Finance, tax and insurance
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Finance, tax and insurance

In Germany, you will need your own bank account to handle many of your affairs, such as for payment of your wages, to transfer rent, or for various other types of transfers and withdrawals.

Mehrere Aktenordner nebeneinander in einem Aktenschrank © Fotolia - Picture-Factory
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© Fotolia - Picture-Factory

Savings account or current account

You will generally need a current account to make transfers in Germany. This can be used to pay rent, fees or similar bills. It is usually possible to open this sort of account with any of the banks or savings banks (Sparkassen) in the city, and there will not usually be any additional fees to pay. The documents you will need to open an account are your passport, the card issued to you when you registered your address, and either a pay statement (for employees) or a letter of acceptance from your university (for students).

There are many different banks and savings banks in Germany. The main difference between them is in their ownership structure. Most banks are privately owned, so belong either to individuals or institutional investors. Consequently, their first priority is to make a profit. Savings banks, on the other hand, belong to the local authority and serve its local citizens. In other words, they are publicly owned. Stadtsparkasse Magdeburg is a case in point; it is run by the City of Magdeburg.

Here is a list of banks and savings banks in Magdeburg:
Stadtsparkasse Magdeburg
Deutsche Bank
Commerzbank
Postbank

Blocked account

A blocked account is essential for all students from non-EEA states, as it provides evidence that you have adequate financial resources for at least a one-year stay in Germany. To open a blocked account, you will require a minimum sum of Euro 10,236. This is the equivalent of the average financial expenditure of a student spending one year in Germany. During their stay, students will be able to withdraw a maximum of Euro 853 per month from their blocked account, so as to ensure that the account is not overdrawn by the end of their stay.

There are two banks at which you can open a blocked account: Deutsche Bank and fintiba. You will find additional information about blocked accounts and the other conditions you must fulfil on this page: https://www.studieren-in-deutschland.org/sperrkonto-auslaendische-studenten/

Living costs

What monthly expenses can you expect to incur? We’ve made a list.

Grants

Grants can be awarded to provide students and academics with financial support and in recognition of their performance. These are usually given by foundations or businesses, and are often aimed at specific target groups. So if you wish to apply for a grant, you should take care to ensure that you fit the desired profile. For instance, some grants are only intended for students studying particular subjects, the citizens of certain countries, or people who have already obtained specific qualifications.

DAAD has compiled a grants database.

Half of the ‘Deutschlandstipendium’ is paid by the Federal Ministry of Education and Research, and the other half by companies, foundations and private individuals. Students receive Euro 300 per month for at least two semesters, but for no longer than up until the end of their standard period of study. This support does not depend on your income, and can easily be used to top up additional BaföG payments. The grant helps young people improve their living and learning conditions. Applications should be submitted via your university.

The State of Saxony-Anhalt awards doctoral scholarships through its graduate scholarship programme. Applications should be submitted via your research institution / university. 

Part-time jobs

Students often find that a part-time job provides them with a welcome opportunity to improve their financial situation, and the same applies to students from other countries. However, there are a few things to watch out for if you want to find a part-time job in Germany. Firstly, there is the number of hours worked: foreign students who are not from EEA countries may only work for a maximum of 120 full days or 240 half days per annum without having to register with the Aliens Authority or the Employment Agency. If they wish to exceed this amount, they must ask both agencies for permission. In addition, they are not allowed to work in self-employment or perform freelance work.

There are also a few things to be aware of in terms of tax law. Normally, anyone working in Germany must pay income tax and social security contributions. However, it is possible to get around this. The most popular way is by taking a ‘mini job’ which pays less than Euro 450. For if you earn below Euro 450 per month, you are classified as having a mini job and do not have to pay any tax or social security contributions for health insurance. You can also choose not to make pension insurance payments if you wish. Other rules apply to employees earning more than this.

You can find out everything else you need to know on the website of the Deutsches Studentenwerk.

Bafög

 There are several possible ways of funding an extended stay in Germany. Students can apply for a Bafög grant: state-funded financial assistance for students designed to help them pay for their rent and personal needs. The amount received by the applicant will be based on several criteria, but will not exceed Euro 857 per month. Half of this money is a non-repayable advance, while the other half is a loan which must be repaid five years after the maximum period of funding. Foreigners can also apply for a Bafög loan, but only if they have a right of permanent residency or a settlement permit. More information is available here.

Insurance

There are a number of different types of insurance available in Germany. Some are a statutory requirement, while others are voluntary.

If you wish to register a vehicle (car or motorcycle) with a licensing authority in Germany, you must take out motor insurance for the vehicle. Otherwise, you will not be able to obtain a permit. In addition to statutory insurance, there are also many private policies available, of which an important example is personal third-party insurance.