Germany runs three banking systems side by side, and all three want the same customer.
That arrangement is unusual. Most countries have private banks and then a few smaller players around the edges. Here the three are roughly matched, and they compete on the same high street. Which one suits you depends mostly on how long you plan to stay.
Three Systems, One Customer
The private banks are the ones you’ve heard of. Deutsche Bank and Commerzbank are the large ones, both run out of Frankfurt, and the app-based newcomers belong to this group as well.
The Sparkassen, or savings banks, are owned by the towns and districts they sit in. There are around 350 of them, and each is legally tied to its own patch. A Sparkasse in Kiel cannot go chasing customers in Munich.
The cooperative banks, roughly 700 of them trading as Volksbank or Raiffeisenbank, are owned by their own customers. Open an account and you can buy a share and vote at the annual meeting.
The difference shows on the branch map. Both local systems kept offices in small towns long after the private banks pulled out, which matters if you’re settling somewhere that isn’t a city. It matters more to small firms, because this is where most of the Mittelstand gets its credit.
Opening an Account
Almost everything starts with the Anmeldung, the address registration you do at the town hall after moving in. The confirmation slip it produces is what the bank wants to see, along with your passport. Plenty of accounts now open entirely online with a video identification call, which spares you the appointment altogether.
There’s a legal floor under all of this. Since 2016, every consumer lawfully resident in the European Union has a statutory right to a basic account. That includes people with no fixed address and people seeking asylum. It runs on credit balance only, with no overdraft, and the bank may charge for it. What the bank may not do is refuse it.
Which brings in the Schufa, the credit bureau that nearly every German contract reports to. You never register with it. Your first bank account or phone contract opens the file by itself.
Two things trip up newcomers here. An entry is not a black mark, whatever the word sounds like in everyday German, and simply holding an account counts as one. The real problem is the opposite. Before your first German contract you have no file at all. Landlords treat an empty file almost as unhelpfully as a bad one.
So the order matters. Register the address, open the account, and let the file start building before you go looking for somewhere to live.
The Account for the Business
That statutory right covers private use only. A freelancer or a small trader cannot claim a basic account for the business, which catches out people who assumed the right was universal.
A GmbH or a UG has no choice in the matter anyway. The company needs its own account before it can be registered at all. The share capital goes in there, and the notary needs the receipt before filing.
Sole traders and freelancers face no legal requirement to keep business money separate. Do it regardless. Most banks forbid commercial traffic on a private account in their terms. A tax audit also goes considerably better when the two were never mixed. The rest of the setup is on starting a business in Germany.
The Card in Your Pocket
The card your bank issues is a girocard. We still call it an EC-Karte, after the eurocheque system that was abolished in 2001. The everyday name is a quarter of a century out of date and shows no sign of dying. :-)
On its own, the girocard is a purely German system and does nothing at all abroad. What makes it work outside the country is the second logo on the front, the co-badge.
That part is in motion. Mastercard stopped issuing the Maestro co-badge in July 2023, and cards still carrying it stop working at the end of 2027. New cards arrive with Debit Mastercard or Visa Debit instead, which has the useful side effect of making them work for online payments too.
Coming the other way, bring a credit card. Hotel desks and car rental counters here still refuse debit cards often enough to ruin a booking. Some smaller card terminals reject anything without a Visa or Mastercard logo.
Cash, and Where It Comes From Now
The cliché about Germans and cash expired recently, and it’s worth knowing when.
Somewhere in the middle of this decade, cashless payments overtook cash for the first time since the Bundesbank began measuring in 2008. Cards and phones now carry the majority of everyday purchases, and a much larger majority of the money that changes hands. Paying by phone has climbed fast from almost nothing.
Cash still owns the small amounts, and it’s still accepted nearly everywhere. Carry some.
What changed more quietly is where that cash comes from. The cash machine network has been shrinking for years, and the branches are going with it.
The supermarket checkout absorbed the difference. Most large chains hand out cash along with your shopping now, free of charge, and the ceiling is a uniform 200 euros per transaction. Nearly all of them want you to buy something first. How little that something can be differs from chain to chain, and the thresholds keep dropping.
One catch. It’s a voluntary service, so a till that’s short on notes can simply decline. Your chances are better in the evening than first thing in the morning.
The three-system arrangement looks like clutter until you need it. A machine shop in a town of four thousand people has a banker in the same town who will still be there in fifteen years. That isn’t luck, and it isn’t the market being kind. It’s what happens when two of the three systems are legally rooted to one place.
Where that credit ends up is on German companies, and the wider view sits on German business.