Closing a bank account and transfering the balance

Hi

I just wanted to share my experience with a bank here in Germany.

We have moved to Canada and went to the bank before we moved to close our accounts and TT the money over to Canada. To our unpleasant surprise, we were told that it is German law that a charge of 1% be imposed on our funds for closing the account pls TT charges. Another 0.25% will be charged if we do not give 3 months notice. The total amount for the 1% charged would be equivalent to a month's salary!

Having lived in many countries, I find this ridiculous and uncalled for. Our personal banker did NOT tell us this when we opened the account. She just said it was in the bank documents, which were in German. No where else does this happen, well, not that I know of.

So, heads up all expatriates!

I only had experience of closing one bank here when my wife & I set up a joint account.
It took them a long time (months) to do this - so its a wise precaution to almost empty it first.

When you say you were closing - were you asking them to transfer the residue to another country?

I closed my girlfriend's account at Hypovereinsbank. They closed it that day with no charge.

German law that they charge all that? That surprises me. I closed my current account at Dresdner and they charged a minimal fixed fee.

They charge you for closing an account ? wow...

I knew they charged for closing an account, but blimey!

I still have an account at the Sparkasse Regensburg to the best of my knowledge. Must have had a couple of Marks in it back in '91. In another couple of million years I could be rich - as long as I don't close it.

Many saving accounts have restrictions or penalties on early withdrawal. You earn higher interest by having them retain financial stability by keeping your money for a longer period, but suffer if you need the money back in a hurry. I'm sure there is a process whereby you can have all your money back without charge or interest penalty, but you will need to wait. It's the same for loans. I can't deny, however that German banks are more anal than most about maintaining long terms savings and loans even for smaller amounts in the interests of (their own) financial stability, but much of this has been reinforced in supporting fiscal law. It's not unusual in other countries - many UK Building Societies lock larger amounts in with 3 months or more minimum notice or penalise you for early withdrawal. On a 4% account that's a £1000 (on in other words 1% - do you recognise this number?) penalty for withdrawing £100,000 without giving the required 3 months notice.

In Italy they charge you an arm and a leg to close a saving account.

Transfer the money, leave the account empty and send them a letter from Canada. What they gonna do? Send a bill?

What bank was it?

No, they are going to send the money less charges and penalties. You think a bell doesn't ring in the bank when someone tries to move money out of a restricted account?

Hi,

Just to clarify, it was with Hypovereinsbank.

Apparently, we were given a 3 year package and were gonna be charged 0.25% when we closed it, which I thought was quite fair since we only had it a year.

Allegedly, the 1% charge (supposedly imposed by the Govt for closing the account AND transferrring it out of the country) is standard). If you close it and the money goes to another local bank etc, it is not charged. If it goes out of the country, they will charge you. We closed out account with Postbank to go to HVB and there were no charges involved either.

Moreover, we were only allowed to withdraw €2000 per month from each account (we had 3) and anything more than that is charged the 1%, including when we need to transfer the money from the savings account to the current account. Again, this was not relayed to us when we opened the account. Hence, we could not withdraw any funds to save on charges before we closed the account!

In fact, we even told the account manager that we wanted a flexibile account as we needed to move funds around freely and yet she gave us these kind of accounts.

They have now messed up my TT to Canada and I still have not received my funds. Upon checking, they said there was a glitch in the system and it did not happen. They did not monitor it nor did they follow up on it till I checked and informed them. Such bad service.

Apparently, they used the excuse that they did not understand English well. I mean, come on...what is so difficult about "Please close my accounts an transfer all funds to my Canadian bank account! I think even a teenager can understand that. Stupid lame excuses.

It is at times like this that I am so glad I am out of that country.

The total amount for the 1% charged would be equivalent to a month's salary!

...bloody hell ur loaded.

Exactly what I was thinking.
You can affort to pay some kind of financial/legal whiz to sort this out for you.

This €2000 per month sounds to me as if you had a savings account and not a normal bank account.

Well, it is equivalent to one month's nett salary, hence the fuss. We do not want to pursue the matter any further but would like to warn other expats. I think it is just a waste of time and effort, doing it in Germany.

Yes, HEM, we had a package of current and savings account linked together. Hence, I do not understand why theyy had to charge us to transfer within these 2 accounts. I have never heard of any bank doing this where we have lived before (which is a lot of various countries in Europe, Asia and Australasia). Even Canada does not do this, I just checked with my bank.

