German Blocked Account for Indian students !

15 minutes read about Blocked Account comparison

Before getting a German visa, and well before starting a course at a German higher education institution, foreign students need to open what is called a Blocked Account or “Sperrkonto” in German. Most probably, not many of you have encountered this kind of account before, but if you decide to move to Germany, it’s important to understand how it works to ensure a seamless visa application experience as well as a comfortable stay in the country. DeGiS is giving you the most comprehensive and up-to-date overview of the relevant Blocked Account providers and an extensive step-by-step comparison, which you should read before deciding to choose one of the providers.

What is a German Blocked Account?

Basically, a Blocked Account is a way of proving to the German state that students have the financial means to support themselves for a certain period. In many cases, the Blocked Account is a visa requirement. A Blocked Account is not a regular current bank account that all of us are used to. The main difference is that by opening a Blocked Account you will not get direct access to your funds and you will not get an ATM-card. There will be no opportunity to pay for goods/services directly from your Blocked Account. Instead of that, you will be receiving regular monthly disbursements from your Blocked Account to your regular current bank account. You can treat it as a monthly allowance which should cover your living expenses.  

Normally a Blocked Account is required from those people who do not have a stable and sufficient income within Germany. For example, students or language students, au-pairs, scholars, interns, etc. From January 1, 2020, the monthly required blocked amount is €853, which sums up to €10,236 per year.  It would be useful to remember that apart from the amount you need to “block”, there will be additional costs connected to the Blocked Account set-up and maintenance. Those costs will vary depending on the Blocked Account provider you choose.

 

Tips for German Blocked Account

Consult with the local German Authorities to make sure you are applying for the Blocked Account you are required to have

Choose Blocked Account provider deliberately by comparing – take 15 mins and read our guide below

Open your Blocked Account only with providers that are officially accepted by German Federal Foreign Office and compliant with the requirements of the Federal Ministry of the Interior (German Bank & Blocked Account in the name of the student)

Conclude a bundle including Health Insurance and further additional benefits, like a free Travel Health Insurance, as you will save time and money – see our guide on bundles

Apply in advance to allow unexpected delays – ideally a few weeks prior to your visa appointment

Research the cheapest and most convenient international money transfer options – usually remittance services are cheaper than traditional banks

Come to Germany having some additional funds, don’t rely on the Blocked Account only as it will take some days to activate it and get the first pay-out

Open a current bank account as you will need it later on to receive the monthly transfers from your Blocked Account

 

Blocked Account as a Visa Requirement

A Blocked Account is a compulsory aspect of the application process for a student visa and therefore you need to take it seriously and not to postpone till the last moment. It’s a good idea to arrange all of the bureaucratic aspects of your future studies in Germany in advance and Blocked Account is one of those aspects. Be prepared that it will take some time to open it and plan accordingly.

In the past, opening Blocked Accounts in Germany has been fairly time-consuming. Applicants used to wait for weeks from the moment they submitted their application to approval of the account. Applications can still take days or weeks with traditional providers like Deutsche Bank. However, digital providers have accelerated the process, allowing students to set up a Blocked Account in minutes. Nowadays, those are the four providers officially approved by the German Federal Foreign Office (in alphabetic order):

Coracle

Deutsche Bank

Expatrio

Fintiba

Please note: if the German Federal Foreign Office (represented by its Missions Abroad the embassies or consulates) accepts the Blocked Account for the visa process, which does not automatically mean, that it will also be accepted in Germany by the German Federal Ministry of the Interior, represented by its local Foreigner’s Authority (Ausländerbehörde) for the residence permit. Therefore we strongly suggest to only open your Blocked Account with a provider in compliance with the residence law(Aufenthaltsgesetz), which says that “the Blocked Account has to be with a bank that is allowed to perform banking services in Germany and on the name of the student”. We have unfortunately seen many students struggling with this during the time of arrival. This applies for especially if you open a Blocked Account with foreign banks like Kotak Mahindra in India or ProCredit in Colombia, but also if your money is held in escrow for you as then it is not in your name. Do not worry, we help you navigating and making the right decision!

You can find a comprehensive comparison for the providers below. Please have in mind, that our opinion does not include Deutsche Bank as we purely want to focus on the digital providers. Our opinion is made objectively, still it is personal. You might have different priorities and preferences, but hopefully we help you forming a sound decision.

