- Does a Free German Blocked Account exist?
- How to avoid fees?
- Blocked Account with no opening fees
- Blocked Account with no monthly fees
- Blocked Account with no opening and no monthly fees
- Fees as just one of the criteria
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You might be aware of the fact that you cannot get a German student visa if you do not demonstrate the availability of sufficient funds. And the blocked account is one of the ways of doing that.
If you are thinking of using this option for the proof of funds, you might have asked yourself: Is there any chance to avoid the fees related to the blocked account issue? If that is the case, then you are at the right place!
It is our goal to inform you honestly and accurately, therefore, we need to add disclaimers:
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You should use this text as a general guide, but it cannot be a legal consultation. The visa regulations are made and executed by the Federal Foreign Office (Auswärtiges Amt), Federal Ministry of the Interior (BMI), and the local Foreigners’ Offices (Ausländerbehörde). Please be aware: Some rules and procedures can vary from embassy/consulate to embassy/consulate (even within one country), and from Ausländerbehörde to Ausländerbehörde in Germany. That is why we highly recommend you also consult the German representation abroad near you, and the local Foreigners’ Office in Germany (which Ausländerbehörde is responsible for you depends on your residence in Germany) for information that applies to your case.
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We try our best to provide you with the latest information possible. However, for the most up-to-date information regarding all kinds of facts and regulations regarding the blocked account providers, always refer to their homepages.
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We partner with the following blocked account providers: Fintiba, ICICI Bank, Care Concept. The relevant links 💰 in this article are so-called affiliate links (you can easily recognize them by the 💰 symbol following). We receive a small commission when someone clicks on the link and makes a purchase. However, this does not result in any additional costs for the customer.
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This article was last updated on February 22, 2024. We cannot guarantee that the discounts are still active or exclude that other service providers might also have special campaigns that we do not know about.
More info about the blocked account
Go to Fintiba 💰💰 = We receive a small commission for Fintiba products sold through this link. However, this does not result in any additional costs for the customer.
Does a Free German Blocked Account exist?
First of all, let us start with the following emphasis: having a German Blocked Account is usually not free. In other words, international students who need a blocked account for their German student visa application need to budget a certain amount of money for that purpose. While the blocked amount is fixed, fees and buffer amounts do vary from provider to provider.
As of February 2024, the amount of money that students need to put on their blocked accounts with the aim of proving their finances equals €934 per month, which is €11 208 per year. This is something students cannot avoid (as long as they do not provide the proof of finances through alternative ways). However, what they often can avoid is, for example, paying for opening or maintaining the blocked account. Thus, although there is usually no such thing as a free blocked account in Germany, it is frequently possible to avoid at least one of the basic fees (either a set-up fee or a monthly fee) associated with the blocked account.
How to avoid the Blocked Account fees?
So, as we have already established, it is often possible to either open a blocked account for free or to maintain it for free. Thus, in general, entirely avoiding all of the blocked account fees is usually a no-go. Although, some providers might, once in a while, have this offer too.
In order to find out which of the fees you can avoid, you need to undertake the following two steps:
1
Inform yourself about the existing German blocked account providers.
2
Check out (regularly) the offer of each provider.
Regarding the second point, you might be asking yourself: "why should I regularly check the offers?". The answer is simple: from time to time, some of the providers have special offers, as a result of which you might, for instance, partially (or even fully) avoid blocked account fees.
For example, Fintiba 💰, the market leader as far as the German blocked account is concerned, frequently offers students to open a blocked account for free. For instance, in spring-summer 2023, Fintiba offered a free set-up option twice: in May and August, students could save up to €184 by opening the Fintiba blocked account for free.
To learn more about Fintiba, click here.