Or extremely badly paid!
This practice of only alowing you to withdraw a relatively small amount without 3 months notice is pretty crappy, but I'm surprised they didn't tell you. It sounds like you signed up for something without asking the right questions. I got fed up with the 3 month rule and opened a savings account with ING Direct which allows you to get your money anytime you want and pays a pretty good interest rate, for Euroland that is.

Well, I believe it is the bank's responsibility to tell us about all the charges we were to incur. Moreover, we told her we wanted an account which allows flexibility and free movement of funds as and when required. That is plain and clear enough for her to know those accounts would not work for us.

She did tell us all the interests we would get without asking about it but not the bank costs. I think it is just plain poor customer service and management, having been in the banking industry as a manager for 8 years. Germany should be renown for its poor customer service by now.

Anyway, as I said, I just wanted to warn others, not to pursue the matter further.

I have accounts with Postbank and enquired about this today. Postbank has NO fee for closing an account and can be done in the Postbank immediately.

(Sarah- sorry about your hassles. Hope you are enjoying Canada!)

When I really got messed around by Postbank way back I went down to couple of DM in the account and then tried to pass them my card over the counter which they refused so I put it in their letter box. They tried to get me to pay to close the account. I refused and they reported me to the SCHUFA. I explained to SCHUFA what happenend and I've got credit since.

I think as YL6 says for large sums of money this is fairly standard - and in other countries too.

Hi all,

I have an Volksbank account in Zuffenhausen (Stuttgart area) and will need to move the money/close the account when returning to Canada in June. It is a Gehalts- Lohn- Rentenkonten. Any advice on the best way to do this? I would like to avoid closing fees and ridiculous charges on transferring money to Canada.

When we left Canada to come here, we just withdrew funds from our Cdn account on a certified cheque and deposited into our German account (minus their crazy fees for "Auslander" cheques--20E per). I'm wondering if Volksbank has closing fees and what the best approach would be. For example, it is better to try to empty the account with a transfer, or by certified cheque...etc.

Thanks for your input. Much appreciated!

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Err - ask them? Look at their web site?

there will be fees, and fees for the transfer, when I left Germany for Canada about 10 years ago, I waited for my last cheque to go in, then sent them a letter with my Canadian bank info and my bank cards (cut up) so they could transfer the money, forget what the fees were, but wasn't more than 50dollars.

In a Stiftung Warentest issue last year I read that closing fees for bank accounts are illegal. I tried finding the article for you but can't (and the magazines are at my parents' house), but anyway, you should be able to close the account for free.
If you already have an account to transfer the money to, I would try a wire transfer.

Have a look here about the pitfalls: closing a bank account

...that may be a smokescreen since it turns out they were closing a savings contract before it ran its course. Not a normal (giro) bank account.

If it's a regular Girokonto they can't charge you anything for closing it. They can't charge you for transfering the entire sum to another German bank nor for handing you the cash (although they can require up to three days' notice so that they can have enough cash on hand).

Closing other accounts will depend on the type of account and the contract. If you have a set or minimum term, then fees may apply and/or you may lose the current year's accrued interest.

Transferring your cash anywhere outside the country is another matter. You're going to get raped. Hard. The best way around this is to open up a Citibank account here. Then open one back home in Soviet Canuckistan. You can pull the money from the German account in CAD and then deposit it at home, subject to a max of around €1500/wk. No charges and normally the interbank exchange rate (closest to true exchange rate).

woof.

Did ask them, but don't trust 'em. They said 20E for an electronic transfer to Canada, a 0.25% Courtage fee on the balance, the outstanding posting fees (EC card transactions, printing of statements), as well as a 1,5% ' per mil" fee? My "bank" German is limited so I did not understand completely and I've read horror stories here about 3 months notice, closing and transfer fees, etc.

Thanks for your comments and suggestions so far all. Thanks for the tip on Citibank BadDoggie--I'll check into what they offer that makes this a good option.

Both Stadtsparkasse and Hypovereinsbank have relatively low interest rates. For instance, Stadsparkasse's rate is 0.5%. Hypobank is also not much more.

The way to get around the 2000 per month limit is to just keep filing a Kundigung notice, saying that in 3 months you would need so many thousand euors. You do not have to withdraw the money, but you would have the right to do it without paying a penalty.

About a month ago, I was at the Muenchenerbank in Laimerplatz where one of the staff members is actually from Canada who was so happy to speak english with me.

Maybe it would be worth giving that branch a call. Muenchenerbank's rates for small amounts are better than the Stadtsparkasse and Hypobank.