Finance and Insurance
Moving to another country probably means, to change your currency as well. Here you can find out how financial life works in Biberach.
Foreign currency exchange
In Biberach, you can exchange your cash from abroad into Euro at all banks. Fees and exchange rates vary from bank to bank. It is therefore a good idea to contact a local advisor to determine the current exchange rate.
This webpage includes a list of all banks in Biberach.
When you move to Germany, you will need a German bank account, which is called a “Girokonto” (checking account). Your employer electronically transfers your salary here, and you also use this account to conveniently pay your rent and go shopping at the supermarket.
Before you open an account in Germany, however, you should check which bank and account best suit your needs. For example, you can choose a local bank or a dedicated online bank, depending on how often and where you want to withdraw cash or transfer money abroad.
“Sparkasse” and “Volksbank” locations are actual physical banks that you typically find in small towns and villages.
Other banks, on the other hand, are dedicated online institutions. Although online banks provide a comprehensive range of online services, they do not maintain any “brick-and-mortar” locations, which means they cannot offer you a personal advisor.
Opening an account
There is no legislation that defines a specific set of requirements that must be met to open a checking account in Germany. Experience, however, shows that the majority of banks want you to fulfill the following five items:
- You must be of age
- You must have a regular income
- You must have a good credit rating
- You must not have any outstanding claims against you
- You must have your permanent residence in Germany
This means that you typically can only open up a German bank account after you have formally registered here (see Arriving -> Registration). Until this time, your foreign bank account will suffice.
Credit cards are not as important in Germany as they are in other countries. Those from the USA, for example, will be surprised at how rarely Germans actually use their credit cards. Nevertheless, it is normal and also advisable to have a credit card on your person. The most common credit cards are VISA and MasterCard.
Everyday payments in Germany are typically settled with cash or the so-called “Girocard”, which is a debit card. The latter is linked to your bank account/checking account. Since the Girocard can be used to withdraw cash and pay for items almost anywhere free of charge, Germans rarely need their credit card. Credit cards are still used, however, and typically cover payments and cash withdrawals abroad as well as when booking flights, rental cars or hotels.
You are normally provided with a credit card when opening an account, but of course you can also apply for one later on. However, banks often require a minimum monthly income to issue a credit card.
Germans love security. Yet not everything can be planned. To successfully face the twists and turns of life, various different insurance policies are available in Germany that provide financial support in the event of an emergency. While some of these policies are mandated by law, others can be taken out voluntarily.
Anyone actively employed in Germany who earns above the defined minimum income level is automatically insured against certain risks. The contributions made to these insurance policies are typically shared equally by the employee and employer.
Statutory health insurance
No matter how healthy we think we are, we all get sick at some point. Most of the time it’s just a harmless cold that goes away after a few days. Sometimes, however, things are worse and we have to go to the doctor or even to hospital.
To ensure that you are not burdened with medical costs at this time, health insurance is compulsory for everyone living in Germany. It covers the cost of treatment so that you do not have to worry about anything but getting better. Whether you are employed, work as a freelancer or are unemployed, whether you are a child or adult, old or young ─ absolutely everyone has health insurance.
The vast majority of employees are insured by way of statutory health insurance. Half of this insurance is paid by the employee, and the other half by the employer. Your part of the contribution is deducted automatically from your gross salary. The different health insurance funds can also levy an additional contribution made. This contribution is likewise shared by the employer and employee (50:50).
Statutory long-term care insurance
Statutory long-term care insurance covers part of the costs incurred if you ever need long-term care. It will reimburse the costs for care personnel but not for food or accommodations.
Contributions to statutory long-term care insurance are also deducted automatically from your salary and shared between you and your employer. If you are over a certain age and do not have any children, you will need to make an additional contribution. Your employer does not get involved.
Statutory accident insurance
Accident insurance is the only compulsory insurance paid by the employer alone. There are therefore no costs that you incur.
Accident insurance provides benefits in various different scenarios. You can receive a monthly replacement salary through the accident insurance provider if you no longer are able to pursue your job due to a work-related accident. Payment for additional medical expenses or treatment in a rehab clinic also form part of the benefits package provided by statutory accident insurance.
Statutory accident insurance only protects you while you are physically at work or are on your way to it, however. If you also want to be covered during non-working hours, you will need to take out an additional private accident insurance policy.
Statutory pension insurance
People who have worked their entire life also want to continue enjoying it as they get older. This is where statutory pension insurance comes in, whereby employees actively accumulate a monthly pension over decades, which is then paid back to them for the rest of their lives following retirement.
Contributions to statutory pension insurance are also paid by you and your employer (50:50).
Statutory unemployment insurance
Unemployment insurance makes up the last of the five compulsory insurance schemes for employees in Germany. It ensures that part of the last net salary is still paid following termination.
Unemployment insurance is funded by you paying half of the contributions and your employer paying the other half. Your part is deducted directly from your gross salary as with the other compulsory insurances.
Motor vehicle liability insurance
Motor vehicle liability insurance is also a compulsory insurance as without it, you are not legally permitted to drive your car, motorbike, etc. on Germany’s roads. This insurance is not financed with your gross salary, however, and is therefore not contributed to by your employer.
You can freely choose the insurance provider you want. The amount on the insurance premium will depend on various criteria, including: The vehicle, age of the drivers, how many people will be driving the vehicle, how many claims you have had in the past, annual mileage, where the vehicle will be parked, etc.
You can also take out partial and/or comprehensive insurance. Partial insurance generally covers any damage caused by a fire, theft, storm, hail, lightning, glass breakage or animal bites. Comprehensive insurance, on the other hand, covers damage caused to the vehicle, in particular by accidents caused by the driver or malicious damage inflicted by third parties.
In addition to the risks that you are required to be insured against in Germany, there is a wide range of voluntary insurance plans available. The most important permits are explained here.
If you have accidentally damaged something or even harmed an individual, you must compensate for the damage caused. For example, you may step on someone’s backpack on a bus and inadvertently break their mobile phone as a result. Or maybe you cross a road without looking and cause an accident as a result.
The amount of damage can vary, depending on the incident involved. No matter the extent of the damage ─ you are required to pay for it. To prevent such unfortunate incidents from costing you your income for the next few years, liability insurance can step in for you. It will pay for the damage and typically also covers your family’s mishaps, provided that you all live under the same roof.
Household contents insurance
Household contents insurance protects your belongings. Depending on the scope of the insurance coverage, a household contents insurance policy will replace your furnishings if a sudden, unexpected thunderstorm causes water to enter into your home or apartment, for example. The same also applies if a fire breaks out or your bicycle is stolen from the cellar.
Occupational disability insurance
Employees are automatically insured against loss of income should a long-term illness arise. This state-funded insurance only provides basic protection, however. Those who are unable to work for an extended period as a result of an illness or accident only receive a small portion of their former gross salary from the state (reduced earning capacity pension).
As this reduced pension is more often than not insufficient to continue life as usual, you can “fill in the gap” with a voluntary occupational disability insurance plan. This involves deciding for yourself what additional monthly amount you want to receive in the event of a benefit payout. The premium for this insurance is based on the amount of this monthly payment, your age and state of health.
Term life insurance
Term life insurance offers basic coverage for your family. It protects the surviving members should one income or the main income of the family cease to exist.
Let’s assume that you are the primary earner in your family. Should you suddenly die, your family would be quickly faced with major financial problems. Term life insurance addresses this problem by paying out a pre-arranged sum to your family in the unfortunate event of your death