Banking Finances in Germany
Banking & Finances in Germany
Getting information about the banking sector and financing options is crucial these days. Being an expat in Germany, you must have an idea and clear understanding of the German banking sector and how to manage finances efficiently while living in Germany. If you are looking for a complete guide about the banking sector, ATMs, dealing with finances, investment options, and a range of relevant topics, this guide is for you.
As you know, everyone needs a bank account for a smooth and hassle-free life, and so do you if you are moving to Germany. Let us first discuss the banking sector in Germany.
Banking Sector in Germany
Germany is a well-known country for its non-discriminatory and well-developed financial services offered to those in Germany. Whether corporate financing is on the rise, the German financial system is still based on banks in Germany. Here are a few essential factors that are associated with the banks and finances in Germany.
Business Bank Accounts
Freelancers and self-employed individuals don’t need to open a separate bank account in Germany. They can manage their finances through their current bank account in their home country through international banking. Now, why would you pay international fees to operate your bank account in your home country? So, to avoid the high international fees, you should open a separate business bank account in Germany.
Blocked Account
Being an international student, you would need a German visa, for which you must have a blocked account. If you are looking for a job in Germany, a blocked account will help you to get your German visa quickly. A blocked account is a bank account in which you deposit some money. The deposited amount proves you can fulfil your financial expenses during your stay in Germany. The required minimum deposit to apply for the visa is 11.208 Euros per year, which means you have a monthly allowance of 934 Euros per month for living in Germany.
Sending Money Overseas
Being an expat in Germany, you will need to make transactions overseas. Sending money overseas is a quick and straightforward process if you know the complete details of the procedure. Sending money includes essential factors like fees, exchange rates, and time to transfer money from your home country’s bank account to your German bank account. You can send money overseas in different ways, for example, in person, in a bank, through a website, through a mobile app, or by using online money transfer services in Germany.
Personal Credit
Personal credit is all about getting a loan in Germany given to a person privately, whether by a bank or a private person. Personal credit is typically based on fixed monthly instalments with an interest rate of 4% to 6%. The loan amount depends on your current job, creditworthiness, and background.
SEPA (Single Euro Payment Area)
Understanding SEPA is beneficial if you want to get acquainted with the Single Euro Payment Area. SEPA is very significant in financial transactions in Germany. SEPA is used in around 27 countries across the globe.
ATMs for Quick Transactions
ATMs (Automatic Teller Machines) are a quick and safe way to get cash from your bank account. You can easily convert the money in your bank account into cash to meet your daily needs and financial expenses. There are a lot of ATMs in Germany to make your transactions possible. The German population is almost 80 million, which are served by 100,000 ATMs (Geldautomat)
English Speaking Banks
No worries if you do not know German, English-speaking banks are there to give you similar services according to your financial needs and requirements. These banks were formed to overcome the language barrier for expats in Germany.
Investment and Brokerage in Germany
Investment in Germany
Germany, previously named the Federal Republic of Germany, is the most famous country in Europe. Its economy is very strong as it has a culture of investment, which makes the money in a circle. You get your monthly salary and save some amount in your bank account for the rainy days. It is good to make your savings stronger and more powerful in purchasing. Investment opportunities are tremendous so you might not lose the value for money you have in your bank account. With investment in Germany, you will be able to fight with the increasing inflation every day.
Brokers in Germany
Once you decide to invest your savings, you have to find a broker in Germany who can help you go through the complete process without any worries. Investing your savings and money through a broker in Germany is a great option. There are a lot of online brokers you will find in Germany. Choose an online broker in Germany after carefully looking at the various essential factors like reliability, fees, customer reviews, authenticity, compatibility, and services.
Credit Cards in Germany
Two typical categories of credit cards are used in Germany. These credit cards are classified as;
- Prepaid credit cards
- Free credit cards
Prepaid Credit Cards
A prepaid credit card is a way to manage your finances in the most effective way. Getting a prepaid credit card is beneficial if you want to make large international transactions. Cash withdrawal, online payments, and transfer of funds to your loved ones have become easy with the help of prepaid credit cards in Germany. Among many prepaid credit card options, you can find the best-prepaid credit card that suits you. If you do not know German, you can choose a credit card company that offers English-speaking customer support.
Free Credit Cards
Not all credit cards charge hundreds of Euros per year; there are free credit cards, too. A free credit card is excellent for managing your finances as you can pay your educational fees, mess charges, online bills, hostel dues, and many other transactions. Many free credit card providers offer customer support 24/7 for free, while others offer interest-free instalments for the first few months.
Loans and Credit in Germany
Being an expat in Germany, you might need a bank loan to finance yourself. Whether you want a house or car, you can have a bank loan to fulfil your needs. Getting a loan becomes easy because of the following factors;
- Good credit score (SCHUFA)
- Resident in Germany
- Have a stable source of income
Wrap Up
Dealing with Germany’s banks and financial system can be problematic initially, but with this guide, you can find it super easy. This guide has complete details about the banking and financial system in Germany. Whether you are looking for a credit card, want a loan, need to open a bank account, or are looking for investment opportunities, you will find this article very helpful. If you have all the information, your stay in Germany will be smooth and hassle-free. Happy financing!
