Moving money between home and Germany and dealing with charges while you’re here can be a headache.  Whether it’s a frequent migraine or a minor, occasional annoyance will likely depend on who is paying your salary during your sabbatical year.  If you are being paid through your home institution or a non-German granting agency, you’ll have to spend more time figuring out foreign exchange and methods of payment.

Here is what I’ve learned during our sabbatical year, in which my spouse was paid by his home university:

You can’t rely on credit cards. 

My original thought was to pay for most of our daily expenses on our home credit cards, and then just pay them off each month out of our home bank account. This is how you get the best exchange rate, right? We got credit cards with no foreign exchange fee for just this reason.  We quickly learned that this wouldn’t work.

Germany is still very much a cash society.  Yes, Sweden may be trying to go cashless, but that will not happen in Germany any time soon.

Credit cards do not seem to be widely used or accepted in Germany, even in this day and age. Businesses that cater to tourists do accept them, but otherwise acceptance isn’t guaranteed. Even some hotels in Germany — those that cater mostly to German tourists — require payment in cash. Large retailers (the department stores, H&M, etc.) take them, but smaller stores, restaurants, and grocery stores can vary.

Many places that don’t take credit cards will take EC cards, which are debit cards for your German bank account.  Even that, however, is not a given, and you’ll find the occasional waiter who rolls his eyes when you get out the EC card. (One reason for that is likely that, unlike in North America, there seems to be no way to add a tip to the bill when you pay with a card. We asked and were told they weren’t allowed to round up.)

A good money transfer company is helpful.

Basically, I would recommend avoiding transfers through your bank. North American banks charge a fortune in international wire fees and exchange fees and any other fee they can possibly think up to tack on. Also, at least at our bank at home, the average teller doesn’t know how to do an international wire, so getting one done is a lengthly process that involves consulting manuals and managers, and you can’t do them online.

There are a number of foreign exchange services you can use that will (mostly) give you a better exchange rate and can usually move the money more easily. Below is a survey of companies that I have used or that other expats in Germany have recommended.

To compare them, I looked at the cost of sending €1000 from the United States to Germany on 23 June 2016.

Provider Rate Fee Total Cost
Market rate 0.8818 $1134.04
XE Trade 0.8749 $0 $1143.00
TransferWise 0.8820 $11.34 $1145.19
WorldRemit 0.8700 $3.99 $1159.22
PayPal 0.8625 $0 $1159.48
Xoom 0.8617 $4.991 $1165.49
Western Union 0.8333 $02 $1200.00

I would note a couple of things:

  1. Xoom only seems to work for U.S. residents, as they require payment from a bank account or credit card at a U.S. bank. Even though I could register as a Canadian resident, their site would only show exchanges from USD into other currencies.
  2. TransferWise isn’t all that intuitive for trying to buy a set amount of Euros.  For example, I know I need a certain number of Euros each pay period.  I need the provider to calculate the amount of CAD I’ll need to transfer.  TransferWise will only allow me to put in the amount of CAD I want to transfer, so I have to fiddle with that amount until it equals the amount of EUR I need to receive.
  3. All of these providers take between a day and five business days to send payment.  PayPal is probably the fastest, because they just send an email to you that you have money, and then you have to work through PayPal to transfer to your European bank. Western Union is the slowest:  They claim a transfer paid from a bank account will take 5 business days.  With XE Trade, if I place an order and do a bill pay to them from my Canadian bank by 8 a.m. CET or so, they will wire my money to my German account by late that afternoon.  It takes longer from a U.S. bank account because of the peculiarities of the U.S. banking system.
  4. There are other providers that are more traditional FX companies.  Some that I have experience with or that other expats have mentioned are WorldFirst and Currencies Direct.  The advantage to these companies is that they assign you a trader, so if you want a person to contact regarding your transfers you’ll have one.  The disadvantage is that they may require you to wire your payment to them (which is expensive).  I used WorldFirst only once because they are difficult to use in Canada.3  Currencies Direct doesn’t operate in every U.S. state (they aren’t licensed for Washington, for example), so if you’re from the U.S. you may or may not be able to use them.
  5. Overall, it’s important to figure out how easy it is to get money to the foreign exchange company.  In Canada, online bill pay from your bank and direct debit from your account should be available, though some FX companies will require a wire and that adds cost.  In the United States, usually the provider will need to set up direct debit from your account, which can take a few extra days on the first payment.

Postscript, 13 July:  I was asked in the comments to compare Revolut, so I took a look at them.  They seem to be almost exactly at the market rate, but they have a few quirks that seem to make them an iffy option for Germany.  They permit money exchanges and bank withdrawals, but it appears only between GBP, EUR and USD.  (And who knows what’ll happen to the EUR when Brexit happens?) Thus, exchanges aren’t an option for the Canadians (or Aussies, or Kiwis, or many other nations) among us. Their main option seems to be a credit card that you can use in 90 currencies, which would be a great option in a country where credit cards were routinely accepted.4 In Germany, however, Revolut fares the same as my no-FX credit card: Basically unhelpful. And at least I can pay my credit card from a Canadian account with no trouble or fees.

Banking within Germany is much simpler.

Once you have moved in and registered at your address, you’ll be able to open a German bank account.  The main banks, at least in our area, are Deutsche Bank, Commerzbank, Hypovereinsbank, and Sparkasse.  These have the largest number of ATMs around the country.

With an open account, you can pay your bills by money transfer.  With the account you may also want to get an EC card, which is a debit card but also has a stored value chip in it.  You can add money to the stored value chip at any ATM.  Transit companies (and I think some parking meters) seem to be the ones who still use the stored value chip; I didn’t see it used much elsewhere.

We didn’t get a credit card, but you can also get one through your bank if you like.  You will probably need a Schufa (German credit rating agency) score to get approved, though.


1 If you choose to pay by credit or debit card, the fee is $58.99.
2 If you want your payment to be delivered next day and/or want to pay by credit card, Western Union will charge a $48 fee.
3 WorldFirst claims to offer services in Canada. However, they do not have a Canadian office, and the Canadian bank account they give you to wire your payment to is an intermediary bank account that pays into a U.S. account. Our bank considered the wire to be an international wire, not a domestic one, despite the intermediary account, and charged us a high international wire fee. It also took the better part of a week for World First to acknowledge receipt of the wire and process the foreign exchange.
4 I assume they’re making their money off interchange, because otherwise I can’t figure out their business model — no margin, no major fees.

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