Traditional national banks, direct banks or one those new Fintechs apps offer a wide variety of business accounts in Germany. Which account suits you the best depends on many factors. Find out more in this post.
So you have registered as a freelancer with the tax office and the first invoice is ready for the client. But which bank account details should you add in the invoice? Can you use your personal bank account or is a business account mandatory for freelancers?
In this very detailed post, I will discuss the factors you must take into account before choosing a business account as a freelancer in Germany and how the costs of a business account are made up.
However, if you want to skip the details and jump straight to the best offers for business account in Germany, then click here.
Disclaimer: The article includes some affiliate links. If you purchase using one of those links I may earn a small commission to maintain this blog.
Do you REALLY Need a Business Account as a Freelancer in Germany?
As a rule, there are no legal requirements that force an entrepreneur or a freelancer to open a business account in Germany. The only exception is when you’re setting up a corporation (e.g. GmbH or UG), you must open a business account.
Any freelancer is free to choose their preferred payment method, but nowadays invoices are rarely paid in cash. If you are working in any white-collar industry your clients mostly likely pay you with a bank transfer. Therefore an account dedicated to the business transactions is absolutely necessary.
Having said that it is very common for freelancers to continue using their private current account for business purposes at the beginning. But it can become quite a hassle in a matter of time.
The Practicability of Using Your Current Account as a Business Account
In principle, the scope of services of a private current account and a business account is very similar.
However, it is advisable for business owners to open a separate account for business purposes, even if the number of monthly transactions is low in the beginning.
Switching to a business account at a later stage is possible, but it comes at additional costs and great hassle. You may have to inform all your clients of new bank details or they may continue transferring payments to your old account. Think of all the monthly business-related subscriptions that you may have to update.
Do Banks Have Any Regulations for Business Accounts?
You will usually have no problem using your private bank account for business purposes for many years. As long as the number of transactions remains manageable and limited your bank probably won’t even notice. However, if your monthly transactions are too high, your bank may ask you to open a business account.
What Types of Banks Offer Business Accounts in Germany
Branch Bank (Filialbank)
A branch bank is a credit institution with a distinctive branch network. Ideally, a branch bank has branches in every major city or municipality.
In contrast to a direct bank, a branch bank thus has a better infrastructure to provide its customers with personal and individual service throughout the country.
Advantages of a branch bank:
- nationwide branch network
- Individual advice and support
- Products can be individually adapted to the customer
- high service level
You can find Postbank, Deutsche Bank or Volksbank nearly in every German city.
Direct Bank (Direkt-Bank)
A direct bank in Germany is usually one that does not maintain branches and serves customers by mail, online or by telephone. Many direct banks today operate mainly via the Internet and offer all their services and support online.
The lack of a branch network has several advantages:
- Lower costs, which are usually passed on directly to customers
- Availability 24h around the clock
- No fixed opening hours
- High safety standards
- Free additional services
DKB and NetBank are two of the most popular direct banks in Germany.
Mobile Banks (Mobile-Bank)
The term mobile banking (also known as M-Banking or mBanking) is used to describe the processing of banking transactions that take place with the aid of mobile end devices such as mobile phones or PDAs. Mobile banking can be carried out via dedicated banking app on the Internet.
Advantages of a mobile bank:
- Check your account on-the-go
- Flexibility and independent from branch opening hours.
- Paperless and online account management
How Much Does a Business Account Cost?
The fees for a business account consist of different components. Some of them are fixed fees, while others are variable. The variable fees usually make up the majority of the total cost of a business account. Therefore, it is difficult to predict the end costs of a business account in Germany.
Here are the main fees that you should consider when comparing business accounts.
Account Maintenance Fee
The account management fee can range between 0 and 98 euros per month. But there are not only differences between the providers. Often the banks have, for example, 3 account models that are associated with a different account maintenance fee for the bank account. However, a higher fixed monthly fee often comes with some perks – lower variable fees, more paperless bookings, or other additional services.
