One of the first tasks to complete when moving to Luxembourg is opening a bank account. Luckily it doesn’t take much besides a valid ID and a proof of address.
As of 2016, there are nearly 150 banks in Luxembourg — with over a quarter being foreign bank branches, namely from Germany, France and Switzerland. Although Luxembourg is one the world’s largest financial centers, personal banking in Luxembourg is not particularly difficult for expats, even if they have not opened a new account for some time.
Types of accounts and packages
Banks in Luxembourg often offer packages to cater to its customers, whether they are a family settling down in Luxembourg, a business traveler, a young entrepreneur or anything in between. Banking packages typically include monthly statements, access to transactions, and online and electronic banking, but may include bank cards, loans and investments, insurance, and securities. Some even include perks such as discounts on particular restaurants and leisure activities.
Some of the largest banks in Luxembourg are Banque et Caisse d’Epargne de l’Etat Luxembourg (BCEE), Banque Internationale à Luxembourg, BGL BNP Paribas and ING Luxembourg.
Savings accounts usually include interest tax, but a portion of the savings can be exempt from this tax — accounts that are opened specifically to save for a house, for example, may have benefits and tax advantages. Students, children and new customers under 30 years old are also often entitled to discounts and benefits. Many employers offer special rates and services if you open an account at the bank they use – worth a check.
Online banking in Luxembourg
These days there is little need to visit a bank branch in person; most day-to-day banking can be done at ATM’s or, more commonly, online. Larger, international banks are more likely to have full-service online banking capabilities, while smaller banks may not offer this service or to the extent that larger banks do.
A good thing to know is that non-residents, those who have yet to move to Luxembourg, or even those who simply do not want to visit a bank branch may open a bank account online with many banks.
Transferring money abroad
International bank transfers may result in fees from both the issuing and receiving banks. As this is a fixed rate, it is typically cheaper than a money union for large sums, but more expensive than online payment systems such as PayPal and TransferWise for small amounts. Currency exchange brokers are increasingly offering cheaper options for money transfers and currency exchange, though you should always compare final fees.
Offshore banking in Luxembourg
Internationals often use Luxembourg as an offshore bank — in fact, many of the country’s banking clients are non-residents. Beside those that simply work in the country and live across the border (cross-border workers), other customers have chosen to bank in Luxembourg due to its greater privacy; favorable taxation for companies (it boasts one of the lowest total tax rates in Western Europe); access to deposits and protection against local, political, or financial instability.