9. French Bank Savings Accounts
- 9.1. European Tax Directive
9.2. Regulated Savings Accounts
9.3. Standard Savings Accounts
9.4. Home Buyers Savings Accounts
9.2. Regulated French Bank Savings Accounts - Livret A/LDD/LEP
One of the distinguishing features of the French banking system is the large number of 'regulated' savings accounts in operation.
In effect, the 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 they are free of French income tax and social charges.
Top Tip!
Accordingly, one or more of the accounts should form part of your savings/investment porfolio, particularly if you are resident in France.
A summary of these schemes, with maximum deposits and current interest rates, is shown on the following table.
Table: Regulated Bank Saving Schemes
| Livret A | €15,300 | 4.0% |
| Livret Bleu | €15,300 | 4.0% |
| LDD | €6000 | 4.0% |
| LEP | €7700 | 4.50% |
| Livret Jeune | €1600 | 4.0% |
9.2.1. Livret A
This is a savings account that (for historic reasons) is currently only available through ‘La Poste’ and ‘Caisse d’Epargne’ but will be available from all banks in France with effect from 1st January 2009.
It is a very popular savings account, with over 40 million accounts held in France.
The current rate of interest is 4.0% calculated every 15 days.
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 €15,300 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 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.
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 Caisses de Crédit Mutuel.
9.2.2. Livret Bleu
This is a savings account only available through the Caisses de Crédit Mutuel.
There is no residency qualification for this savings account.
The current rate of interest is 4.0% 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 €15,300 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.
You can only have one Livret Bleu account per person and it cannot also be held in tandem with a Livret A account available from the La Poste and Caisses de Crédit d’Epargene.
9.2.3. Livret de développement durable (LDD)
This is a new name for an account, which up to Jan 07 was called CODEVI, an acronym for COmpte pour le DEVelopment Industriel.
The new name reflects the new central investment purpose of the funds that are deposited on this account, although some of the funds will continue to be 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 currently 4.0%, calculated every 15 days.
The maximum that call be held on deposit is €6000, 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 you are a low income tax payer, but this is the case for around 60% of the French population, and many expats on retirement pensions. You would be eligible in 2008 if you paid no more than €732 in income tax, on your income earned in 2007. This figure is revised upwards every year.
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 €7700 per person, plus accrued interest.
The rate of interest is 4.50%, 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 minimum is 4.0%. Interest is calculated every 15 days and is free of income tax and social charges.
Top Tip!
Check out the rates at 'La Poste' as they often offer higher rates than the main banks.
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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Finance & Taxation