Savings account and fixed-term deposit FAQ (Luxembourg)

The savings account (passbook) stays available on demand: you deposit and withdraw freely, but the rate is variable and the bank can adjust it. A fixed-term deposit locks capital for a chosen duration (1 to 60 months) at a rate fixed the day you sign. Flexibility on one side, locked-in yield on the other.

Depends on your horizon. Money you might need any time, or an emergency fund (3 to 6 months of expenses): savings account. Capital with a known use date at 12, 24 or 36 months: fixed-term deposit. Many savers combine both.

Interest accrues daily (usually 365-day basis) at the current rate, then capitalises once or twice a year — most often on 31 December, sometimes quarterly. The rate can be changed by the bank at any time, typically with a contractual notice period.

Yes, at any time. That's the main downside vs a fixed-term deposit: the bank adjusts the rate unilaterally to reflect the market and ECB policy. You have no recourse, only the option to move your money to another bank.

An investment where you lock capital for a defined duration (1, 3, 6, 12, 24, 36 or 60 months) at a fixed rate. Capital and interest return to your linked current account at maturity. The product with the best yield visibility.

Yes, on the same terms. The Fonds de Garantie des Dépôts Luxembourg (FGDL) protects deposits up to €100,000 per holder per licensed bank, with no distinction between savings account and term deposit.

RELIBI final withholding tax of 20% on interest paid by Luxembourg banks, withheld directly. An annual €250 allowance per taxpayer per bank is exempt. Rules apply identically to both products.

Yes. Free capital movement in the EU allows a Luxembourg resident to open either a savings account or a term deposit at any EEA bank, protected by the home-country guarantee (€100,000 harmonised).

Yes. Every EU member state applies directive 2014/49/EU, guaranteeing deposits up to €100,000 per depositor. Non-EU countries (Switzerland, UK) apply their own schemes (esisuisse, FSCS) with different limits.

The best cross-border offers accessible from Luxembourg show rates between 2.5% and 3.3% gross p.a. on 12-month term deposits, notably via multi-bank platforms giving access to Maltese, Baltic and Portuguese banks. On variable savings accounts, the top rates sit closer to 1.8%–2.4%.

Longer terms usually offer higher rates. Makes sense if you don't need the capital short-term and want to lock in a stable yield ahead of expected ECB rate cuts.

Depends on the contract. Some banks allow early exit at the cost of losing all or part of accrued interest; others prohibit it. On a savings account there's no such constraint: free access.

Net yield = gross rate × 0.80 above the €250 allowance. A 3% gross term deposit yields around 2.4% net. A savings account at 2% gross: around 1.6% net.

Yes, with no limit. Diversifying across several banks lets you exceed the €100,000 guarantee ceiling while keeping every euro protected by the FGDL or an equivalent scheme.

Almost always yes. Both products are linked to a current account used for the initial funding and for returning funds.

Valid ID, Luxembourg proof of address, national matricule and IBAN of the linked current account. Opening is usually 100% online via LuxTrust or video verification.

Yes, usually fee-free and instantly if both accounts sit at the same bank. Between different banks: SEPA transfer, arriving in a maximum of one business day. Many savers cycle regularly between liquid and locked depending on cashflow.