Free Option 1: Blocked Account with no opening fees
It is noteworthy that Fintiba is not the only blocked account provider that (from time to time) offers the possibility of opening a blocked account for free. Among other providers that also present the clients with this opportunity are, for instance, Expatrio and Kotak Mahindra. In Table 1, you can find the usual fees of these providers.
|
Country |
Availability |
Type of service |
Banking Model |
German Deposit Protection |
Set up fee |
Monthly fee |
|
|
Fintiba |
🇩🇪 |
🌎* |
Online |
German Partner Bank |
✅ (Germany) |
||
|
Expatrio |
🇩🇪 |
🌎* incl. USA |
Online |
Belgian partner bank with German branch |
✅ (Belgium) |
||
|
Kotak Mahindra |
🇮🇳 |
Only India |
Online |
Own British bank with German branch | ✅ (Germany) |
** |
* There may be exceptions for individual countries (e.g. high-risk countries).
** Kotak Mahindra charges a fee per transaction.
The sorting within the list comes from the following criteria (in the order mentioned):
- banking model
- Direct Bank integration (with German banks vs. other European banks vs. Non-European banks)
- Escrow Model (Payment Service Provider vs. Personal Model)
- availability (worldwide vs. only specific countries)
- total number of customers
- and provider name (A-Z).
The sorting criteria are explained and justified in more detail below:
1) Banking model (direct banking integration vs. escrow model): In the direct banking model, the blocked account is opened in the customer's name at a bank without anyone else in between - whereas, in the escrow model, the account is opened in the name of a third party (the so-called trustee). The direct banking model is, therefore, much easier for customers to understand than the escrow model because fewer parties are involved. The protection mechanism is also easier to understand: in the case of a direct banking model, the deposit guarantee takes effect, while in the escrow model (as in the case of the French deposit guarantee) two different mechanisms come into play depending on the scenario: in the event of the trustee's insolvency, ringfencing (segregated accounts) takes effect and only in the event of the bank's insolvency does the deposit guarantee take effect. The fact that both models are very secure is unaffected by this.
The direct banking model fully complies with the General Administrative Regulation on the Residence Act of October 26, 2009 by the Federal Ministry of the Interior (BMI) since the account is set up in the name of the student and at a financial institution which is permitted to carry out banking services in the federal German territory. In the escrow model, where the account is set up in the name of a trustee and not in the name of a student and opened with a payment-service-provider instead of a financial institution which is permitted to carry out banking services in the federal German territory, does not strictly comply with this requirement - but is also accepted in most of the cases.
The sorting within providers with a direct banking model is as follows:
We list providers that have a partner bank with a European banking license before providers with a partner bank that does not fall under European regulation. This is due to the fact that banks in Europe are subject to a harmonized deposit protection scheme (100,000 euros). Non-European banks that do NOT have a banking license for Germany (e.g. Kotak Mahindra) are listed only after the escrow models - since they do not comply with the General Administrative Regulation on the Residence Act of October 26, 2009.
2) Availability (worldwide vs. only in a certain country): We list providers who generally offer their blocked accounts worldwide (although individual countries may be excluded) before those providers who are only available for certain countries.
3) Number of customers: We sort providers with the same direct banking or escrow model according to their total number of customers (i.e. total blocked accounts opened since their foundation) published on their website. Providers who do not publish any information on this are ranked behind those who provide figures.
4) Name of the provider (A-Z): In the case of equality in the above criteria, providers are sorted alphabetically.
Free Option 2: Blocked Account with no monthly fees
If, for some reason, it is not possible for you to avoid the opening fees, you might still be able to bypass the monthly fees. This is doable if, for example, you go for those blocked account providers that do not charge regular monthly fees. That could be, for instance, ICICI and Coracle. Table 2 demonstrates the standard fees that these providers charge from their clients.
|
Country |
Availability |
Type of service |
Banking Model |
German Deposit Protection |
Set up fee |
Monthly fee |
|
|
ICICI |
🇮🇳 |
Only India |
Online |
Own British bank with German branch |
✅ (Germany) |
150 EUR 💰 |
0 EUR 💰 |
|
Coracle |
🇩🇪 |
🌎* |
Online |
Escrow model with payment service provider in France |
✅ (France) |
* There may be exceptions for individual countries (e.g. high-risk countries).
The sorting within the list comes from the following criteria (in the order mentioned):
- banking model
- Direct Bank integration (with German banks vs. other European banks vs. Non-European banks)
- Escrow Model (Payment Service Provider vs. Personal Model)
- availability (worldwide vs. only specific countries)
- total number of customers
- and provider name (A-Z).
