Opening a blocked account? Prioritise bank security

The banking sector worldwide and especially in Germany is highly regulated in order to ensure the financial stability and security of its clients’ assets. Thus, there are a lot of regulatory requirements that banks and their partners must fulfil.

For example: Besides the German banking act there are additional regulations such as the (anti-) money laundering law, the IT requirements to run a bank, Know-your-Customer principles, minimum requirements for risk management and many more.

All banks operating in Germany must fulfil these requirements, which are monitored by regulators frequently. This also applies to Fintiba’s partner Sutor Bank, which is operating as a fully licensed bank in Germany since 1921. As a close partner of a regulated bank, most of these requirements also apply to Fintiba.

The regulation of financial institutions in Germany is among the strictest in Europe, in order to ensure the stability of financial institutions and the security of customer assets. This may require more effort and lead to higher costs for financial institutions in Germany, but it is certainly a great thing for clients, as it offers a greater security.

Thus, even though the account opening fees and monthly costs at Fintiba seem higher at first glance, they reflect the secure and professional services we offer to our clients. We strongly believe that anyone transferring more than €10,000 to a blocked account should carefully check first, whether the provider is trustworthy and where and how their money would be kept. For this reason, we recommend that anyone choosing a blocked account provider should not only focus on the costs of the account as a decisive factor, but primarily research the setup, security and trustworthiness of the product and provider. It is particularly important that the account is opened at a German credit institution and held in the name of the client. Only then, the blocked account is subject to a full deposit protection in Germany and meets all requirements of the Residence Act.

In 2016, Fintiba developed a reliable digital blocked account solution together with Sutor Bank – a private institute with 100 years of experience in banking in Germany. This new digital product was created with a lot of commitment and effort as a secure and quick alternative to the paper-based account opening, which took several weeks or even months at the time. Since then, the digital blocked account product has been used by many students and fulfils all necessary requirements – including the administrative regulations of the Residence Act, which stipulate that a blocked account must be opened in the student’s name at a German bank.

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