Fee for EC and Credit Cards
Depending on the account type, some EC and credit cards are free of charge. However, credit cards are often associated with annual additional costs for the business account.
Costs for Accounting Items
– Paperless Transfers
In particular, all online transfers that you make or receive from your business account are considered paperless bookings. In our comparison, the costs for this range from €0.0 to €0.30 for the respective bank account. Depending on your account model, a certain contingent of paperless bookings may also be included in your business account.
– Paper-based Transfers
Paper-based or documented transfers are those that you make using a form. This also includes checks as well as cash deposits and withdrawals. Paper-based transactions can cost up to €10.00 with some banks.
Fee for Deposits and Withdrawals
Not all providers offer deposits to the business account. In some cases, up to 5 Euros per deposit to the business account are due.
Withdrawals with the EC card are usually free of charge at the classic banks. Some direct banks and mobile banks charge high fees since they do not have their own network of ATMs.
Some mobile banks do not issue EC cards with the business account, so that money can only be withdrawn with the credit card. Then the fee is usually a percentage of the amount withdrawn. This can quickly become expensive.
Additional costs are incurred for your business account, for example for payment transactions across national borders, setting up standing orders by telephone, issuing new or (additional) cards, bounced direct debits or chargebacks.
Which Banks Offer Free Business Account in Germany?
The free business account in Germany is a widespread myth.
Many providers offer their accounts with a free account management fee. However, there are costs for cards, bookings or deposits and withdrawals on top of that. Thus the costs for the respective business account rise rapidly.
So even though on paper many banks may offer a “free” bank account, you still end up paying some fee in one way or the other.
How to Choose The Right Business Account in Germany?
The price should not be the key criterion for choosing a business account. However, there are a few basic aspects to consider when choosing the right business account – especially when there’s a large number of providers and various types of business accounts in Germany.
Here are a few factors to keep in mind when looking for a new business account as a freelancer in Germany.
Legal Form of Your Company
Not all banks offer business accounts for all legal business structures. In most cases, there is a separation concerning the bank accounts for freelancers and small businesses in Germany. Many direct banks, as well as mobile banks, do not offer business accounts for GbRs, UGs or GmbHs.
Cash Deposits or Withdrawals
Cash is still king in Germany.
Many small businesses in Germany still rely on cash flow from day to day transactions. Such cash deposits to the bank account are often not possible with direct banks or mobile banks. You should also take a close look at cash withdrawals fees, as these are also subject to charges sometimes.
Financing & Foreign Currencies
If you are planning to finance your business or need to make transactions in foreign currencies, you should take this into account when choosing your provider for the business account.
As discussed above in details, the costs for the business account can vary considerably. In addition to the monthly account maintenance fee, you should also consider the costs for paperless and paper-based bookings, fees for deposits and withdrawals, and card costs.
Trust & Reputation
As a freelancer in Germany, you have the choice between traditional banks with a very long history or young Fintech start-ups that have only been around for a few years. If a brand’s reputation is important, then you should take this into account in your decision.
Setting up Speed
Do you prefer to set up a face to face appointment in the branch or just want to fill an online form? Depending on the provider and procedure (Postident or Videoident), the account set up can take up to 2 weeks – especially for UGs and GmbHs. If you need a bank account very quickly, mobile banks may be the best option for you.
In addition to the classic account services, some providers increasingly offer supplementary services to support entrepreneurs in their business operations. These include invoicing software, accounting solutions and financial planners.
How To Open a Business Account in Germany?
Until now, the classic way to open a business account has been to go directly to the bank branch. You make an appointment with the bank of your choice and bring all the documents required for registration to your appointment.
But now, this is much easier. Most online and mobile banks in Germany let customers open a business account without visiting an office. This generally works in two ways:
- An online application process – You finish the application form online. After the bank has checked your detail you will have immediate access to your business account. In this method, you carry out the Video ID procedure (Videoident) to identify yourself.
