How to find the right bank for you in Luxembourg?
If you have just arrived in Luxembourg or if you intend to come into the country in the near future, one of your first steps will be the opening of a bank account. But which bank to choose? Is it possible to open a bank account before your arrival in Luxembourg? What is the best way to transfer money abroad? Here are some tips that will help you deal with a range of financial challenges you might face.
Banking in Luxembourg is not particularly difficult, even if you have not opened a new account for some time. Most of the banks in the Grand-Duchy have a large expat customer base and around a quarter of them are foreign bank branches.
Opening a bank account
The process is usually simple as long as you provide the relevant documents. If you want to open a retail bank account, you will need a valid ID such as an international passport or EU/EEA identity card or EU/EEA driver’s licence. You must bring a proof of address with your name such as a certificate of residence delivered by your commune, a housing contract, a proof of mortgage on a house, or even a recent utility bill. Some banks may also ask for a proof of employment such as a copy of your employment contract or a letter of employment.
The trouble is that quite frequently, as an expat or a newcomer, you need a bank account before your arrival in order to sort out accommodation. If you are renting, you will need to pay 2 to 3 months’ deposit upfront. This means that you must have a Luxembourg bank account to arrange the bank guarantee. If you are in this case, don’t worry. More and more banks in Luxembourg have expat-friendly offers that allow you to open a bank account from abroad. You can even open your bank account and savings account online. You just have to send your application and the documents required – your valid identity document, your Taxpayer Identification Number (TIN) and bank details of an account you already own. After a few working days, your bank account is open!
If you want to access credit cards, debit cards or other financial services linked to your bank account, you must show a proof of income for a consistent amount of time such as your last monthly payslips. Or, failing this, an amount to be agreed must be paid monthly into your bank account.
If you live outside Luxembourg but work in the country, you can get a non-resident bank account. You simply need to prove your address for correspondence purposes if you live in a neighbouring country.
Banks in Luxembourg offer different packages depending on the level of banking support you need, whether you are a family settling down in Luxembourg, a business traveller, a young entrepreneur or anything in between. These packages include monthly statements, access to transactions, online banking, bank cards, access to loans, investments, insurance and securities accounts. Don’t hesitate to compare the charges of the different banks and check each package before opening a bank account. Make sure you understand all the potential fees you may be required to pay, including charges on your account, credit cards and debit cards. Some banks are limiting the number of electronic transfers you can make per month. You may also be charged for withdrawing cash from ATM operated by another bank than yours. Not all banks work in partnership in Luxembourg.
Transferring money abroad
A common expat banking item is moving money from country to country, whether that be transferring funds into the country or making payments once you have relocated. Problems can include fees from both the issuing and receiving banks, how long it takes money to reach its destination and issues with using credit cards abroad. The best solution is to talk to your bank if you are going to be dealing with regular cross-border payments so that you can get the most attractive possible set up. Banks offer a lot more than they used to and it is much easier, especially within Europe. In fact, you don’t need to have several banks anymore, everything can be done from one account in Luxembourg.
Today, it is possible for expats and newcomers to make transfers and set up direct debits. The process is made even smoother thanks to mobile banking. Most of the banks in Luxembourg offer a wide range of services through their smartphone banking application.
Last but not least, many banks, including ING, are also offering to expats and newcomers an exclusive access to a team of experts who are able to answer their tax-related questions. Savings accounts include tax on interest but a good portion of the savings can be exempt from tax and some products such as home savings schemes, pension insurances and mixed life insurances have tax advantages.
For more information on our ING expat package, click here.
 EEA: European Economic Area. The members states are the 28 EU states, Iceland, Liechtenstein and Norway.
The queen of cards. There are many different types and they offer many possibilities other than cashless payment, from differed repayment to additional guarantees on purchases.
3D Secure is an internationally recognised security standard for online payments. The service is limited in Luxembourg to credit cards.
If it’s true that when we shop in a store and handover physical cash, the pain of paying finds the act prompts more awareness about spending, and parting with cash may even hurt a bit more than swiping a bank card.