Financial services

Bank Services

For living and working in the Czech Republic, you will probably need a Czech bank account. Your employer may require you to have a Czech bank account to send your salary. Whatever your reasons, opening a bank account is very easy and many banks offer online account opening with online authorisation.

How Can I Open a Bank Account?

When opening the bank account, you will need 2 personal documents – ID card, passport or driving licence. Also, a residence permit or student card may be required. Many banks require a deposit when opening a new account. Some banks require you to have a Czech phone number for authorisation codes.

How to Choose a Right Bank for Me?

The Czech banking sector is stable and you can choose from large international banks to smaller Czech banks. First, identify your needs and do a little research on your own. Almost every bank has a website in English and before visiting their branch you can set up an appointment with English speaking staff.

Additionally, if you are planning to do a lot of international money transfers, double-check the price list of Czech banks. Some of them already have free-of-charge credit and debit euro payments. You can also check offers of so-called “Neo-banks” such as Revolut (which has a very good currencies exchange rate), N26 or Monese. For a simple money transfer, you can use TransferWise.

List of selected banks:

Insurances

Insurance is a common part of the everyday life of a responsible individual. The Czech insurance market operates similarly to other European countries. Apart from mandatory health insurance and car liability insurance, most Czech citizens have building and contents insurance, civil liability insurance, life insurance, and also pension savings. Below we describe an overview of basic insurance products.

Health Insurance

As the title suggests, this type of insurance will cover the costs for your medical care, therefore it is necessary and also compulsory under Czech law. The same applies to foreigners who plan to stay here for more than 90 days. There are two types of health insurance: public and commercial, and you cannot decide freely which insurance system you belong to, as this is strictly determined by your nationality and/or personal and economic situation.

Public Health Insurance is a public service provided by the Czech Government. By following the public health insurance plan, one gets a very high value for health care – there are almost no limits for the coverage of medical expenses. However, the service is not available to all internationals. Some have to choose commercial insurance.

Insurance plans offered by commercial insurance companies may vary. Initially, you may pay less, but the coverage may also be lower. There is more paperwork for the doctors involved and there may also be cost limits for certain medical care. The unpleasant thing is that the commercial health insurance company does not have to extend your insurance later or may even terminate your contract. 

To learn more click here. 

Life Insurance

This type of insurance basically protects you in case of an unexpected loss of income. It is important for families with children and people with financial obligations (e.g. loans, mortgages, etc.). We have two types of life insurance – investment and risk life insurance.

The more common one – risk life insurance – covers the period of your inability to work, the time for recovering from an injury, the permanent effects of an injury, hospitalization as a result of an injury, disability, serious illness, and more. When arranging the risk life insurance, it’s important to set the insured amounts correctly according to your needs.

Investment life insurance is based on covering life risks as well as investing some money you can save in order to create a financial reserve. Part of this insurance is invested in common funds – there is a degree of risk and the amount of revenue can fluctuate, but you can deduct this part of the contribution from your taxes.

Car Liability Insurance

In the Czech Republic, you are obliged to have your own liability insurance if you own a car. This will cover the expenses if you cause injury or damage to another person while driving your car. These include medical treatment or damage to public/private property.  

Liability insurance sometimes includes assistance services, but it depends on individual contracts. Liability insurance does not cover our own damages or injuries, for this purpose there is the accident insurance. 

The liability insurance is covered by regular payments and in case of an accident, the insurance company covers the damage or medical treatment to the injured person. The amount of the insurance depends on the technical parameters of the vehicle and the data provided by the insurance company. 

To learn more click here. 

Car Accident Insurance

This type of insurance is voluntary and covers your costs in the event of damage to your car or motorcycle. The insurance includes damage caused by an accident, natural elements, vandalism or theft of your car or its parts. 

Accident insurance can be arranged for any vehicle suitable for driving, the price of insurance will depend on the type of the vehicle and other parameters specific to your vehicle. It is also important to check with your insurance company every year, as the price may decrease depending on the changing value of your car. 

There are also so-called additional insurances, which you can get for extra fees, otherwise they are not part of the accident insurance itself. Those can be assistance services, glass insurance, or providing you with a car that will substitute yours at the time of repair. 

Building and Contents Insurance

These two types of insurance are quite often confused, but there is a difference between them. Building insurance covers all your personal property that cannot be moved, i.e. your house, garage, or even building material, etc., Contents insurance covers property that can be moved – your furniture, electronics, clothing or sports equipment. What they have in common is that both types of insurance cover general damage, theft or damage caused by natural elements. 

When choosing insurance, it is important to pay attention to what it covers, as it may vary across individual insurance companies. Another thing to consider is what is necessary to include for your specific needs, such as what might endanger your own property (floods, storms, etc.) in the area where you live, in addition to the general ones. Always double-check that everything that is crucial for you is included in the contract you want to sign. 

Civil Liability Insurance

This type of insurance is here to assist you in everyday situations. It covers you personally in case you injure another person or their pet, and also if you damage their property. On top of that, it includes damage caused by other members of your household, your pets or operating your property / using your possessions.  

You have to take into account that it only covers unintentional damage. If you cause the damage under the influence of alcohol or drugs, or you cause it intentionally, this insurance does not cover the damage you cause. 

Also pay attention to the limit that you set for your insurance as it only covers the maximum of this amount. 

Pension Insurance

The Czech pension system includes two out of the three EU pillars. Those are the PAYG pension system and the possibility of supplementary pension saving. This system is based on your pension contribution to those who are already retired, while saving for yourself with an additional contribution from the state and your employer. 

The pay-as-you-go (PAYG) system is based on the principle that economically active individuals (i.e. employees and self-employed people) contribute to the pension system on an ongoing basis and these payments are immediately used to pay pensions. Simply put, the money collected each month for social security is immediately paid out in pensions. 

The third pillar of the pension system is optional and includes funding from the employer and the state. Employees may decide to start saving for their retirement, but to be entitled to the state contribution they must retire in the Czech Republic or stay here long enough to get the benefit. 

To learn more click here. 

Mortgages 

Mortgage is a long-term financial loan for which you have to guarantee by your property, which is located in the Czech Republic and is registered in the land registry. You usually guarantee for the loan by the building that is the subject of the loan, but another property can be used as well. 

About Mortgages

It may be more advantageous for you to arrange a mortgage together with your partner and not individually as Czech banks will be more willing to provide it for you. It is more likely that two participants will be able to make payments if one of them is unable to contribute. If your income is not high enough, you may not be given a mortgage at all.  

Another important point for Czech mortgages is that it is not possible to provide an amount of money that would cover 100% of the price. It is usually 80% of the cost and you have to pay the rest yourself. 

Classic mortgages are created for the purpose of financing the purchase of some real estate (house, flat, etc.) It can be for personal use or also for rent/investment. For non-purpose mortgages, you do not necessarily have to specify the object you are going to finance.

Most banks will require a Czech birth number when asking for a mortgage.

Payments

The mortgage payment is usually set at monthly fee. The person who obtains the mortgage determines the deadline for completing the payment and also the length of the loan rate fixation. The period is usually 5 to 30 years. There is alsopossibility to pay in advance, but many banks may charge you extra fees for this.

Investments 

Explore strategies for building your portfolio based on your risk tolerance and asset interests. Create a reasonable plan for building and protecting your heritage. A secure financial future will not just come. It requires thinking ahead, identifying your needs and goals, and creating a plan to achieve those goals. Your financial professional can help you with plans, tools and products to help you get where you want to go. This is not a common topic of everyday conversations in the Czech Republic, so the best way to learn more is to seek the help of a professional. 

 

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