French Savings Accounts

We all know that spending money is much better fun than saving it, but, if you relocate to France on a small income and a pile of capital, then you are going to need to find somewhere to earn interest on your cash. One very simple step you ought to take is to open one or more of the government controlled savings accounts in France, which offer relief on tax and social security contributions.

The interest rate on these schemes is not unreasonable and, because of the fiscal advantages they offer, they ought to form part of your savings and investment portfolio. Perhaps the most interesting of these accounts is the Livret A, which currently offers a rate of interest of 2.75%, completely exempt from all tax and social charges. The maximum that can be deposited in the account is €15,300 per person, excluding interest but, as the accounts are also open to children, this means that a family of four could deposit €61,200. You can only open a ‘Livret A’ account at either branches of the ‘La Poste’ or the ‘Caisse d’Epargne’. This monopoly is under challenge by the European Commission and the other French banks, so things may change in the future. A similar account you can open with the other main banks is called CODEVI (an acronym for COmpte pour le DEVelopment Industriel). The rate of interest is 2.75% and from 1 Jan 07, the maximum deposit is €6000, excluding interest. The interest is exempt from tax and social charges. The account can be used with other savings accounts such as Livret A. If you pay less than €709 per year in income tax (not unusual in France, where only half the population are liable) then you could also open an Livret d’Epargne Populaire (LEP) at any bank. The current rate of interest on a LEP is 3.75%, which is free of tax and social security contributions. Once again, there is a maximum deposit, this time of €7700 per person and a household cannot hold more than two accounts. All these accounts are instant access.