Which blocked account providers are accepted and secure for a (student) visa in Germany?

In a hurry? Here are the results in brief!  The complete list (including offline providers) and explanations of the comparison criteria and sorting can be found below. 

The market leader Fintiba performs best in our comparison. This is because Fintiba is the only provider to offer the blocked account at a German bank with German deposit protection. Fintiba is also the best provider overall in terms of expertise (years since launch, number of customers) and speed (instant blocking confirmation option via credit card; account activation) and one of the best in customer satisfaction.

If you want to study in Germany as an international student and you come from a non-EU country that requires a visa, you have to apply for a student visa or a student applicant visa. You must prove that you have sufficient financial means to cover your stay in Germany.
 

For this purpose, the blocked account is the generally accepted standard solution for proof of financial means and is - as a matter of fact - accepted by all (local exceptions may apply) German embassies (based on the General Administrative Regulation on the Residence Act of October 26, 2009, §16.0.8.1). Some foreign embassies, e.g., the German embassy in Colombia, even accept other proofs of financial means (such as the declaration of commitment) only in justified exceptional cases (source). 

In fact, the blocked account is the most convenient solution for German embassies abroad and for you because it is fast, secure, and binding. With other proofs of financing - such as the bank guarantee - the embassy has discretionary powers, which can lead to the rejection of your visa application. In addition, the opening of a blocked account can now be done quickly and easily digitally. Whereas in the past you had to visit the German mission abroad (embassy, consulate) in person to have your documents for opening a blocked account at Deutsche Bank certified in paper form, today you can open the account online in a few minutes.

The blocked account is one of the ways international students can prove that they have sufficient funds to cover their living expenses (including sufficient health insurance coverage) for a residence permit (visa) to study in Germany. The amount to be paid into the blocked account corresponds to the maximum BAföG funding rate (§§ 13 and 13a paragraph 1 BAföG).

The Federal Ministry of the Interior (BMI) set the legal requirements for this financial proof in the General Administrative Regulation on the Residence Act of October 26, 2009. It states: 

"16.0.8.1 The requirements are satisfied in particular (...) by the payment of a security deposit into a blocked account at a financial institution which is permitted to carry out banking transactions in the federal territory, from which only 1/12 of the deposited amount may be paid out each month; the blocked account must be set up in the name of the student and the blocking note must be entered in favor of the public-law regional authority to which the competent foreigners authority is to be attributed (...)"

 

Concerning the banking models of the various blocked account providers, the following aspects are important:  

1) Banking license in Germany: according to the administrative regulation, the blocked account must be set up with a financial institution that has a license to carry out banking transactions in Germany. 

→ The provider does not necessarily have to be a German bank - foreign banks also fulfill this requirement as long as they have a corresponding BaFin registration (see the BaFin database). In the case of non-European banks without a German banking license - such as Kotak Mahindra (India) - there is a risk that the foreigners authority in Germany will not recognize the account abroad as sufficient. 
 
2) Account opening in the student's name: According to the administrative regulation, the blocked account must be set up in the student's name. The so-called escrow models, where the account is set up in the name of a trustee, do not strictly comply with this requirement. 

→ In practice, this regulation is interpreted quite differently. In most cases, German embassies and immigration authorities do recognize escrow providers. However, there have been repeated cases in which the local immigration authority in Germany has not recognized a blocked account issued in the name of an escrow provider, citing the administrative regulation. 

We consider these factors in the list of providers by prioritizing providers with a banking license in Germany. At the same time, we would like to point out that most embassies and foreigners offices in Germany interpret the administrative regulation in favor of blocked account providers with an escrow model (including Coracle and Edubao) and also recognize them. We, therefore, list the companies among the accepted blocked account providers - even though rejections may occur in individual cases due to the administrative regulation quoted above.

Until the BAM! scandal came to light in the summer of 2021, the Federal Foreign Office published a list of providers on its website who, to its knowledge, offered blocked accounts throughout Germany.

The last published version of July 15, 2021 (source) looked like this:

According to various sources, the German financial supervisory authority BaFIN is conducting a review process of the individual blocked account providers. It is unclear when the review will be completed and with what result.

Despite that, numerous German embassies continue to name individual providers. However, these mentions should be treated with caution: The lists are consistently incomplete and do not represent a recommendation on the part of the embassy.

Anyone who has ever taken a look at the websites of blocked account providers will notice: that many provider claim to have the simplest, fastest, and best solution. 

