The Basic Account

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1. Why is a basic account important?

These days, having a bank account is a given. Rent, phone bills, insurance premiums, and utility bills are all paid using funds from your own account. It is no longer common for employers to pay salaries in cash. Furthermore, receiving social benefits from the Jobcenter or social services is usually only possible if you have your own bank account. With the introduction of the Payment Accounts Act (ZKG) in 2016, everyone is now entitled to a so-called basic account.

2. What is a basic account?

A basic account is a kind of substitute for a standard checking account. First, try to open a standard checking account. If the bank turns you down, you can apply to open a basic account. The basic account generally operates on a credit balance basis. However, the bank and the account holder may agree on an overdraft facility (Dispo). The bank is not obligated to grant an overdraft, however. You will only receive a credit card if you can prove your creditworthiness and are debt-free.

3. What services does it offer?

• Cash deposits and withdrawals

• Execution of transfers, direct debits, and standing orders

• Cashless payments (debit card transactions)

4. Who is eligible for a basic account?

Everyone is eligible for a basic account, including people without a permanent residence, asylum seekers, and those with temporary residence permits. However, anyone who wishes to use an account primarily for commercial purposes is not entitled to a basic account.

5. Where and how can I apply for a basic account?

Every financial institution that offers payment accounts must also provide a basic account. You can apply for a basic account by submitting the completed application form. You must present your ID card or passport. For asylum seekers and individuals with temporary residence permits, proof of arrival pursuant to Section 63a of the Asylum Act or the temporary residence certificates pursuant to Section 60a(4) of the Residence Act are also sufficient. Homeless individuals may also provide a mailing address, such as the address of a homeless shelter or that of friends or family members.

6. How much does a basic account cost?

A basic account does not have to be offered free of charge. Account maintenance fees generally apply. Some banks also charge a one-time setup fee. However, banks may not charge excessive fees for a basic account; they must be reasonable and based on user behavior.

7. Can an application to open a basic account be rejected? Rejection of an account opening is only permissible for reasons specified by law. For example, if you already have a basic account or an account with comparable functions at another financial institution and you are actually able to use it, or if you have committed a criminal offense against the bank, your application may be rejected. However, the opening of an account may not be refused due to poor German language skills, lack of creditworthiness, or a poor Schufa credit rating.

8. How can I appeal a rejection?

If your application to open an account is rejected or the financial institution does not decide on your application within 10 business days, you can file a free review request with BaFin, the Federal Financial Supervisory Authority. BaFin can order the bank to open the account if the rejection was unlawful.

9. Can the basic account be terminated?

You can terminate the basic account at any time. However, the bank may only terminate the account in exceptional cases. For example, if you fail to pay account maintenance fees, provided false information when opening the account, or engaged in money laundering. Termination may not be based on a lack of creditworthiness or a poor Schufa score.

10. Can the basic account be garnished?

The basic account can be garnished by creditors. However, you can have the basic account protected against garnishment immediately upon opening. An existing basic account can be converted into a garnishment-protected account—the so-called P-account—upon request.

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