Deutsche Bank stops blocked account service for German visa – background, facts, and alternative options for international students
For years a blocked account with Deutsche Bank was the first German bank account internationals students came across on their way to Germany. Almost everyone who had to prove sufficient financial means to the German government entered Germany via the opening process of the most international German bank – and got a first impression of German bureaucracy. With the launch of our online blocked account solution in 2017, Fintiba was the first company to digitise and thus revolutionise this previously manual and time-consuming process.
Already in January 2020, Deutsche Bank China announced to stop accepting applications for opening blocked accounts in China; two and half years later, as of 1 July 2022, Deutsche Bank Germany decided to completely stop its global blocked account service.
This article gives an analysis of the background and history of Deutsche Bank’s blocked account service and provides alternative solutions for internationals who plan to move to Germany and for Deutsche Bank clients who need to extend blocked accounts.
What is a blocked account?
As “Proof of financial resources”, a blocked account (Sperrkonto) is a special account that is – in most cases – necessary for the entry visa application in Germany and a requirement when applying for a residence permit.
International students, au-pair, language students or job seekers from non-EU member states must prove that they have the financial resources to pay for their course of studies as well as for daily living expenses during the time of their stay in Germany. The most popular option to provide this proof is the so-called blocked account. The name derives from the fact that the funds are not freely accessible by the account holder upon the opening of the account. The blocked amount is released and paid to the account holder on a monthly basis upon visa start and activation of the account in Germany.
The required blocked amount for a student visa application is pegged to the BAföG rate, a state funding for students in Germany.
German authorities have announced to increase the BAföG rate once more from € 861.00 to € 934.00, which means international students will be required to block a total amount of € 11,208.00 per year for their stay in Germany instead of the current amount of € 10,332.00.
For more information, please click here to check our blog article.
Facts of blocked account opening process with Deutsche Bank
As a renowned and fully licensed German bank with thousands of branches worldwide, Deutsche Bank used to be one of the most important blocked account providers for internationals coming to Germany. According to the data given by Deutsche Bank on March 31, 2022, it has 1,669 branches worldwide covering the Asia Pacific region, Central Europe, Eastern Europe, and Latin America. Therefore, internationals from around 74 countries used to be able to open blocked accounts in their home countries with Deutsche Bank. This breadth of coverage surpasses other German banks that only offer the opening of blocked accounts in Germany.
Thanks to the worldwide presence Deutsche Bank for a long time was the only German bank able to offer an international product such as the blocked account. However traditional account opening processes with the need to send paper documents via express mail around the globe always meant long waiting times for applicants – representing a challenge for Germany as a study destination. At the same time, offline processes were costly and led to a premium price of € 150 plus a € 6.90 monthly fee.
With the FinTech revolution, things changed. Digitisation allowed new competitors to offer superior value and convenience by providing digital blocked accounts that are fully focused on international clients and their needs.
Fintiba, market leader in digital blocked accounts with a German bank infrastructure
In 2017, Fintiba as the now incumbent digital blocked account provider entered the market and soon became the market leader in this niche. Fintiba developed an innovative, fully German digital blocked account solution together with Sutor Bank — a fully licensed bank in Germany since 1921. German regulatory requirements for banks that guarantee the highest level of security, such as (anti-) money laundering checks, IT and other risk management, Know-Your-Customer principles, etc. also apply to Fintiba’s partner Sutor Bank and also to Fintiba itself.
Details on the set-up and more background information on Fintiba’s blocked account can be found in our blog article: Bank security – what does it mean and what to consider when choosing your blocked account provider?
Besides blocked accounts, Fintiba offers students the health insurance necessary for the visa application and enrolment at the university to ease the journey to Germany. In the Fintiba Plus package, these two offers are bundled into an integrated package – that includes free travel health insurance. Students can easily order the products via the website or native app.
With more than 150.000 customers from over 190 countries, Fintiba has established itself as a leader in the market for assisting internationals on their way to Germany. Accepted by all German authorities worldwide and combining technology with personalised support tailored to international and cultural expectations, Fintiba in cooperation with Sutor Bank became the new “German bank” for internationals on their way to Germany.
For more information, please visit the Fintiba official website or follow us on social media.