French Banks: Best Savings Accounts Available in France

The credit crunch may well be making paupers of many of us, but those still with cash to invest can find some attractive interest rate deals in France.

Broadly speaking the best offers fall into two different categories – fixed term savings accounts, and Livret A promotional offers.

The former benefit from the increase in interest rates in recent months, whilst the latter from the liberalisation of the banks savings market in France that is about to occur.

There is something of a price war going on at the moment between the banks to attract new customers willing to deposit cash with them, so savvy investors can benefit from this new competitive environment.

We have trawled the market to look at some of the best deals on offer.

Fixed Term Savings Accounts

Fixed term accounts in France offer a guaranteed return over a specific period. The accounts are called comptes à terme (CAT).

In recent months their rates have been on the increase, with the best now offering a gross return of 4.5% to 6%.

As a general rule of thumb, the level of return will depend on the amount placed on deposit and the duration of the term. If you withdraw funds prior to the expiry of the term, you will be paid a lower rate of interest.

The fixed term may be anything for one month to three years, with different rates of interest applying for specific periods.

You need to check precisely what is available in your area, as well as the detailed terms, but to give you a flavour of what is around, we found the following:

• BNP Paribas is currently offering a rate of 5.117% for one year.
• The BPE, internet affiliate of Crédit Mutuel Arkéa, offers a CAT of 5.01% for six months.
• The Crédit Agricole is offering 4.81% on a CAT for six months.
• BRED, an affiliate of Banque Populaire, is offering 5.55% for a year.
• At Barclays you can get 5.25% for one year, whilst La Banque Postale are offering 4.4% for one year.
• The Caisse d'épargne of France has a number of fixed term accounts with the Captio CAT offering up to 5.5% and the Capciel account offering up to 6%.

The rates are gross, on which you will pay 11% social welfare levy, which will rise to 12.1% from January. You will also need to declare the interest on your French income tax return.

Livret A Savings Account

Livret A is a regulated French bank savings account that is exempt from French social charges and income tax. The standard, basic account currently offers 4%, up to a maximum deposit of €15,300 per person.

The account is currently only available at La Banque Postale and Caisse d'Epargne, but will be distributed by all the banks from January. Only the standard account from these banks is currently free from social charges and tax.

We have frequently sung the virtues of this bank account, which is available to residents and non-residents alike. You can read more about it here.

With all banks entering this market from next year, a number have already started promotional offers to try to attract new customers.

Some of the offers we found included the following:

• The internet bank AGF Banque is offering 7% for a year, equivalent to 4.97% net (as the interest above 4% is liable to the social welfare levy).
• CIC is offering what they call Livret A Sup, an account into which you can deposit up to €15,300, for a return of 5.6% gross (4% net). It is then possible to deposit a further €34,700 for a gross return of 6% (4.26% net).
• Société Générale is also offering an account that offers the equivalent of Livret A, with a gross rate of interest of 5.5% (4% net) up to a maximum deposit of €15,200.
• Crédit Agricole is offering a similar deal, with an account at 5.65% gross (4.01% net).
• BNP Paribas are offering what they call 'Livret A+1', with a net rate of interest of 5% for a year.
• LCL are offering 8% gross if you open a new account with them, up to a maximum savings limit of €50,000.

In relation to fixed term accounts, and promotional Livret A accounts, make sure you distinguish between what is offered gross (brut) and what it means in net terms. The true rates of interest are often dubiously displayed.

As the social charges rise to 12.1% in January, the following table show the gross and net positions at different rates of interest. You may also be liable for income tax on the net earnings.

Table: Interest Rate Returns

Gross Return	Net Return 2008	Net Return 2009
6%	5.34%	5.27%
5.5%	4.90%	4.83%
5%	4.45%	4.40%
4.5%	4.01%	3.96%
4%	3.56%	3.52%
3.5%	3.12%	3.08%

You can read more about banking and savings in France in our Guide to Banking in France.

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