Which bank should you choose in Luxembourg?

Have you just arrived in the Grand Duchy? Or are you working here? Then you've probably asked yourself this question: which bank should you choose? Which bank should you open an account with?

We'll help you answer all these questions in this guide a comprehensive guide for new residents and those wishing to find the right bank in the Grand Duchy !

1. Banks in Luxembourg

The first step in choosing your bank is to find out which institutions are available on the market. In Luxembourg, the main retail banks are as follows:

• BGL BNP Paribas the branch of the French bank of the same name
• BIL or "Banque Internationale à Luxembourg
• Raiffeisen a 100% Luxembourg cooperative bank
• SpuerkeessLuxembourg's state-owned bank

These banks offer current accounts (with bank cards), loans, personal loans, home loans, home savings plans, pension plans and investment products.

Also, if you have moved to Luxembourg for work, there is a good chance that your employer will have passed on to you all the information you need. an agreement with one or more banks. You can take advantage of discounts on their accounts and cards (or even a preferential rate on your mortgage).

Ask your human resources manager for more information. However, you should also compare banks You could find a better offer!

2. Determine the type of current account that's right for you

Once you know the players on the market, it's time to analyse the different offers. There are several criteria to take into account when deciding which bank is best for you.

The price of a bank account

They are also known as account management fees" . This is a fee charged by the bank each month, which entitles you to keep your current account open.

These fees vary between €0 (for free online 100% accounts) and nearly €10 (for accounts with attractive ceilings and good Premier or Gold cards).

Here are the four types of bank account offered by Luxembourg banks.

• Free accounts : there are two types of accounts at €0 per month...
  • 100% online accounts: very few banks offer free accounts with a card VISA VPay (allowing in-store collection and purchase, but not online payment). It's a good deal for those looking to make savings. But if you need to make online purchases or go overdrawn, you'll have to pay extra for a proper credit card.
  • Youth accounts : some banks reserve free accounts for students or young people under 30. These accounts generally include a VISA Classic or Premier (or Mastercard Gold) card. After 30 years, this account automatically becomes chargeable, at the price indicated on the bank's website.
• Cheap accounts: The cheapest accounts cost between €3 and €5 per month. They usually include a basic card (VISA Classic), but some banks offer the card as an option. Some accounts also include a preferential rate on all consumer credit or car loans offered by the bank. However, in this price range, banks charge very different charges for external withdrawals or transfers you make. You should therefore compare these banks before choosing the best one. We'll talk about this in the next chapter.
• Premium accounts : These are among the most expensive accounts in Luxembourg. They cost between €8 and nearly €10 per month. These accounts generally include a very good payment card (VISA Premier or Gold), low overdraft interest rates and unlimited external transfers. If you often travel internationally, we recommend this type of card. You can also apply for a top-of-the-range bank card (such as VISA Platinum), but you will be charged extra.

The quality and price of the bank card

In Luxembourg, most of the bank cards on offer are VISA. There is no real difference between VISA and Mastercard: both are accepted in the vast majority of countries.

Here are the different types of bankcard and the options available for each:

• Basic cards (Debit, Basic or Classic) : This card allows you to withdraw cash and make all your purchases. You will have some basic insurance to cover theft or fraudulent use of your card. VISA Classic also includes repatriation and medical expenses insurance in the event of an accident abroad. It covers accidents that may occur during your travels. Note that the VISA Debit is a debit card: it will not allow you to make credits. You will therefore not be able to car hire abroadYou can also pay at a petrol station, and you may encounter problems when paying tolls on the motorway.
• Mid-range card (VISA Premier or Mastercard Gold) : These cards offer higher card payment limits (€7700 over 30 days) and compensation if your travel is cancelled (up to €5000/year). Theft and damage to your hire vehicles are also covered by this card's insurance. You can also take advantage of a number of special offers from certain VISA or Mastercard partner car hire companies.
• Premium card (VISA Platinum or Mastercard Platinum) : These cards include the best payment limits and insurance on the market. You can pay up to €10,000 over 30 days. You can apply for up to 7,500/year compensation in the event of cancellation of your trip, and your baggage will be covered in the event of delay or damage during your journey. You'll also benefit from promotions and discounts from a selection of retailers (travel, car hire, sports shops, etc.). You will also have a concierge at your disposalThe card can be used for a wide range of services (for example, if you're looking for a concert ticket that's no longer available, or if you want a bouquet of flowers delivered within 24 hours). All these services are very practical, but these cards are relatively expensive.

