Why entrepreneurs should have five bank accounts in Germany or: The problem of terminated German bank accounts

Contents

• Why having accounts at different banks is essential
• Sparkasse is the banking safety net you need
• 3 current accounts at 3 different banks is the bare minimum
• 2 instant access savings accounts
• What you should know about bank accounts in Germany
• Want to know more about bank accounts? 

Why having accounts at different banks is essential: A cautionary tale

Let’s imagine a scenario where the bank closes your business bank account, balances the outstanding claims on the private account and then promptly terminates the business relationship. Suddenly, you’re not only unable to make any transactions but are also having difficulties opening an account at a different bank. This may sound like an unbelievable story, however, for a business partner of mine, this was a reality.

The moral of the story? Every entrepreneur should not only have separate business and private accounts but also open accounts at different banks. Why go to such an extent you ask? Because in this case, my business partner maintained his only accounts at a single bank. And, when the bank decided to abruptly terminate its relationship with him, he was financially hamstrung. You can avoid this nightmare scenario by diversifying your bank accounts!

Opening accounts with multiple banks offers advantages such as the ability to keep a relationship with a bank strictly business. This means that the entrepreneur usually makes a better decision when applying for a business loan as the bank is unaware of his or her private transactions. Having different bank accounts at different banks also ensures that entrepreneurs can pay and act in crises for themselves and their families.

Sparkasse is the banking safety net your business needs

Each bank – except a Sparkasse (savings bank) – may terminate the Girovertrag (current account contract) with a business customer, without having to give a specific reason (judgment: OLG Bremen from 9.12.2011, Az. 2 U 20/11). Since a current account contract involves ‘services of a higher sort’ (ie business relationship), the contractor must be able to dissolve the account without stating reasons, judges have ruled. Therefore, entrepreneurs should always maintain a second bank account at a Sparkasse because they’re unable to simply terminate the current account contract according to their terms and conditions without having an objective reason (BGH, judgment from 11.3.2003, Az. XI ZR 403/01).

Three current accounts at three different banks is the basic requirement for a business person in Germany

As an entrepreneur, you should open the following accounts:

1. A business current account/Girokonto at a Sparkasse,
2. A second business Girokonto at a second bank.
3. A personal Girokonto at a third bank.

If you want to avoid bank fees for the personal account, transferring a fixed monthly wage (eg €1,500) to it usually does the trick.

But wait there’s more: Liquidity, interest and transparency with two instant-access savings accounts

The entrepreneur should also maintain two geschäftliches Tagesgeldkonto (instant access savings account). One of which is exclusively for tax returns (eg, value-added tax/Umsatzsteuer) and has the purpose of removing the temptation to spend money that needs to be paid to the tax office. In addition, he or she collects up to 2% interest (see www.tagesgeldvergleich.de) for the funds deposited in the account, in contrast to the current account/Girokonto.

The second instant access savings account should act as a capital buffer, ideally being enough to cover six months of current operating costs. Ensure that the instant access savings account is free, always credited and liquid.

Finale: Things you need to know about business bank accounts in Germany

#1: Although some entrepreneurs can handle all their business transactions via a private account, the tax office then treats the private account as a business account.

This is important to take into consideration as there is a mandated ten-year retention period for bank statements in Germany. In the case of a tax audit, the tax office would get to pry into an entrepreneur’s private finances, as not a single transaction may be blacked out.

#2: Entrepreneurs should always make sure they have their business account’s original bank statements (by post or from a Kontoauszugsdrucker– a statement printer ) and not just save them as a PDF file. This is because the printout of an electronic account statement on paper does not meet the retention requirements according to Article 147 of the AO (German tax code).

Note: Opening a business bank account is one of 22+ steps to set up a company in Germany.

About the author:

Marek Schwiesau is a Positionierungsberater (strategic positioning consultant) and Betriebswirt (business economist) with a focus on startup and corporate management, as well as a business lawyer. He has specialised in the positioning and loan financing of entrepreneurs for almost a decade.

Want to know more about German business bank accounts?

Banking:

Geschäftskonto: The bank account for GmbHs and UGs 
A comparison of online banks in Germany
Opening a business bank account in Germany:
Opening a German Bank Account as a Non-German Citizen

Master list of all articles on starting a company:

Master list: Company Formation

Checklist for setting up a company:

Opening a German business bank account is one of the 22 steps in the company formation process.

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