Which bank to choose in Luxembourg?

9 June 2022
Which bank to choose in Luxembourg - cards, fees, withdrawals, transfers, mortgages, car loans, consumer loans, home savings, pension plans

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

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

1. Knowing the banks in Luxembourg

The first step in choosing your bank is to find out which banks are available on the market. In Luxembourg, the main banks for individuals are the following:

  • BGL BNP Paribas the branch of the French bank of the same name
  • BIL or "Banque Internationale à Luxembourg".
  • ING the subsidiary of the large Dutch bank
  • Raiffeisen a Luxembourg cooperative bank 100%
  • Spuerkeessthe Luxembourg state bank

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

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Also, if you have moved to Luxembourg for work, there is a good chance that your employer has passed on the an agreement with one or more banks. You can take advantage of discounts on their account and card offers (or even a preferential rate on your home loan).

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

2. Determine the type of current account that suits you

Once you know the players in the market, it is time to analyse the different offers. There are several criteria to consider when deciding which bank is best for you.

The price of the bank account

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

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

Here are the four types of bank accounts that can be distinguished among the offers of Luxembourg banks.

  • Free accounts : there are two types of accounts at 0€ per month...
    • 100% online accounts: a few banks offer free accounts with a card VISA VPay (allowing in-store collection and purchase, but not online payment). This is a good offer for those looking to save money. But if you need to shop online or overdraw, you'll need to plan to pay extra for a proper credit card.
    • Youth accounts : some banks reserve free accounts for students or to young people under 30 years of age. These accounts usually 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 2€ 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. On the other hand, in this price range, banks charge very different charges on external withdrawals or transfers you make. You should therefore compare these banks before choosing the best one. We discuss this in the next chapter.
  • Premium accounts : These are among the most expensive accounts in Luxembourg. They cost between €8 and almost €10 per month. These accounts usually 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 premium bank card (such as a VISA Platinum), but you will be charged extra.
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The quality and price of the bank card

In Luxembourg, most of the bank cards offered 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 bank cards and the options available for each:

  • Basic cards (Debit, Basic or Classic): This card allows you to withdraw money and make all your purchases. You will have some basic insurance that covers theft or fraudulent use of your card. The 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 rent a car abroadYou may have to 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 for trip cancellations (up to €5000/year). Theft and damage to your rental vehicles are also covered by this card's insurance. You can also take advantage of some promotions at certain VISA or Mastercard partner car rental 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 7500€/year compensation in case of cancellation You will also benefit from special offers and discounts from a selection of shops (travel, car rental, sports shops, etc.). You will also benefit from promotions and discounts from a selection of shops (travel, car rental, sports shops, etc.). You will also have a concierge at your disposalThe card can be used for a number of purposes (for example, if you are looking for a concert ticket that is no longer available, or if you are looking to have a bouquet of flowers delivered within 24 hours). All these services are very practical, but these cards are relatively expensive.

It is always best to choose 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 per month depending on the bank (excluding account fees). Make sure you choose a card that suits your shopping habits and your financial capacity.

Which bank to choose in Luxembourg?
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How to change bank in Luxembourg - Switchr

Withdrawal and transfer fees

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

  • External withdrawal fees : Some banks charge a fee for each withdrawal from the third-party ATM. These fees can be as high as €2 per withdrawal. If you often withdraw money abroad, this is an important point to consider when making your choice.
  • External transfer fees : Some banks will charge you a fee for transfers to accounts held at other banks. These charges are usually no more than €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 (e.g. family accounts), consider choosing a bank that offers a good number of free external withdrawals and transfers.

Bank overdraft fees

There are two types of overdraft fees in Luxembourg. On the one hand, there are the commissions, and on the other, the overdraft interest.

  • Overdraft fees 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 (e.g. 50 for each overdraft trigger banking).
    • Other banks charge a percentage of the amount due to the bank (e.g. 1%).
  • Overdraft interest are charged by every bank in the world. When your account balance becomes negative, the bank automatically gives you credit. You have to pay back this money at a predefined rate. In Luxembourg, the lowest rates are at 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 be sure to choose the bank that offers the lowest interest rates on the market. You can find these banks in this comparison.

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

Even if you are only looking for a current account to receive your salary and do your daily expenses, we advise you to look into this.