 

Which Digital Blocked Account providers can I choose?

The three digital providers are Expatrio, Fintiba and Coracle, which are offering a fast and convenient digital way to open a German Blocked Account. Oftentimes they also offer other mandatory products like health insurance in their packages compared by DeGiS. Unlike traditional banks, Expatrio, Fintiba and Coracle allow the users to submit their applications and documents online, which saves a lot of time and helps to avoid excessive paperwork.

 

Overall rating of Blocked Account providers

Overall, after taking all the aspects into consideration, especially the most important factors of money transfer and Blocked Account activation, our judgement on the Blocked Account providers is as follows:

Expatrio – affordable, easy opening process, own payment solution Expatrio Pay with many local currencies available, easy activation process in Germany, great Log-in area with tailored additional offerings.

Coracle – slightly the cheapest with an easy opening and activation process in Germany, but little flexibility in money transfer. The technology is by far not as advanced compared to the others and a smooth self-service, as well as additional offerings, are missing.
*** The Coracle Blocked Account is held in escrow for the student or with the Spanish Lemonway! ***

Fintiba – most expensive provider and cumbersome in money transfer from abroad. Also activation in Germany is more complex. Big plus of the App does not influence rating too much.
*** Especially for country group 2 (e.g. India), Fintiba has major disadvantages in activation! ***

Please note, that this is made objectively, still it is personal. You can find a detailed comparison in the table below; this is held up-to date on the information we were researching in the providers’ Terms & Conditions, the FAQs and from qualitative data we collected over the time from the DeGiS members. We are also working on a weighting for the different factors to enable you weighting the factors that are important to you.

How can I compare Blocked Account?

There are many factors to take into consideration: price, application & opening, money transfer, activation and additional factors to consider. You find the details below.

1. Price

We have compared the prices in detail and have also taken the Terms & Conditions into consideration. Here we found that Fintiba is charging already from the moment when the money is paid into the Blocked Account, whereas the other providers start charging once the pay-outs start in Germany. The difference between pay-in and start of pay-out is based on research among students roughly three months, which we considered of course in our calculation.

DeGiS opinion on the pricing:

The sum of the fees for a 12 months Blocked Account, if fund transfer three months before arrival in Germany:

Coracle: €99

Expatrio: €109

Fintiba: €162,50

It is important to not only take the price into consideration, but also to have a look at the other important factors in the following.

2. Application & opening

DeGiS opinion on the application and opening process:

If you are in a hurry, it is all about speed here. With Expatrio and Fintiba you can receive the opening confirmation within minutes, as they make use of a technology which machine-reads your passport. Also, with those two providers, the process is very convenient, with some advantages for Expatrio as they ask for less documents (only passport). With Expatrio and Fintiba you will get access to your own Login-area, where you can handle everything with a self-service. This is not only important for the convenience, but also for the highest level of security, as e.g. no emails with sensitive information will be sent.

Therefore, we rate the providers as follows here:

Expatrio & Fintiba

Coracle

Attention! We also want to make you again aware of the fact, that the Blocked Account at Expatrio and Fintiba is opened with a German bank and in the name of the student, at Expatrio at BNP Paribas Germany (or alternatively Commerzbank) and with Fintiba at Max Heinr. Sutor (DE only). With Coracle, the Blocked Account is opened with either Postbank Germany (held in escrow by law firm called Ameli Bransky for the student), or at the Spanish Banco de Sabadell. As mentioned above, this factor is of utmost importance as the German residence law (Aufenthaltsgesetz) requires “the Blocked Account has to be with a bank that is allowed to perform banking services in Germany and on the name of the student“.

3. Money Transfer

Here we have heard many stories about difficulties in sending money, the processing time, high banking fees and costs for money exchange and plenty of extra documents required due to banking regulation. Therefore, for DeGiS, this is the most important factor of the opening process to be taken into consideration.

Opinion on the money transfer:

Speed: again, if you are in a hurry you want the money to arrive fast. Expatrio has embedded an international educational payment provider called Cohort Go, allowing transfer in your local currency (for several countries) or alternatively in EUR or USD. Depending on your bank, there is also the option that the funds are received instantly to your Blocked Account, otherwise usually 24hours. Coracle and Fintiba use swift bank wire which might take 3-5 business days and both only accept EUR.

