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STUDYING IN AUSTRIA

Banking: How to open a blocked account in Austria

A blocked account is often required for non-EU citizens looking to study or in some cases even work in Austria. How do you go about setting one up?

Banking: How to open a blocked account in Austria
You might say that a blocked account is like slowly taking money out of a piggy bank. Photo: DPA

What is a blocked account (BA)?

A blocked account is separate from a normal bank account in that it sets aside a specific amount of money for the number of months someone intends to live in Austria. It pays out a specific required amount monthly to the holder based on how long they will be here. 

The BA is a way of demonstrating to Austrian immigration authorities that you have enough money to sustain yourself during the time you’re studying or looking for work.

“All the money which authorities ask for is paid back to you. It’s securing your financial independence,” Tim Meyer, Managing Director of X-patrio Global Services, told The Local.

Who applies for a blocked account?

In general, anyone from a non-EU country who won’t have income in Austria can apply for a blocked account. It’s often required for students who have already been accepted to study in Austria, as well as job seekers, au pairs, and international apprentices.

You don’t need a block account if you’re coming to Austria on a fully-funded scholarship from a reputable organization, such as Fulbright, for example.

For some countries, such as the US, UK, Australia, New Zealand, Canada, and South Korea, it’s possible to come to Austria on a three-month holiday visa, and apply for a blocked account when you’re already in Austria. You may need to demonstrate having one to get your residence permit.

READ ALSO: How do I get a student visa for Austria and what does it let me do?

How do you transfer money into a blocked account?

It’s possible to cheaply transfer money into a blocked account through services such as Transferwise, which allows you to send money from one country and currency to a different country and currency for a rate of only 0.5 percent. Transfers usually take up to five days to be completed, and sometimes a tad bit longer depending on your local bank.

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A blocked account is one way Austrian immigration authorities ensure people on visas can support themselves during their stay in the country. Photo: Ann H/Pexels

If you don’t have the money on hand, you can receive a so-called Haftungserklärung (a declaration of commitment). This only applies in some circumstances.  Typically au pair ‘parents; in Austria provide it for their au pairs, or sometimes the person has a family member who can also write this letter.

READ ALSO: EXPLAINED: How does the au pair program work in Austria

How much do you put in a blocked account?

How much you need to put in depends on how long you’re staying and how old you are.

If you’re under 24 years of age, you’ll need to put about €550 in per month that you’re going to be in Austria. If you’re 24 or older, you’ll need to put in €1,000. Married couples need nearly €1,600 per month and another €155 needs to be in the BA for each child coming with.

If you’re leaving Austria earlier than planned, you’ll need an official letter from the immigration authorities to line up a “closing order” from the bank.

Where do I open a blocked account?

Your account will need to be with an Austrian bank authorised to issue blocked accounts for student visas. 

There are many banks which offer the possibility of a blocked account, though not all of them offer the possibility to simply open an account online. Seeking services that do allow opening accounts online is not only more convenient, but often the only way to go forward for students or job seekers from countries who need a visa to enter Austria in the first place.

From there, you will have a newly created account which you can bring with you to the Austrian embassy after making an appointment to apply for a visa.  

READ ALSO: How do I get a language study visa for Austria?

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PROPERTY

Why are young people in Austria so pessimistic about homeownership?

Most young people in Austria do not believe they can afford to buy their own home with their income. Here is why.

Why are young people in Austria so pessimistic about homeownership?

Only 39 percent of young professionals think they can afford their own home with their income, according to a new GPA trade union survey

Around 1000 Austrians aged 16 to 29 participated in the survey, which shows that the expectation of being able to buy property without inheritance or help decreases with age.

Austrians aged 25 to 29 are the most pessimistic

The survey shows that as life and work experience increase, the expectation of being able to buy a home from one’s salary decreases.

Younger Austrians up to 24 years old are more likely to believe they can achieve this (44 percent) compared to Austrians between 25 and 29 years old (30 percent).

The difference becomes even more significant between those still in education (59 percent) and those who are working (33 percent).

Expectations are consistent across both low- and high-income groups.

READ MORE: How can I move into affordable cooperative housing in Vienna?

Young women least satisfied with salary

More than a third of young Austrians find that they have a salary that is too low.

In the survey, 43 percent of women expressed not being satisfied with their earnings, compared to 36 percent of men.

The survey also shows that the participants prioritise choosing educational fields where it is easy to find a job after graduation (86 percent) and where they can experience good earning prospects (84 ).

High prices, rates and strict lending criteria

One of the biggest barriers to owning a home in Austria is the sky-high property prices. Over the years, property prices have increased, making it more difficult for people with an average income to afford a place of their own. 

Another factor making owning a home challenging is the increase in interest rates in recent years. As a result, both existing variable-rate loans and newly obtained fixed-rate loans have become more expensive.

Analysts expect the European Central Bank to cut interest rates by around 0.5 percent in the near future, but according to durchblicker’s calculations, this would initially only create a little relief for loan takers, where instead of around 60 percent, 55 percent of monthly household net income would be needed for debt repayment.

Difficulties obtaining a mortgage

Another issue preventing many from realising their dream to buy a home is the difficulty obtaining a mortgage.

Since July 2022, stricter rules have applied in Austria for the granting of property loans. Loan applicants must have a deposit worth at least 20 percent of the value of their property to be granted a loan.

This means that young professionals need to work for many years and earn a high income to have a chance of being accepted.

READ ALSO: Why buying property in Austria remains unaffordable for most

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