9. French Bank Savings Accounts

1. European Tax Directive
2. Regulated Savings Accounts
3. Standard Savings Accounts
4. Home Buyers Savings Accounts

9.2. French Bank Savings Accounts - Livret A Etc

One of the distinguishing features of the French banking system is the large number of government regulated savings accounts in operation.

In effect, the French government sets the terms on which banks can offer these schemes.

Whilst there are limits on the amount you can deposit in these accounts, they offer an enhanced rate of interest, and, most importantly, they are free of French income tax and social charges.

With the reduction in interest rates in recent years, they have lost some of their allure, but that is the case for most forms of investment.

Accordingly, one or more of the accounts should form part of your savings/investment portfolio, particularly if you are resident in France.

A summary of these schemes, with maximum deposits and current (2024) interest rates are shown on the following table. These rates apply from 1st August 2024

9.2.1. Livret A

This is a savings account that historically was only available through La Poste and Caisse d’Epargne but, under pressure from the European Commission, since 2009 has been available through all banks in France.

It is a very popular savings account, with over 60 million accounts held in France.

However, like all bank accounts, in recent years the savings rate has plummeted,although it has recently started once again to rise. The rate of interest is 3.00% calculated every 15 days. The rate can be changed by up to four times a year (although normally twice) depending on the level of inflation and monetary conditions.

All interest earned is exempt from French income tax and social charges.

The maximum amount that can be held on deposit in the account is €22,950 per person, plus accrued interest.

The account is open to children as well as adults, so a family of four can hold four accounts.

There is no residence qualification for this savings account. However, you are obliged to declare the interest earned in your own country, so the benefit to a non-resident will be reduced by the extent of any home based tax liability.

No cheque book or bank card is issued with the account, although a cash withdrawal card is provided, which can be used in the cash dispensers of your chosen bank.

The maximum cash withdrawal is €800 over any 7 day period, although only €500 is available through a cash dispenser.

You can pay standing orders and direct debits from the account, although banks have the discretion to refuse.

You can only have one Livret A account per person and it cannot be held in tandem with a Livret Bleu account, available from the Crédit Mutuel.

9.2.2. Livret Bleu

This is a savings account only available through the Caisses de Crédit Mutuel.

You can only have one Livret Bleu account per person and it cannot also be held in tandem with a Livret A account.

There is no residence qualification for this savings account.

The rate of interest is 3.00% calculated every 15 days.

All interest earned is exempt from income tax and social charges in France.

The maximum amount that can be deposited in the account is €22,950 per person, plus accrued interest.

The account is open to children as well as adults, so a family of four can hold four accounts.

No cheque book or bank card is issued with the account, although a cash withdrawal card is provided, which can be used in the cash dispensers of your chosen bank.

You can pay standing orders and direct debits from the account.

9.2.3. Livret de Développement Durable (LDD)

The name of this account reflects the central investment purpose of the funds that are deposited on this account, although some of the funds are used for business development.

To have access to this savings account you must be fiscally resident in France and you can only hold two accounts per household (for a married couple).

It is generally available in all banks and can be used with other savings accounts, e.g. Livret A.

The rate of interest is 3.00%, calculated every 15 days.

The maximum that call be held on deposit is €12,000, excluding interest.

The interest is exempt from tax and social charges.

9.2.4. Livret d’Epargne Populaire (LEP)

This savings account is only available if you are resident in France.

It is also only available if your net taxable income is below a maximum threshold.

For 2024 the income test is based on your income for 2022, as advised on your income tax notice received in 2023. If your income later reduced (2023) you can still make application, provided you offer suitable proof.

The maximum income threshold is €22,419 for a single person, and €34,393 for a couple. It is increased by around €5,500 for each additional 'half-part' of a household, eg child. (2024)

To open an account you will need to produce your income tax return to the bank.

Married couples are each entitled to hold an account but there is a maximum of two accounts per household. The account is not available to children.

The maximum amount that can be held on deposit is €10,000 per person, plus accrued interest.

The rate of interest is 4.00%, calculated every 15 days.

If inflation goes above the rate of interest then the rate is increased from the sixth month.

The interest is exempt from income tax and social charges.

No cheque book or bank card is provided, but you are eligible for a cash withdrawal card.

The account is offered by all the banks.

9.2.5. Livret Jeune

This is a savings account reserved for young persons between the ages of 12 years to 25 years.

It is only available if you are resident.

Banks are free to set their own interest rate on the account, but the current is around 3.00+%. Interest is calculated every 15 days and is free of income tax and social charges.

The maximum amount that can be held on deposit in the account is €1600, excluding interest.

There is immediate access to cash and a cash withdrawal card is also available.

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