The sorting criteria are explained and justified in more detail below:
1) Banking model (direct banking integration vs. escrow model): In the direct banking model, the blocked account is opened in the customer's name at a bank without anyone else in between - whereas, in the escrow model, the account is opened in the name of a third party (the so-called trustee). The direct banking model is, therefore, much easier for customers to understand than the escrow model because fewer parties are involved. The protection mechanism is also easier to understand: in the case of a direct banking model, the deposit guarantee takes effect, while in the escrow model (as in the case of the French deposit guarantee) two different mechanisms come into play depending on the scenario: in the event of the trustee's insolvency, ringfencing (segregated accounts) takes effect and only in the event of the bank's insolvency does the deposit guarantee take effect. The fact that both models are very secure is unaffected by this.
The direct banking model fully complies with the General Administrative Regulation on the Residence Act of October 26, 2009 by the Federal Ministry of the Interior (BMI) since the account is set up in the name of the student and at a financial institution which is permitted to carry out banking services in the federal German territory. In the escrow model, where the account is set up in the name of a trustee and not in the name of a student and opened with a payment-service-provider instead of a financial institution which is permitted to carry out banking services in the federal German territory, does not strictly comply with this requirement - but is also accepted in most of the cases.
The sorting within providers with a direct banking model is as follows:
We list providers that have a partner bank with a European banking license before providers with a partner bank that does not fall under European regulation. This is due to the fact that banks in Europe are subject to a harmonized deposit protection scheme (100,000 euros). Non-European banks that do NOT have a banking license for Germany (e.g. Kotak Mahindra) are listed only after the escrow models - since they do not comply with the General Administrative Regulation on the Residence Act of October 26, 2009.
2) Availability (worldwide vs. only in a certain country): We list providers who generally offer their blocked accounts worldwide (although individual countries may be excluded) before those providers who are only available for certain countries.
3) Number of customers: We sort providers with the same direct banking or escrow model according to their total number of customers (i.e. total blocked accounts opened since their foundation) published on their website. Providers who do not publish any information on this are ranked behind those who provide figures.
4) Name of the provider (A-Z): In the case of equality in the above criteria, providers are sorted alphabetically.
Free Option 3: Blocked Account with no opening and no monthly fees
As already mentioned, in fairly rare cases, the blocked account providers might also have a special offer, giving students a chance to avoid both set-up and monthly fees. For instance, this was a case with Expatrio in July-October 2023.
Blocked Account Fees as just one of the criteria
Do not overestimate the importance of fees!
In general, the difference in fees is not significant across the providers. Hence, it should not be the sole decisive factor when choosing the blocked account provider. The overall amount of money that is involved in this process is quite a significant sum, that's why you should take your time and find out answers to questions like:
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Am I eligible to open a blocked account with the given Blocked Account provider? For example, not all of the providers offer a service for minors. Also, some providers cannot offer a service to students from particular countries, while others may be just for students from specific countries.
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Which blocked account provider promises more safety for my money? Here, inspect the banking model and check for deposit protection.
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How reliable is the blocked account provider? How experienced is it? For instance, pay attention to the number of students who have already opened an account with the provider. Also, for example, check the recent reviews on Trustpilot and Google.
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How easy is it to open a blocked account with the given Blocked Account provider? Research what are the documents that the provider requires (aka assess the level of bureaucracy), and how quickly you can open an account and receive the blocking confirmation.
After answering these questions, you can combine the acquired information with the details regarding the pricing, and then you will be able to make quite an informed decision and choose the right provider that is suitable to you based on your preferences.
To find answers to these and other important questions, check out this article, which will help you to choose the right provider for you.
Summary Box
Usually, blocked account is not available for free. However, students can often make a good use of offers to bypass blocked account opening or monthly fees. Moreover, although it is not that frequent, blocked account providers might also have a special offer of a free blocked account, with no set up and monthly fees.
And remember: be careful when choosing the blocked account provider. Do not take into account only fees, but also some other key aspects, to make sure that you are making the right decision that fits your priorities.
