French Savings Accounts and Investment Products

1. Savings Accounts

An instant access savings account in France is called a “Compte sur Livret”. Banks also offer fixed-term deposits, known as “Comptes à Terme”, which have better interest rates for terms longer than one month. For larger amounts, a “Certificat de Dépôt Négociable” can provide slightly improved interest rates and shorter terms if necessary. Bank deposit interest is taxable for both income tax and social taxes.

However, there are various tax-free bank deposit accounts, with interest rates fixed by the government, and investment limits. The most common accounts are:

• ‘Livret A’ – Available from all banks, maximum investment of €22,950 per person, plus accrued interest.
• ‘Livret de Développement Durable’ – Available from all banks, maximum investment of €12,000 per person, plus accrued interest.

Both accounts have the same conditions, regulated by the government, and are only available to French residents.

Interest Rate:

• 0.75% per annum
• Interest is earned every 15-day period on the account balance, but applied annually (at the beginning of the following year or upon account closure if funds are withdrawn).

Access to Funds:

• Access is instant, but withdrawing money during an interest period can result in the loss of up to 15 days of interest. Ideally, withdrawals should be made on the 2nd or 16th of each month.

Tax Treatment:

• Interest is completely tax-free for French tax residents and does not need to be included in any French tax declaration.

For Low-Taxpayers:

There is an additional account called the “Livret d’Epargne Populaire” (LEP), offered by all banks, with an interest rate of approximately 2%. The savings limit is €7,700 per person. To qualify, you must provide a tax certificate proving that your income tax in France is below a certain threshold.

Another popular account is the “Plan d’Epargne Logement” (PEL), a four-year savings plan for house purchase or home improvement. There is no tax on interest during the saving period. If used for the intended purpose and the funds have been blocked for four years, the withdrawal is free from income tax (though not from social taxes).

2. Share Dealing

You can hold a share dealing account at your bank, through a stockbroker, or on the internet. A standard safe custody account is called a “Compte Titres”, where a share is known as an “action” and a government or corporate bond as an “obligation.”

Most people in France deal in shares through a special investment account called a “Plan d’Epargne en Actions” (PEA). This account allows you to hold and trade French and European shares while offering significant tax advantages, provided no withdrawals are made for the first five years.

Key Benefits:

• No tax on dividends or gains during the five-year saving period.
• After five years, withdrawals are free from Capital Gains Tax, though social taxes (15.5% of the total gain) still apply.

If withdrawals are made between 5 and 8 years, the funds must be withdrawn in a lump sum, and the account must be closed. However, after 8 years, the account can remain open, and partial withdrawals can be made indefinitely.

Any statements made here are based on our understanding of current laws and practices, which are subject to change. This information is summarised, and individuals are advised to seek personalised advice.

The financial advisers trading under Beacon Wealth Management are members of Nexus Global (IFA Network). Nexus Global is a division within Blacktower Financial Management (International) Limited (BFMI). All approved individual members of Nexus Global are Appointed Representatives of BFMI. BFMI is licensed and regulated by the Gibraltar Financial Services Commission and bound by their rules under licence number FSC00805B.