If you plan to stay in Luxembourg for several years, you will probably want to buy a car, flat or houseYou will need a bank that offers all of these services, and you will also need furniture to furnish your new home. You will need a bank that offers all these services.

You might as well choose a bank that will be able to support you over the long term (and offer you preferential rates on your loans!). Here is an overview of the products that might interest you:

Housing savings account

This is an account dedicated to the purchase of your main residence (flat or house). Each month, you save an amount that you define. This savings account allows you to deduct from your taxes, but also to benefit from a state guarantee for your home loanif your account is older than 3 years.

This is very interesting because the Luxembourg State will act as guarantor for you, and as you will not need to pay a bank guarantee, you will 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 amount each month. Part of this amount will be invested in obligations (low risk funds) and another part in stock exchange (in more or less risky investment funds). You choose the type of investment risk you want.

This type of investment is eligible for tax deductions each year. However, although you have the right to stop payments at any time, you must keep the scheme open until you are 60. If you close it earlier, you will have to pay back the tax refunded to you.

Consumer loans

They can be used to finance the purchase of your furniture, household appliances or electronic devices (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 expense from your taxes each year, which can make consumer credit cheaper than paying in instalmentsin some cases.

Car loans

They are intended for the purchase of a car. Some banks offer very favourable rates. In addition, you can deduct the interest charges from your taxes each year, which reduces the cost of the loan. This is probably why Luxembourgers often buy new cars: after tax deductions, the car loans are very inexpensive.

In summary: choosing a bank for the long term

If you plan 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, as most banks offer similar services, compare current account offers may be a good way to break the tie.

4. Find the best bank 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 (such as a VISA Classic or Premier). Avoid debit cards if you often travel abroad: with these cards you won't be able to rent a car. You may also encounter problems at motorway toll booths and petrol stations.
  • A monthly volume of free external withdrawalsif you often withdraw money from ATMs other than your bank's
  • A monthly number of free transfers in eurosif you often make transfers to accounts in other banks
  • A range of financial productsIf you are planning to stay in Luxembourg for several years, you should contact your local tax office.

You can compare all the banking offers available in Luxembourg on this online comparatorFind the best bank for your budget, your desires and your situation.

Which is the best bank?
Check out our selection to find the best deal.
Compare banks
How to change bank in Luxembourg - Switchr

Frequently Asked Questions (FAQ)

Which bank to choose in 2023?

You can choose a bank that offers low account maintenance fees (€3 to €5 per month) and includes a credit card (Classic, Premier). If you are looking to save money, choose an online bank. Most online accounts are free. However, you will need to take a credit card as an option, as you will not be able to pay everywhere with the VPay cards included in the online offers.

How do I know which bank to choose?

Analyse the different fees charged by the banks: account maintenance fees, withdrawal fees, transfer fees, overdraft commissions, overdraft interest rates, etc. Then compare the different banks. By comparing these criteria, you will easily find the best bank. You can do this on this online bank comparator.

Which bank is the most advantageous?

ING, Spuerkess, BIL, BGL and Raiffeisen are among the banks we have selected because they all offer very attractive accounts. Some banks offer cheap online accounts. Others offer a whole range of advantages (preferential rates, 2 free credit cards...). In the end, the most advantageous bank will be the one that corresponds to your main objective: saving money or getting the best bank card with the best advantages. You can make your choice by consulting this comparison of bank accounts in Luxembourg.

️ Which is the best online bank?

BIL, BGL and ING offer a free online current account (0€/month). However, you will only have a VPay card: it will not allow you to make purchases on the Internet or to pay at certain machines (petrol stations, motorway toll booths, etc.). You will have to pay extra to get a credit card that allows you to do all these things.

Should I choose an online bank or a physical bank?

In Luxembourg, all physical banks offer an interface for managing your accounts online. On the other hand, some of them offer online 100% accounts: all the management is done via the Internet. You will not have a dedicated bank advisor. It all depends on you: if you are independent and don't think you need financial advice, opt for an online account!

What are the characteristics to consider when choosing a bank?

To choose your bank in Luxembourg, you need to analyse: account maintenance fees, the cost of the bank card, withdrawal fees from competing ATMs, transfer fees to external accounts, overdraft fees, and overdraft interest rates. You can make these comparisons easily on this site.

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