Savings Accounts: what is available in France?
What are they?
You may have heard of the terms Compte sur Livret, Livret A, LDDs or LEP. If so, you may know they are simple, instant access savings accounts, some of which are available to both French residents and non-residents.
Generally these instant access accounts have no opening or closing fees and are easy to manage online.
These accounts can be opened with a small amount, sometimes as little as 10 euros, some with a maximum savings limit, others with no limit at all. These accounts can be opened for children as well as adults.
You can set up regular transfers from your current account in to these types of accounts to help you save effortlessly. If you need to get your hands on some of the saved funds you can immediately transfer back into your current account online, through the app or, if you are a CA Britline customer, by giving us a call.
- TIP! When you move your funds back in to your current account always take in to account the system of interest calculation (every 2 weeks), in order to time your withdrawals to maximise the interest earned. The same rule should be applied for the deposits made in to your savings accounts.
Currently the rates of interest on these types of accounts range from 0,50% to 6,00% before tax per annum.
Epargne Logement accounts
Epargne Logement accounts are an option available to everyone, adults and children, whether you live in France on a permanent basis or not. As your account balance builds up over time it will allow you to benefit from a reduced mortgage rate should you wish to buy a French property or extend the one you have. There are two types of these accounts available:
- The Compte Epargne Logement which is instant access and allows you to set up regular or ad-hoc deposits, from a minimum of 75€. The total maximum deposit is 15 300€
- The Plan Epargne Logement where deposits are obligatory. The minimum deposit to open this account is 225€ and the regular deposits can be for as little as 45€ per month. The interest rate is fixed at the time you open the account and you can keep the account for a maximum of 15 years. This account does not allow partial withdrawals therefore if you need to access the funds you need to close the account.
It is always worth considering diversifying your investments in to shares, bonds and managed fund investments in order to maximise interest rates.
There are two types of share accounts for residents in France, they are called the CTO and PEA.
- The PEA is made up of European shares and managed funds and has fiscal advantages attached to it.
- The CTO account is a share account based on the French and international stock market.
In France 39% of a household’s financial assets are held in Assurance Vie policies.
These types of accounts hold tax advantages when coming to taxation on revenue (impôts) and inheritance tax. Contrary to popular belief your funds are not blocked and you can make a withdrawal at any time. There will be less tax to pay however on withdrawals if you make them once the policy has been opened for at least 8 years.