• Germany's news in English

Stealth costs lurking behind ‘free’ bank services

The Local · 5 Jul 2010, 15:17

Published: 05 Jul 2010 15:17 GMT+02:00

Facebook Twitter Google+ reddit

The devil is in the detail when it comes to free banking services in Germany, with caveats and conditions clawing back money from customers who sign up for supposedly ‘fee-free’ accounts.

A report published last month by German consumer advocacy group Stiftung Warentest surveyed accounts offered by 73 banks in Germany and found that while 51 banks offer accounts which can be free of charge, just eight banks offer free banking services without any strings attached.

Hermann Tenhagen, editor-in-chief at Stiftung Warentest, said: “You can get a free bank account in Germany but there are still too many caveats for many offers.”

The report concluded that the reality behind many advertisements proclaiming ‘€-zero’ banking was often a plethora of stealth charges and transaction fees. Less than a fifth of the banks surveyed were able to meet the ‘free-means-free test,’ which required that a account does not extract a monthly account maintenance fee, charge for using a credit or debit card at an ATM cash dispenser or impose ancillary terms and conditions which can result in extra costs for customers.

One of the most common caveats on free banking accounts was the requirement of a monthly salary – which ranged from €3,000 a month at Postbank to €600 a month at Targobank – to be paid into the account, or regular payments having to be made into a savings account.

Other ‘free’ accounts imposed a limit on the number of transactions a customer could make each month, before imposing additional charges. Customers with a tarnished credit history after failing to repay loans or credit cards in the past were also denied free banking facilities by banks such as Deutsche Kreditbank (DKB).

Eike Böttcher, a spokesman for Banktip.de, a price comparison website, said: “No-fee offers mostly relate to a certain amount that has to be paid into an account each month. These terms need to be checked before signing up for a bank account. Fees for using ATMs should also be considered as free transactions may apply only to a particular card. Customers can also expect heavy charges if they exceed an agreed overdraft or borrowing limit.”

Deutsche Bank subsidiary norisbank came out top in the test for offering truly free banking services to its customers, providing fee-free services online and in its branch network. PSD-Bank Berlin-Brandenburg and Hessen-Thüringen also offered genuinely free banking services.

Bank customers who choose to go online to manage their accounts also enjoyed some of the best deals in the market with Comdirect, ING-DiBa and Wüstenrot all offering highly competitive free online banking services. However, a spokeswoman for Stiftung Warentest said that only customers who feel at ease when using the internet should choose to manage their bank account online.

Christiane Krämer, a spokeswoman for Comdirect in Quickborn, said: “A customer should decide if he or she prefers a bank with affiliates or would instead prefer to be a client of a direct bank such as Comdirect, which offers longer service times and is reachable from all over the world.”

Thomas Gröbel, a branch manager at Hypovereinsbank in Berlin, said that while accounts offered by internet banks were competitive, the benefits of banking online in Germany were still outweighed by traditional bricks and mortar-based offerings.

“A customer of a branch-based bank can speak to someone face-to-face when there is a problem, rather than just another anonymous person in a call centre. A branch can also still offer services that you can’t obtain online,” Gröbel said. “In Germany, a lot of people still like to use cash. If, for example, you are with a branch and you need to withdraw more than €1,000 at a cash dispenser you can just go into your branch and pick up the money.”

Story continues below…

Böttcher said price comparison websites could be invaluable tools for a German-speaking customer seeking to find the right bank account to meet their needs, providing ‘how-to’ articles on how a bank customer should manage their finances.

But non-German speakers may also want to consider setting up an account with a bank which offers an English language service. Commerzbank and Dresdner bank offer English language services, along with Deutsche Bank, which despite not being among the most competitive banks in its imposition of banking fees, offers excellent English-language customer service.

“Check whether you need a bank with branches or not. Ask yourself if you can go without consultation. Check and ask the guys at the bank itself if free-offers are really free of charge,” said Böttcher.

Bank customers should not pay fees of more than €40 a year for an online account and €80 a year for a branch-based account, the Stiftung Warentest report concluded.