However, in fact, providers differ considerably - especially in terms of how secure and transparent the blocked account solution is. From discussions with the respective providers and industry experts, we have identified the most important criteria that we consider essential for choosing the right provider.

Before you transfer more than 11,000 euros somewhere, you surely want to know where your blocked account will be, don't you? 

• Is it a bank in Germany (with German IBAN), or in Europe (with German IBAN), or in Europe (without German IBAN), or a bank outside of Europe?

• Is the account opened directly for you? Or are any foreign payment providers or lawyers interposed as trustees? 

• Is your money secured by the deposit protection there? Or do you have to hope that the worst-case scenario never happens?

These questions are really fundamental. It is all the more surprising how carelessly most providers deal with them - in terms of transparency. Even with large providers, you sometimes have to delve deep into the privacy policy, read the FAQ, or search around on some support pages to get an answer. And with some of them, the answer is not even clear.

Our tip: You can recognize trustworthy providers by the fact that they inform you transparently before registration about the bank where your blocked account will be, whether you will receive a German IBAN, and whether it is protected by deposit protection.

Conversely, it's not a good sign if you have to search for a long time to find this basic information!

There are two different banking models for the blocked account: 

RemitX (India) interposes a German law firm as a trustee (see the Terms & Conditions). 

All other blocked account providers with escrow accounts use one online payment service provider:

• Lemonway SAS (France) 

Although the escrow model is technically is a little bit more complicated than the model with a direct bank connection, it is also very secure. In the event of bank insolvency, your deposits are also protected by the deposit guarantee (up to 100,000 euros). 

• In the case of RemitX, the German deposit guarantee applies (source).
• In the case of Lemonway, the French deposit guarantee applies (source). 

If the trustee becomes bankrupt, the funds are also protected by so-called ring-fencing. This means that customer funds e.g. held by Lemonway are segregated in separate accounts at the banks. Here you can find more information about how Lemonway safeguards the funds.  

Anyone who entrusts their money to a bank does so in order to keep it safe there. However, many people forget: 

Banks can also go bankrupt or become victims of criminal acts. 

Germany has a very robust and regulated financial system, yet there have been a number of banks and payment service providers that have gone bankrupt here recently:

• 2021: Bankruptcy of Greensill Bank in Bremen (Germany)

• 2023: Bankruptcy of North Channel Bank (Mainz / Germany) 

• 2023: Bankruptcy of Neobank Ruuky (Hamburg /Germany), which acted as a payment service provider (so-called e-money agent) for a Belgian banking partner PPS EU SA.

Even major international banks can get into trouble:

• In March 2023, Silicon Valley Bank (USA) - the 16th largest bank in the United States - was closed by regulators.

• In the same month, Credit Suisse (Switzerland) - one of the 30 global system-relevant banks - had to be rescued by a purchase of UBS
  ("Credit Suisse: How Switzerland's flagship bank could fall so low?").

Even though bank bankruptcies are still very rare in Germany, it is reassuring to know that your money is safe. This is because your deposit is protected for up to 100,000 euros by the statutory deposit protection, which is mandatory for all banks.

There is a separate law for this (Deposit Guarantee Act), which also stipulates that everything is automatic in this case: 

• You will receive your money back no later than seven working days after the Federal Institute has determined that you are entitled to compensation.

• You do NOT have to apply to the deposit protection system for this. 

For more information on statutory deposit insurance at BaFIN.

The following comparable deposit insurance schemes exist in Europe:
 

• Within the European Union, the Deposit Guarantee Directive (Directive 2014/49/EU), which harmonized the requirements for national deposit guarantee schemes, applies.

• In the United Kingdom, the Financial Services Compensation Scheme (FSCS), a public-law compensation body, is responsible.

Further information on deposit insurance in the EU and worldwide can also be found at the Deposit Insurance Portal (in German).

In addition, there are at least a number of other criteria according to which providers differ.

The following list is intended to give students an overview of blocked account providers and make it easier for them to compare them based on objective criteria that we at MyGermanUniversity consider relevant. However, the question of which blocked account provider is the best must be answered individually by each student. We therefore encourage all readers to make their own judgment based on their personal preferences.

The market leader Fintiba performs best in our comparison. This is because Fintiba is the only provider to offer the blocked account at a German bank with German deposit protection. Fintiba is also the best provider overall in terms of expertise (years since launch, number of customers) and speed (instant blocking confirmation option via credit card; account activation) and one of the best in customer satisfaction.