Wondering what are the different savings accounts in France available for you? Some are centrally controlled by the government and offering very interesting benefits but under specific conditions.
Therefore, it is important for you to understand the different options available before making a decision about which one to open. In this blog, we will walk you through the most important ones based in our own acquired knowledge… Let’s start!
Table of Contents
What kind of savings accounts in France?
First, there are the classic account types like deposits, savings, fixed-term…You should be already familiar as most likely it is the same as in your home country.
Then, there are ‘super savings account’ promoted by some banks to attract customers offering temporarily high interest rates. But after certain time, they would apply standard low rates (normally way lower than inflation).
For this reason, we do not recommend to open this kind of savings account as it is more a marketing trap not sustainable over time.
Finally, you have the ‘special’ account types such as ‘Livret A‘, LDDS (Livret de développement durable et solidaire), LEP (Livret d’Epargne Populaire), PEL (Plan d’Epargne Logement), CEL (Compte Epargne Logement) and the ‘Livret Jeune’… yes, there are too many! but it is worth it to understand them.
How to select the best savings account in France?
The key and commun 2 variables to understand are:
- The amount. If need to keep handy an amount less than 22k€ (emergency fund, or personal projects), opening a ‘Livret A‘ could be best. However, if you need to save a larger amount, then continue reading 😉
- The taxes. Most of the special savings accounts are income and social contribution tax exempted as regulated by the government. This is very unique in France, as almost any other income will be at least taxed with social contributions.
Here a comparative matrix:
|1 per person
|1 per person
|1 per person (12-25 years old)
|1 per person (low income family)
(as Q1 2023)
|Not fixed but > Livret A
- Interests earned do not impact the limits of each account type.
- No need to declare these accounts within your tax return file.
- There are no penalties / fees for withdrawals.
- LEP is reserved for low income families (21,393€ for a single person, or 30,706€ for a couple)
- Data shown above is from September 2023 and it may not be the latest one by when you are reading this blog
Why having a saving account in France is important?
Having a savings account in your portfolio is important as it will allow you earning interests (even though it will hardly beat the inflation), with very low risk and full availability of your funds.
Normally, a family should have an ’emergency fund’ with the equivalent of 3 to 6 months of expenses. This could be useful during hard times (employment period, health issues, etc).
It might be more convenient having your emergency funds in a savings account, rather than in a current / checking account slowing losing your purchasing power and sometimes paying bank fees.
However, if your risk tolerance is limited, and you want to save a maximum amount optimizing taxes and with the highest possible interest rates, you can open multiple savings accounts with up to 135 800€ (family of 4). See image below:
Savings accounts in France with highest interest rate
The top savings account in France earning the most is the ‘Livret d’Epargne Populaire’ – LEP with an incredible 6,1% (as per april 2023). However, It is reserved french tax payers and for low income families and limited up to 7,700€ x person or 2 accounts per family.
How to know if you below to the ‘low income families’? It fixed as as per your taxabled revenue (referred to the tax return from previous year).
As example, for a couple with a child (2,5 parts) the family revenue should not be higher than 38,530€ for 2023. Click Here for more information.
Can a savings account be used as salary account in France?
Nope! Even though in France the labor law only requires a bank account at your name, you will need to provide a RIB -‘Relevé d’Identité Bancaire’ (Account details) to your employer. The problem is that savings accounts do not have RIBs.
Therefore, most likely your bank will recommend you to open a current account (so you can have a RIB and a CB ‘carte Bleu’. Then, you may plan automatic transfer to your savings account.
Our final thoughts about French savings accounts
If you qualify for a LEP (Livret Epargne Populaire) it might be a good idea to go for it considering its high interest rate and tax advantages.
Secondly, we would open a ‘Livret A‘ and/or a LDDS account as it will allow us earning a decent -full tax free – interest rate with zero risk. We personally have each one a ‘Livret A’ and we put there our ’emergency fund’.
As all the other savings accounts are rarely beating the inflation rate, we do not normally use them and prefer to invest in other assets instead. Here our blog about investing in France in case you are looking for some ideas.
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Please remember that we are neither financial nor tax advisors. We are just sharing our best understanding based in our own experience. This blog is for educational purposes only. Do not make investment decisions solely based on what you read in this blog. What works for us, may not for you. Do your own research and look for professional service if required. Read our full disclaimer in the ‘about’ page.