Current account – A current account is used to handle your daily financial transactions. You use it as a salary account, for purchases and for all transfers and debits that become necessary in everyday life. Current accounts are offered by all banks and savings banks. Before opening a current account, it is strongly recommended to compare the conditions. The offers differ greatly in their price-performance ratio. There are current accounts where account management is completely free. However, with many banks you pay fees. Before opening, you should find out for yourself which services of the bank you need and what you can possibly do without. In many cases, a free checking account is sufficient. Sometimes, however, you are limited in the options for obtaining cash.
Online banks offer favourable conditions. However, they do not have their own network of ATMs and you have to do without personal advice. Not all of the cheap online banks issue a Girocard. You get a credit card and a Maestro card. The use is free of charge. Since especially smaller shops in Germany only accept Girocards, you will have to resort to cash. Therefore, analyse your payment behaviour in advance before you open a current account at a bank or savings bank.
Construction financing and current account
Without a current account, you can no longer conduct traditional money transactions in Germany. For this reason, a law was passed in 2017 that obliges banks and savings banks to provide every citizen with a current account. Wages or salaries can only be drawn if you have a current account. The same applies if you are planning a construction financing or want to sell a property.
Transactions related to the construction or trading of real estate are generally conducted on a cashless basis. Sometimes it is advisable to handle construction financing or the sale of a property via a separate current account. You have the right to open several current accounts. If you have a positive credit rating, no bank or savings bank will refuse to open a current account for you. When opening a current account, make sure that you choose a financially strong credit institution as a partner for your construction financing or the sale of your property. In Germany, deposits on current and savings accounts are protected. However, this deposit protection only applies up to an amount of EUR 100,000. What you have on deposit with the bank or savings bank in excess of this amount would be lost in the event of a bank failure. It can therefore be advantageous if you distribute large sums that you receive from a property sale or want to use for a construction loan over several accounts. This way, your money is safe even in the rare event of a bank failure.
The numerous offers on the market differ in small details. These concern, among other things, the cash withdrawal options, cash deposits and charges for paper-based transfers. The provision of an online account and a card for cashless account management is now standard for every current account. Find out what types of cards are offered. If you would like to make almost unlimited cashless payments within Germany, a Girocard is recommended. Mastercard, Visa and Maestro are accepted by many merchants. Compared to abroad, however, the acceptance is significantly lower.
If your preferred current account does not include a Girocard, you will have to use cash at merchants who do not accept credit cards. Make sure that cash withdrawals are as free of charge as possible. Since the cost of obtaining cash in Germany is quite high, some banks limit the free quota for withdrawing cash to three to five times a month. You can use any ATM for cash withdrawal. Alternatively, free cash withdrawals are offered at supermarkets and discount stores. This way you remain flexible and can obtain free cash at any time.
Branch banks usually offer their current accounts in combination with a Girocard. A free credit card is not always included in the offer. You can withdraw cash from the bank’s own ATMs. Some providers have joined together to form an alliance. The best known is the Cash Group of large German banks such as Postbank, Deutsche Bank, Commerzbank and Hypovereinsbank. Furthermore, make sure that the paperless account management is free or does not cost more than six euros per month.
Further information on the subject of accounts
Call money – ideal for construction financing
The term already describes the fact that call money is a short-term investment. In this respect, call money differs from time deposits or savings bonds, which are tied to a term. These investments can only be terminated at a loss and subject to a period of notice. With call money, you can have the deposit transferred to the linked account on a daily basis. For this reason, call money accounts are very suitable for construction financing. There are no fluctuations and no currency risks. You know in advance how much money is in your call money account and can plan accordingly. This is very important for a construction loan, because you have to pay the outstanding amount on the due date. However, there is also a disadvantage, and that is the low interest rate. Because call money is available at such short notice, many banks concede interest rates that are only marginally higher than the European Central Bank’s base rate. Nevertheless, the call money for a construction financing is often the only alternative if you need the deposit in the short term. Feel free to contact MeinHausverkauf.de for individual advice if you need more information on the subject of construction financing and call money.
Find out more about call money here.
Fixed-term deposits – term, interest and planning
The term fixed-term deposit refers to an investment that is tied to a specific term. You agree this term with your bank in advance. Periods of between twelve months and six years are common. The term is the most important distinguishing feature between fixed-term deposits and overnight money. While you can dispose of the balance in an overnight deposit account at any time, the money in a time deposit account is not available. If you want to receive the agreed interest, it is necessary that you do not touch the money during the entire term. If you urgently need the money, you can terminate the time deposit account. The deadlines for such a termination are one to three months. Therefore, transfer money to the fixed deposit account only if you are sure that you will not need it during the entire term.
