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You can not avoid paying very high fees if you even find a bank which is doing this you are lucky. Your best bet will be to keep an american bank account and transfer the checks to that account. This done find a bank which does not charge too high fees if you get money by ATM in Germany. Most banks in the EU not just Germany will not even cash a check which is issued by a non EU country if they do so the fees will be very high. Another way would be to get the money as a money transfer instead of a check which is very uncommon in Europe. For this you will need a German bank account and have your pension transfered to that acount this will be the best way to handle this.
What Petra said is very true. However, I know Deutsche Bank allowed a friend of mine to deposit personal checks however, there is a really long hold on them, sometimes 1-3 months depending on the check, so it will be a hassle regardless. Good Luck!
Interesting question! I am in a similar boat, except the reverse, and it works quite well. Get your state pension office to send a wire transfer to your German bank, and if you're lucky and have the "right bank", there will be no additional charges. Shop around!! . You will need to investigate this carefully, but the payoff could be a "no fees"transfer ( except for the fluctuating exchange rate of course). I would not consider cashing actual cheques - as others have said, unreasonably long holds on it. good luck
Are you retiring military? You might want to get a small job on a military post , like volunteering at the USO or stacking greeting cards in the PX . Then you will have an Downey and can use check cashing at the PX. You will have to check on the legality of this , its just my suggestion , and dont want anyone to be told "no".