- A postal application process – This is still the case with many branch banks. You will be asked to fill up a PDF registration form online, which you print out and take to the post office. When you hand in your documents at the post office counter, you carry out the Post-ID procedure (Postident) to open the bank account. In this case, the post office employee is authorized to verify your identity for the account opening.
Regardless of the application process, you will answer the following basic questions when opening a business account in Germany
- Name and address, date and place of birth
- Name, legal form and sector of the company
Tl:dr – A Business Account is an Essential for Freelancers
It is understandable that as a freelancer, it may not seem necessary for you to open a dedicated business account. However, there are several reasons not to rely on your private bank account. Despite the higher costs, a business account in Germany has many advantages.
In summary, now we know that:
- By law, a business account is not mandatory for freelancers (except when founding a corporation).
- Keeping business and personal transactions is recommended for transparent business management.
- Banks in Germany can ask you to switch to a business account if your monthly business-related transactions exceed a certain number.
- Banks offer a wide range of services for business accounts in Germany, which can considerably simplify and facilitate the financial processes of a company.
- Choose a bank that offers a range of business accounts and check the customer service quality of a bank before opening an account.
So Which Banks Offer the Best Business Accounts in Germany?
As a freelancer in Germany, you are spoilt for choice when it comes to business accounts. Here are a few banks – classic, direct or mobile that offer business accounts in Germany with great conditions for freelancers and entrepreneurs.
Kontist, a Berlin-based fintech offers an intuitive business bank account in Germany that you can manage easily from your smartphone. Oh, and they offer their services in English as well – so they are expat-friendly too!
They offer 3 types of business accounts for freelancers and self-employed. Free, Premium and a Duo.
With Kontist Premium you can automatically categorise your expenses and revenues based on your invoices and receipts. It also gives real-time tax forecasting and overview of the automated reserve account.
In Kontist’s Duo, you can integrate Lexoffice, popular English-German accounting software in Germany, with the Kontist Premium Business account. Lexoffice is rich with bookkeeping features for freelancers. Basically, it turns bookkeeping into a cakewalk. You can create invoices, scan receipts, capture expenses and prepare your tax return easily with Lexoffice.
Based in Helsinki, Holvi is the world’s premier digital banking service for freelancers and entrepreneurs. With their all-in-one banking service, freelancers can streamline the most complicated and time-consuming financial processes.
Just like Kontist, Holvi also makes it super easy for freelancers to create and send invoices right from their app and keep a track of all your accounting automatically.
One of the best things about Holvi is that they serve clients EU wide and therefore their services are available in nearly every European language including English.
Postbank is one of the most well-known branch banks in Germany. You may recognise them from their bright blue-yellow colours even before knowing the brand name. They’re literally…everywhere in Germany!
Postbank offers excellent conditions for a business account in Germany to freelancers and business owners.
A sole trader or freelancer can conveniently open a new Business Giro Account (completely online!) as an “Individual account (trader or freelancer)“
If you need a business account in Germany as a legal business entity (e.g. GmbH, AG, OHG etc) then you can also apply for “Individual/joint account (all legal forms)” online.
The best part is that they also provide account management through their mobile app.
So you get all the conveniences of the innovative fintech AND the reliability of a decades-old bank in the German finance sector.
- Business accounts available for ALL legal business entities
- Access to Postbank Business Assistant – their mobile banking service
- Digital and easy to your account application
- Favourable conditions for low monthly transactions
- Cash deposits/ withdrawals
- Reliable online banking
- No account management fee for 6 months, then only 5,90 Euro per month
The only downside is that they offer their services in German only. So if you’re already here looking for bank accounts and all, you may as well brush up your German 😉
Are you a freelancer or a business owner in Germany? Which business bank account in Germany did you opt for? Tell us your experience in the comments below.