Stealth costs lurking behind ‘free’ bank services

Many expats used to free banking back at home are often shocked when they try to open an account in Germany. Joe Morgan uncovers the pitfalls of hidden bank fees.

Stealth costs lurking behind ‘free’ bank services
Photo: DPA

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, 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.”

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.

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EXPLAINED: Berlin’s latest Covid rules

In response to rapidly rising Covid-19 infection rates, the Berlin Senate has introduced stricter rules, which came into force on Saturday, November 27th. Here's what you need to know.

A sign in front of a waxing studio in Berlin indicates the rule of the 2G system
A sign in front of a waxing studio indicates the rule of the 2G system with access only for fully vaccinated people and those who can show proof of recovery from Covid-19 as restrictions tighten in Berlin. STEFANIE LOOS / AFP

The Senate agreed on the tougher restrictions on Tuesday, November 23rd with the goal of reducing contacts and mobility, according to State Secretary of Health Martin Matz (SPD).

He explained after the meeting that these measures should slow the increase in Covid-19 infection rates, which was important as “the situation had, unfortunately, deteriorated over the past weeks”, according to media reports.

READ ALSO: Tougher Covid measures needed to stop 100,000 more deaths, warns top German virologist

Essentially, the new rules exclude from much of public life anyone who cannot show proof of vaccination or recovery from Covid-19. You’ll find more details of how different sectors are affected below.

If you haven’t been vaccinated or recovered (2G – geimpft (vaccinated) or genesen (recovered)) from Covid-19, then you can only go into shops for essential supplies, i.e. food shopping in supermarkets or to drugstores and pharmacies.

Many – but not all – of the rules for shopping are the same as those passed in the neighbouring state of Brandenburg in order to avoid promoting ‘shopping tourism’ with different restrictions in different states.

2G applies here, too, as well as the requirement to wear a mask with most places now no longer accepting a negative test for entry. Only minors are exempt from this requirement.

Sport, culture, clubs
Indoor sports halls will off-limits to anyone who hasn’t  been vaccinated or can’t show proof of recovery from Covid-19. 2G is also in force for cultural events, such as plays and concerts, where there’s also a requirement to wear a mask. 

In places where mask-wearing isn’t possible, such as dance clubs, then a negative test and social distancing are required (capacity is capped at 50 percent of the maximum).

Restaurants, bars, pubs (indoors)
You have to wear a mask in all of these places when you come in, leave or move around. You can only take your mask off while you’re sat down. 2G rules also apply here.

Hotels and other types of accommodation 
Restrictions are tougher here, too, with 2G now in force. This means that unvaccinated people can no longer get a room, even if they have a negative test.

For close-contact services, such as hairdressers and beauticians, it’s up to the service providers themselves to decide whether they require customers to wear masks or a negative test.

Football matches and other large-scale events
Rules have changed here, too. From December 1st, capacity will be limited to 5,000 people plus 50 percent of the total potential stadium or arena capacity. And only those who’ve been vaccinated or have recovered from Covid-19 will be allowed in. Masks are also compulsory.

For the Olympic Stadium, this means capacity will be capped at 42,000 spectators and 16,000 for the Alte Försterei stadium. 

3G rules – ie vaccinated, recovered or a negative test – still apply on the U-Bahn, S-Bahn, trams and buses in Berlin. It was not possible to tighten restrictions, Matz said, as the regulations were issued at national level.

According to the German Act on the Prevention and Control of Infectious Diseases, people have to wear a surgical mask or an FFP2 mask  on public transport.

Christmas markets
The Senate currently has no plans to cancel the capital’s Christmas markets, some of which have been open since Monday. 

According to Matz, 2G rules apply and wearing a mask is compulsory.

Schools and day-care
Pupils will still have to take Covid tests three times a week and, in classes where there are at least two children who test positive in the rapid antigen tests, then tests should be carried out daily for a week.  

Unlike in Brandenburg, there are currently no plans to move away from face-to-face teaching. The child-friendly ‘lollipop’ Covid tests will be made compulsory in day-care centres and parents will be required to confirm that the tests have been carried out. Day-care staff have to document the results.

What about vaccination centres?
Berlin wants to expand these and set up new ones, according to Matz. A new vaccination centre should open in the Ring centre at the end of the week and 50 soldiers from the German army have been helping at the vaccination centre at the Exhibition Centre each day since last week.

The capacity in the new vaccination centre in the Lindencenter in Lichtenberg is expected to be doubled. There are also additional vaccination appointments so that people can get their jabs more quickly. Currently, all appointments are fully booked well into the new year.