Banking in Denmark

January 11, 2021 Off By Ludvig Hoel

Just like the other countries in Scandinavia, Denmark is largely a cashless economy-meaning that rarely do people have to pay for goods and services using cash money. Using payment cards of different types including master card, VISA, Dankort or credit card is the order of life in Denmark. In order to get paid by the employer of government, it is expected that you have a bank account into which the money will be paid.

Without a bank account, making transactions in Denmark can be difficult or sometimes even impossible. From experience, opening a bank account in Denmark should be at the top of your to do list as soon as you settle in Denmark. Having a bank account also makes it easy for you to manage your funds and track monthly or annual expenditures which is a good thing for personal finance planning.

Banking and Opening a Bank Account in Denmark

Banking is key sector in Denmark since it provides financial management solutions to companies and private people. Salaries and government support are paid to a bank account every time which makes it important. Having a bank account also gives you access to other facilities including loans and asset financing which is a good way to achieve personal growth. Because of this central role of the banking sector in Denmark, there are up to 20 banks.

Requirements for opening Bank Account

Banks in Denmark have various specific requirements that must be provided by anyone looking to open a bank account. The banks operate with some procedures which have been made easier for customers. The documents that they will ask when opening a bank account include:

Short term Residents (More than 3 months)

CPR number.
Yellow health insurance card (‘sundhedskort’),
Valid passport or national ID card, and employment contract (or documents for educational program if you are a student).

Long term Residents (Less than 3 months)

Your passport or national ID card.
Job contract.
Proof of your address in your home country .
Your Danish tax card.

Ease of Banking in Denmark

Banks in Denmark have made it easy for customers to get services whenever they need it. Almost all the banks have adopted technology in banking which is supported by the ease of communication provided by the government. For instance, you can easily get updates and information from your bank sent directly to your address or citizen mailbox.

Opening a bank account is as simple as having a CPR number. In most cases, when you have a CPR number it means that you have a legal status in Denmark and automatically have the other necessary documents. This allows you access to a Dankort and Nem Konto.

Importance of Having a Bank Account in Denmark

As soon as you open a bank account in Denmark, its becomes fully operation which means that money can be deposited and withdrawn to perform various transactions. Handling your finances will just get easier and you shall have solved the headache of having to keep updating your expenditure manually. The bank will keep record of every transaction and give you a statement whenever you may need it.

With a bank account, you have the freedom to transfer money from your home account, make mobile payments, receive salary and get monetary support from government or tax returns. In case you intend to use your bank statement to apply for other documents such as extension of residence permit, having a Danish bank statement will appeal to the government. Money in a Danish bank account appeases the government and proves your ability to support yourself and not exploit the system.

Costs of Operating Bank account

Shortly after opening a bank account with a Danish Bank, a banking cash card will be issued to you that makes it even easier to manage your money. With a banking card, you can withdraw cash money if you need it from any cash machines located all over Denmark. There are no costs associated with withdrawing money from an ATM machine. The fanciest thing with ATMs in Denmark is that they have been automated to the extent that account holders who have a card can just make self-deposits without having to walk into the banking halls. If you withdraw from you bank ATM, no charges are made but charges are made in case the card belongs to a different bank.

Each bank has its own charges associated with operating an account or other transactions. It is important to keenly check the charges before deciding which specific bank to turn to as a customer. Maybe you will need to check whether the bank makes communication in translated versions that you can understand. Also check on how the bank deals with loans processing, contracts, insurance, et cetera.

Danish Dankort

Dankort is the major debit card in Denmark. It is highly recommended that you apply for a Dankort as soon as your account is set and made operational by your bank of choice. Some banks may ask to see payments into your account for several months, see your paycheque or a good bank account balance before they can issue you with a Dankort card.

After making an application for the card, it can take a couple of weeks for it to be sent to your verified residential address. It is advisable that you specifically ask serval banks about their terms for issuing the Dankort because it allows access to funds in the national currency.

Where do I use a Dankort ?

