You open the letter from your bank in Germany, but only understand the station? Especially when it comes to money, that doesn’t work.
But unfortunately, many banks throw around incomprehensible technical terms and leave their customers in the dark. Banking German is hard to understand.
PayPal is the first bank in Germany to translate its terms and conditions into simple German. They wanted to be there for everyone, including those who do not have to deal with the complicated language of the financial world on a daily basis.
What bank accounts are there in Germany?
Bank account is the collective term for very different accounts that one can have with a bank:
✓ Payments, such as transfers or standing orders, are processed via a current account . This account includes the giro card, better known as an EC card. You can also use it to withdraw money from an ATM or pay in the supermarket. This account can with a credit facility slip or a tolerated overdraft in the red.
✓ An everyone’s account only knows credit. Here, too, you can process payments or withdraw money as long as there is enough money in the account. Everyone, including homeless people, refugees or welfare recipients, has a right to such an account.
✓ A credit account is an account that can be overdrawn up to a certain amount. The bank determines this amount, it is called a credit line. The advantage of the installment loan is that you only pay interest on the amount you use. A credit account often has more favorable conditions than the overdraft facility of a checking account.
✓ A savings account works like the savings book in the past . Here you can only deposit or withdraw money. Bank transfers and direct debits cannot be initiated here.
✓ Even a money market account can transfer you money. For this money you get interest from the bank. Call money is a type of investment in which you can access the money invested on a daily basis. The interest rates for overnight money are therefore rather low.
✓ If you don’t need your money every day, you can deposit it into a fixed deposit or time deposit account. The interest rates are set here for a specific investment period and remain the same for this period.
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What does debit and credit mean?
Debit and credit are two terms that you know from your bank statement. There they are often abbreviated with “S” and “H”. “Debit” stands for money that goes out of the account. “Have” stands for credits, that is, money that goes into the account.
If you have no money in your account, one speaks of an overdrawn account or that the account is “in debit”.
What can I do with an account?
- With a transfer , you pay a sum of money from your account to another account.
- You issue a direct debit to another person or company, thereby giving permission for money to be withdrawn or debited from your account . This permission is called a direct debit authorization .
- A return debit happens if such a debit does not work, for example because there was not enough money in the account.
- When you keep your account online, you confirm your transactions with a tan for security reasons . This is a key figure that you use once. You can get a mobile tan sent to your cell phone via SMS, for example.
- If you would like other people to be able to access your account, give them a power of attorney . This specifies exactly what they can do with their account. It is valid until you revoke it.
- With an authorization approved to make money someone from an account under certain circumstances collect.
What interest is there?
A fixed rate is an interest rate that is set for a certain period of time.
A floating rate is one that changes. It is agreed, for example, for credits or loans. After a certain period of time, for example every three months, the interest rate is adjusted.
The key interest rate is set by the central bank. It indicates the interest rate at which banks can borrow money from the central bank.
The nominal interest rate is the interest rate that banks charge when they grant a loan. However, this does not yet include any fees or costs.
These are included in the so-called effective interest rate. This indicates the full cost of a loan. In addition to the nominal interest, these are also possible processing fees or agency commissions.
By the way: If you get interest on savings, bonds or profits, you have to pay tax on them. This withholding tax is automatically deducted by the bank and passed on to the tax office. She is thus compensated.
What do I need to know about loans in Germany?
An instant loan or installment loan can be obtained within two to three business days. It will be repaid in agreed installments.
The credit facility grants you the bank at fixed interest rates on the current account. You may then overdraw your account up to the specified amount. But this usually has very high interest rates.
If you apply for a loan on the Internet, you have to prove your identity at the bank. This is done using the Postident process . You go to a post office and have your ID checked there. Swiss Post then forwards this data to the bank.
For every bank loan , you need to submit a loan application. For this, your creditworthiness is checked first. The bank will look to see if you are able to repay the loan.
How do you trade securities?
If you want to invest money in stocks or bonds, you don’t need an account with a bank, but a deposit . Depot is French and means “warehouse”. You need a custody account if you want to trade securities (for example stocks or bonds). These securities are kept in a custody account.
If all goes well, you will receive a dividend from the company whose shares you own . This is a bonus that gives you, as a shareholder, a share of the company’s profits per share. The company determines how high it is at the end of each financial year.