bank block an international transfer?

Yes, if a transaction appears unusual or the bank is unsure of the source of the funds. For large transfers, it’s best to prepare the necessary documents in advance and notify the bank.

Where should you keep your savings?

This depends on the term, amount, and risk. For short-term reserves, Tagesgeld is usually considered; for fixed terms, Festgeld; and for long-term goals, investment instruments. However, investments are not the same as bank deposits and require a separate risk assessment.