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The right to your own account

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Why is an account so important?
Living without a bank account is possible, but it is difficult. The European Union has therefore decided that every person has a right to an account. You will have to open your own bank account when you start your first job, if not before. Workers formerly used to receive pay packets – envelopes containing a week’s worth of wages in actual money – but these are a thing of the past. Your employer will credit your wages or salary payments to your account, cash payments are no longer made. You will also need a bank account as soon as you move out to the first place of your own, as rent payments cannot usually be made in cash. The same goes for telephone and Internet providers, electricity utilities, insurance companies, and so on. When the bill for your mobile phone is due, for example, you cannot walk into your provider’s offices and hand over the amount in cash. You have to make a bank transfer. Without an account, you would have to pay in the amount due in cash at the bank. But banks charge rather stiff fees for handling cash. If you have a youth account with an online banking option you can make the transfer yourself at no cost.

EU ruling: everyone gets an account

Because having a bank account is indispensable these days, the European Union decided that everyone is entitled to have one. This regulation came into force in spring 2016. As a rule, banks refuse to open accounts for people who do not have a fixed place of residence or have incurred excessive debt. This affects the homeless, but also students from other countries. Thus, many end up in a vicious cycle: No account without an apartment and a job – and no apartment or job without an account. The “Zweiten Sparkasse“ was established by Erste Foundation in 2006 for people who were refused an account everywhere else, to help them get back on their feet again.

Most money does not exist as cash

Today, most payments are cashless. No physical coins and notes change hands – instead, book money is credited to an account. Book money exists only in banks’ electronic processing systems as the credit lines that are entered in the various accounts. So, you need an account to participate in today’s payment transaction systems.

FAQ

An account is necessary to receive salary, pay bills and take part in modern payment transactions – cash payments are hardly ever envisaged today.
If you pay bills in cash at the bank counter, you often incur high charges. With a youth account and Internet banking, you can do this yourself free of charge.
Since 2016, every person resident in the EU has had the right to their own bank account – even people without a permanent address or with debts.
It supports people who would otherwise not have an account and helps them to get back on their feet financially by providing advice.

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