How much does it cost each year to hold a bank account in France and which banks offer the lowest charges?

As a general rule, banking charges in France are modest, particularly if you maintain a credit balance in your account and you have no particular need for premium services.

Charges have come down in recent years, in large measure due to the growth in internet banking services, but also as a result of legislative changes in France and Europe.

Indeed, as a recent report from the government watchdog l'Observatoire des tarifs bancaires pointed out, in some banks opening and holding an account is free of any charges.

In their survey, 25% of banks offered a free basic account, and a large majority of other banks only charged a relatively modest basic fee of under €30 a year.

However, that is a slightly misleading picture, for in most cases if you want anything more than a chequebook there is a charge for the service, notably for a debit card.

The best offers come from the internet only banks, such as Boursorama, ING, Hello Bank!, Fortuneo, Soon AXA , BforBank, and Monabanq. Provided you maintain a credit balance, most of their services are free of charge, including an international debit card.

Neither is opening and running an account with one of these banks the hurdle it used to be, as they have relaxed their entry criteria, notably in terms of minimum income and balance.

Beyond the internet banks, the main High Street banks in France are Crédit Agricole, BNP Paribas, Banque Populaire, LCL, Société Générale, Crédit Mutuel, La Banque Postale, Caisse d'Epargne, CIC, and Caisse d'Epargne

Although we doubt few of you will consider it to be the only criteria you will wish to use, we provide below a table showing the top 20 High Street banks with the lowest charges.

In the table the following services and usage have been assumed:

• An international debit card
• Four purchases each year outside of the Eurozone
• Three cash withdrawals a year outside of the Eurozone
• Two standing orders a month
  
• One bank transfer a month within France/EEA
• A cheque book every two years
• No overdraft or other bank interventions

Source: cBanque

The largest cost item of those banks in the table arises from the annual charge for an international debit card, upwards of €37 a year, depending on the type of card.

As we state, those who want to avoid even this charge would need to use an internet bank, where an international debit card is offered free of charge by many such banks, although often subject to conditions, eg, minimum balance.

You will also need to watch out for charges for cash withdrawals from ATM machines other than those belonging to your bank. Many banks make a charge for such a withdrawal, although once again, due to the lack of a physical presence, if you use an internet bank ATM withdrawals are free of charge.

Similarly, cash withdrawals from a bank other than your local branch, even though it is in the same national network, will normally incur a charge. Payments with your bank card outside of the Eurozone will also incur a fee. Expect a fee of around 2% in most cases.

Standing orders and direct debits are frequently free of charge, although there may be a charge for setting one up in the first place. This is not usually the case with the payment of utility bills, where the service is almost universally offered free of charge.

Since the introduction of the Single Payments Area (SEPA) in 2014 banks can no longer charge more for cross-border transfers within the Eurozone than they can charge for transfers within France. As a result, many banks no longer make a charge for payment transfers within the Eurozone.

However, this does not apply to the UK, so if you are making regular transfers between the UK and France you might wish to discuss the charges with your bank. Alternatively, if you are making cash transfers a much cheaper option is to talk to a decent currency broker.

You will find that transfers within France carried out using the website of your bank are generally free of charge, but if you use the branch to make such a transfer it normally incurs a charge. Many French banks now also impose a period of delay of several days on new beneficiaries prior to processing the transfer.

If your banking needs are substantial and you would prefer to know each month just what are going to be your bank charges, then one option is to simply take one of the packages that the banks offer. These packages offer a range of services for a fixed fee.

In the past consumer groups in France have criticized the packages on offer for not being sufficiently tailored to the requirements of individual consumers, with services contained in them that many might rarely use.

As a result, many banks are now more willing to sit down with customers and work out a tailored package for the services they require, for which a monthly fixed fee may be agreed.