Related links:

The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

08:55 July 6, 2010 by wood artist
I'm not sure there are equivilents in Germany, but in the US the best banking deals usually come from credit unions. In my case, all the banking is free, and about the only fee is for overdrafts. If you have a savings account balance, you can even avoid that fee by having money automatically moved between accounts to cover the overdraft.

They offer all the usual services at branches, although they are not national. Most, however, belong to a national cooperative and almost any credit union can take care of your needs. When I'm in Germany I still bank "at home" through the internet, and there's no difference. I would pay a fee if I needed an ATM in Germany, but that seems reasonable to me.

10:22 July 11, 2010 by shady
@ jmjdk

We are already paying them to ' hold' our money.

There's are two things I do not appreciate of banking in Germany:

1)Your monthly income is transferred to your account on a Wednesday morning, but you only see it as available on the following Monday. This has happened on a couple of occasions to my husband. But at other times, the money is available no more than 2 days later.

Back in SA, you pay bank charges for nearly every type of transaction, but at least I can say that when you get paid, you don't have to wait up to 5 days(incl. the weekend) to have some cash in your hands.

2) You make a payment for whatever today but you only see it reflecting on your account up to 6 days later. So you can't be absolutely sure what your balance is on a regular basis.

We will be happy to do our banking when we go back to SA!!!
Today's headlines
Berlin Holocaust memorial could not be built now: creator
The Memorial to the Murdered Jews of Europe, in Berlin. Photo: DPA.

The architect of the Berlin Holocaust memorial has said that, if he tried to build the monument again today, it would not be possible due to rising xenophobia and anti-Semitism in Germany and the United States.

'Liberal' Germany stopping Europe's 'slide into barbarism'
Ian Kershaw. Photo: DPA

Europe is not slipping into the same dark tunnel of hate and nationalism that it did in the 1930s - mainly thanks to Germany - one of the continent's leading historians has said.

Eurowings strike to hit 40,000 passengers
Travelers impacted by the strike on Thursday wait at Cologne Bonn airport. Photo: DPA.

The day-long strike by a Eurowings cabin crew union is expected to impact some 40,000 passengers on Thursday as hundreds of flights have been cancelled.

Deutsche Bank reports surprise quarter billion profit
Photo: DPA

Troubled German lender Deutsche Bank reported Thursday a surprise €256-million profit in the third quarter, compared with a loss of more than six billion in the same period last year.

US 'warned Merkel' against Chinese takeover of tech firm
Aixtron HQ. Photo: DPA

The German government withdrew its approval for a Chinese firm to purchase Aixtron, which makes semiconductor equipment, after the US secret services raised security concerns, a German media report said Wednesday.

Long-vanished German car brand joins electric race
Photo: DPA

Cars bearing the stamp of once-defunct manufacturer Borgward will once again roll off an assembly line in north Germany from 2018, the firm said Wednesday.

Eurowings cabin crew union to strike all day Thursday
Photo: DPA.

UPDATE: A union representing cabin crews on Lufthansa's budget airline Eurowings has announced that strikes will last all day Thursday as ongoing contract negotiations continue to falter.

Hesse hopes to set example by building Iraqi orphanages
Refugee children in northern Iraq. Photo: DPA

The wealthy central German state of Hesse has set aside €1 million to build a school, family homes and an orphanage in northern Iraq, in an effort to help refugees there.

The Local List
10 German clichés that foreigners get very wrong
David Hasselhoff. Photo: DPA

Whether it be efficiency, humourlessness or a love of a certain Baywatch star, there are many cliches stuck in the heads of foreigners about Germany. But how true are they?

Fake Germanwings victim relative convicted in Cologne
A torn piece of metal at the crash site in 2015. Photo: DPA

A German court on Wednesday gave a woman a year's suspended jail sentence for posing as the cousin of a victim in last year's Germanwings plane crash and obtaining compensation offered by the airline.

10 German clichés that foreigners get very wrong
Sponsored Article
Last chance to vote absentee in the US elections
10 ways German completely messes up your English
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
jobs available
Toytown Germany
Germany's English-speaking crowd