Since Dankort is a Danish national currency card, it is a debit card which can be used everywhere within Denmark. It is the most used mode of payment in Denmark even more than cash and credit cards hence its popularity among the Danish people. Using a Dankort is also very easy which makes it a must have card for anyone whose interest is convenience. For instance, with a Dankort you only need to punch or swipe it over a card reader and the money is deducted directly from your bank account.

In case you use a credit card issued by the bank, a fee will be charged on you as well as the interest on the purchases made. Dankort are issued to account owners free of charge but some banks have special policies that require it to be charged.

Nem Konto in Denmark

On a day to day basis, an account owner may require performing transactions with the government through its public agencies. A Nemkonto is a dedicated bank account system linked to your normal account which allows you to get state payments such as tax refunds. The regulation that require all people living in Denmark to have a Nemkonto has been existence since 2005. Its intention was to ease transactions between individuals and the state.

Getting a nemkonto is a simple process which so many banks offer. All that one needs is choose which of the accounts you have should be your nemkonto. Use the self service system to sign the account up as a nemkonto.

In order to avoid problems in setting up a nemkonto, it would be good that you register it at the same time when creating the bank account. A nemkonto is basically linked to your normal bank account and the CPR number.

Some of the payments that the government send to a nemkonto include tax refunds, child payments, prescriptions subsidies, pension and others.

NemId

Just like most public services, banking in Denmark requires you to have a NemID which is part of the requirements when you log in to you bank account. NemID is a digital signature that comes in as a series of numbers from which you select a matching code anytime it prompts you when logging in. There are two steps when operating your bank account online (netbank).

The first step involves the password that is assigned to the account. This first step involves using your CPR as the username and the password of your own choice.

The second step is where the NemID is asked and you are expected to key in a code from the code card that matches the one displayed on the screen. Today, the code card can be downloaded from Play Store provided that you have your CPR details.

Using Nem ID in Netbank

Danish banks have implemented netbank or internet banking to make services more accessible to their customers at the comfort of their homes or wherever.

For someone with a bank account in any of the Danish banks to perform a transaction, they need to log into their netbank. To do this, you first enter the CPR and your own PIN associated with the CPR.

Afterwards, the mobile app will still need you to enter the 4 digit code in the code card that matches the 6 digit ones shown on your computer or phone screen.

This second phase is intended to secure transactions since it logs off automatically when you finish your transaction-meaning anyone trying to log into your account must have your cpr, the CPR password, and the Nem ID card. In reality, no one can be in possession of all these details required to operate a netbank unless you give it to them. Basically, all these features are intended to secure the transactions and funds in bank accounts from any fraudulent intrusions.

Banking Hall hours in Denmark

In Denmark, banks are not necessarily crowded meaning that during a normal working day, you can easily walk into the service hall and get attended to. The banking hall hours are very limited in Denmark. This situation is reasonable because not so many people need a one on one contact with the service attendants in the banking hall. It is possible to make a private appointment with an attendant assigned to your account or perform most transactions including depositing and withdrawing funds at the ATMs around the bank. You will access the ATM machine even at odd horses by scanning your ban card for the door to open.

The normal banking hours in Denmark run from 10am to 4pm from Monday to Friday. It is only on Thursdays that most banks open from 10am to 5 pm or 5:30 pm. The ATM machines, NetBank, live chat and phone hours are greatly accessible which compensates for the short banking hours.

Mobile Phone Payments

In Denmark, it is possible to directly link a mobile payment system with your bank. It means at any one time, you can receive or send money to your bank account through the mobile phone. The mobile payment applications can be downloaded from the play store. After installing the application (mobilpay), you link the phone number to your bank account which allows you easy and quick access to money in the account.

Banks in Denmark

There are multiple banks in Denmark from which you can choose to have a bank account. The choice will depend on their terms and conditions as well as your own preferences.

Arbejdernes Landsbank.
Danske Bank.
Jyske Bank.
Lån & Spar Bank.
Nordea.
Nykredit.
Sydbank.
VestjyskBank.

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Ludvig Hoel

Ludvig Hoel is the owner and driving force behind Scandinavia.life. A native Norwegian with ties to Denmark, Sweden and Finland, he is the perfect guy to guide you through the delights of Scandinavia.