Flexibility (Third party transfer, excess funds etc.): So many things can go wrong in international transfers, so you certainly do not want to be stuck and searching for your money, or being forced to provide additional documents, which applies for Coracle (e.g. a proof of transfer is always required or if you transfer in several more than one transfer) and Fintiba (e.g. in case your relatives transfer the Blocked Account for you or if you transfer in several more than one transfer). It might come even worse if you have to translate the additional documents to English or German first and only afterwards you receive the desired blocking conformation for your visa application. Expatrio is only asking for additional documents in case you transfer more than agreed (exceeding funds), which the other two also do.

Costs: be aware that your banks might charge a lot for an international bank transfer. They earn by adding banking fees and especially with the conversion (foreign exchange, FX rate) from your local currency to Euro. By the implementation of Cohort Go, Expatrio allows transferring in many local currency (or alternatively EUR/USD), which might be the cheapest option – please do the comparison with your local bank and other remittance services (e.g. Transferwise, Instarem, Remitout, XCurrency, Moin etc.) as you can easily safe a big amount of money.

After you transferred the necessary funds and they are reconciled by your provider, the blocking confirmation will be issued, which you need for your visa application. The faster you get it, the more peace of mind you have.

Therefore, we rate the providers as follows here:

Expatrio

Coracle & Fintiba

4. Activation

When you come to Germany, the Blocked Account has to be activated. This requires additional verification, e.g. providing a copy of your visa document, a German address and a current bank account. This is the moment of truth and therefore DeGiS’ most important factor in the activation process to be taken into consideration; once activated, you will receive your pay-outs and everything usually goes its way smoothly. You do not want to get stuck here as it would literally mean that you would be out of money, not being able to pay rent, insurance etc.

DeGiS opinion on the Blocked Account activation:

Once you arrive to Germany, you want to access your money fast. Coracle and Expatrio are straight forward on which documents they require for verification. Here Fintiba has a major disadvantage, with the upload of several documents and the mandatory physical provisioning (print out, sign, send via mail) of the so called “Certificate of Foreign Status of Beneficial Owner” (W-8ben), which has to be send physically to Fintiba office and being approved before fist pay-out! Furthermore, the verification is complex for country group 1 (e.g. China & Russia; download of verify-U App) and way more cumbersome for country group 2 (e.g. India) with an offline verification in the Post office (where people are not used to speak English; or alternatives, e.g. Fintiba office Frankfurt, Sutor Bank Hamburg, or DAK office).

Therefore, we rate the providers as follows here:

Expatrio & Coracle

Fintiba

5. Additional factors to consider

There are plenty of other factors influencing the rating. In the following we describe the most important ones:

Customer Service: Expatrio and Coracle are available throughout business hours (CET) the entire week. Fintiba is only available for 4 hours a day. Expatrio gives a 24hour reply guarantee.

Information & Guidance: Expatrio and Fintiba are both offering valuable information. Expatrio is offering that publicly available whereas Fintiba’s information is only available after log-in. Coracle is not offering such information and guidance.

Additional Services: Expatrio offers by far the widest added-value in the Log-in area. Students can create a profile and get relevant offerings for accommodation (Expatrio Living) and working student vacancies, internships and graduate jobs (Expatrio Jobs). Fintiba also is recommending short-listed partners for e.g. mobile phone contracts. Coracle does not offer such additional services.

Customer reviews: Expatio has by far the most and best reviews on Facebook, Google and Trustpilot (check Expatrio Trustpilot and Fintiba Trustpilot). It is important to understand, that the Trustpilot reviews are verified and followed by strict rules. Coracle does not have a Trustpilot account.

Mobile usage: Expatrio’s website is build responsive which means that the information, the application as well as the Log-in area are working well on mobile phone. Fintiba has build an App for iOS and Android, which is clearly a plus. Coracle’s website is not working properly on mobile phones, which can make the application process bumpy.

Bundles & Packages: As you will also need a Travel Health Insurance and a Public or Private Health Insurance once you arrive in Germany, please do not only have a look on the Blocked Account, but also on the other products you need to comply with visa requirements and university enrolment procedure. Therefore, also take the comparison of Blocked Account bundles into consideration.