French Savings Accounts and Investment Products

1. Savings Accounts

An instant access savings account is a “Compte sur Livret”. Banks can also offer fixed term deposits, for over one month, which offer better interest rates, called “Comptes à Terme”. For large amounts a “Certificat de Dépôt Négotiable” can offer slightly improved interest and a shorter term if necessary. Bank deposit interest is taxable, for income tax and “social taxes”.

However, there exist various TAX-FREE BANK DEPOSIT ACCOUNTS, for which the interest rates are fixed by the Government and for which the amount invested is limited. The most common are:

‘Livret A’ – available from all banks maximum €22,950 per person plus accrued interest.

‘Livret de Développement Durable’ – available from all banks, maximum
€12,000 per person plus accrued interest.

The conditions of the accounts are the same and are regulated by the government: They are only available to French residents.

Interest rate : 0.75% p.a.

Interest is earned for every 15 day period on the balance of your account, but is only applied once a year – either at the beginning of the following year or on closure of the account if you take out your money during the year.

Access to funds : Access is instant but you may lose up to 15 days interest if you take out your money during an interest period. The ideal is to take out money on either the 2nd or the 16th of each month.

Tax treatment

Interest is totally tax free to French tax residents and should not be included on any tax declaration made in France.

For low-taxpayers

There is a further account called the “Livret d’Epargne Populaire” (LEP).

Offered by all banks, this account offers an interest rate of approximately 2% for savings limited to €7,700 each. You have to prove, via a tax certificate, that you pay less than a specific amount of income tax in France, in order to qualify.

The other deposit account, which is commonly used is a PEL or“Plan d’Epargne Logement”, which is a four year savings plan, aimed at saving for house purchase and home improvement. There is no tax payable on the interest, while you are saving. If the sum is then used for the above purpose and has been blocked for 4 years, it can be withdrawn free of income tax (but not “social taxes”).

2. Share Dealing

You can hold a share dealing account at your bank, a stockbroker, or on the internet.
The normal safe custody account is called a “Compte Titres”. A share is an “action” and a Government or Corporate Bond is an “obligation”.

Most people deal in shares through a specific form of investment called a “Plan d’Epargne en Actions” or PEA. This account allows you to hold and deal in French and European shares and provides considerable tax advantages ON CONDITION THAT no withdrawals are made for the first five years.

In that case, no tax is payable on dividends nor gains, during the five year period of saving, and the withdrawal of the sum is then free of Capital Gains Tax, with only the inevitable “social taxes” being payable at 15.5% of the total gain.

Withdrawals between 5 and 8 years must be made in one lump and the account closed. However, if the account is not touched for 8 years, it can then be left open and partial withdrawals can be made indefinitely.

Any statements concerning the above are based upon our understanding of current laws and practices which are subject to change. Information has been summarised and an individual is 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 bythe Gibraltar Financial Services Commission and bound by their rules under licence number FSC00805B.

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