It's always best to opt for the card that offers the most insurance and protection. However, this depends very much on your budget: Platinum cards can cost between €20 and €40 a month, depending on the bank (excluding account management fees). Make sure you choose a card that suits your shopping habits and your financial capacity.

Withdrawal and transfer charges

This is a specific feature of Luxembourg banks: most charge fees that are not found in other border countries (such as France, Belgium or Germany).

• External withdrawal charges : Some banks charge a fee for each withdrawal made from a third-party cash dispenser. These charges can be up to €2 per withdrawal. If you often withdraw money abroad, this is an important point to take into account when making your choice.
• External transfer charges : Some banks will charge you a fee for transfers to accounts held at other banks. These charges generally do not exceed €1 per transfer. In addition, some banks offer a large number of free external transfers each month.

If you are used to travelling or making transfers to other accounts (your family's, for example), consider choosing a bank that offers a good number of free external withdrawals and transfers.

Bank overdraft charges

There are two types of overdraft charges in Luxembourg. One is commission, and the other is overdraft interest.

• Overdraft commissions are charged by a handful of banks in Luxembourg. These fees are charged as soon as your account goes into the red. Even if you are overdrawn by €1, you will be charged this fee.
  • Some banks charge a flat fee (for example 50 for each overdraft triggered banking).
  • Other banks charge a percentage of the sums due to the bank (1% for example).
• Overdraft interest are charged by every bank in the world. When the balance on your account becomes negative, the bank automatically gives you credit. You have to repay this money at a pre-defined rate. In Luxembourg, the lowest rates are 7%. However, some banks charge rates of up to 9%.

If you are often overdrawn, we advise you to choose a bank that does not offer no overdraft commission.

You should also choose the bank that offers the lowest interest rates on the market. You can find these banks in this comparison.

3. Loans, credit, savings: the products you may need in the future

Even if you're only looking for a current account to receive your salary and cover your day-to-day expenses, we advise you to look into this.

If you are planning to stay in Luxembourg for several years, you will undoubtedly want to buying a car, flat or houseAs well as furniture to furnish your new home. You'll need a bank that offers all these services.

It's a good idea to choose a bank now that can support you over the long term (and offer you preferential rates on your loans!). Here's an overview of products that might interest you:

Housing savings account

This is an account dedicated to the purchase of your principal residence (flat or house). Each month, you save a sum that you define. This savings account allows you to deduct from your taxbut also benefit from a government guarantee for your mortgageif your account is more than 3 years old.

It's very attractive because the Luxembourg State will act as your guarantor, and as you won't need to pay a bank guarantee, you'll save money on your mortgage the day you buy a property.

The pension plan

This is a financial investment that commits you to paying a certain sum each month. Part of this sum will be invested in obligations (low-risk funds) and another portion in stock exchange (in more or less risky investment funds). You choose the type of investment risk you want.

This type of investment entitles you to tax deductions each year. However, even if you have the right to stop making payments at any time, you must keep the scheme open until you are 60. If you close it earlier, you will have to repay any tax that has been refunded.

Consumer credit

They can be used to finance the purchase of furniture, household appliances or electronic equipment (computer, tablet, smartphone, television, speakers, etc). Some banks offer very attractive rates for consumer loans in Luxembourg.

You will be able to deduct part of the interest charges from your tax each year, which can make consumer credit more attractive. cheaper than paying in instalmentsin certain cases.

Car loans

They are intended for the purchase of a car. Some banks offer very attractive rates. What's more, you can deduct interest charges from your tax each year, which reduces the cost of credit. This is undoubtedly why Luxembourgers often buy new cars: after deducting tax, the car loans are very inexpensive.

To sum up: choosing a bank for the long term

If you are planning to stay in Luxembourg for several years, we advise you to choose a bank that also offers these types of financial products. All banks in Luxembourg offer these accounts, loans and financial investments.

However, most banks offer similar services, compare current account offers can be a good way to decide between them.

4. Find the best banking offers

To sum up, if you don't know which bank to choose in Luxembourg, we advise you to choose a bank that offers :

• A moderately priced current account (a few euros per month)
• A good bank cardThese cards allow you to pay in shops, online and withdraw cash (like a VISA Classic or Premier). Avoid debit cards if you often travel abroad: with these cards, you won't be able to hire a car. You may also encounter problems at motorway toll booths and petrol stations.
• A monthly volume of free external withdrawalsif you make frequent withdrawals from cash dispensers other than your bank's
• A monthly number of free euro transfersif you often make transfers to accounts at other banks
• A whole range of financial productsif you plan to stay in Luxembourg for several years.

You can find the best bank according to your budget, your wishes and your situation.