All about Euro savings accounts: what’s available for both residents and non-residents in France…
Let’s start with the basic euro savings account information. If you have a current euro account with a French bank which you use to make all your euro payments, then you can open a euro savings account. It’s a simple application – and, just because you may not be fiscally resident in France doesn’t mean you cannot have one!
So what savings accounts are there?
Livret Accounts – What are they?
Compte sur Livret, Livret A, LDD or LEP accounts are simple instant access savings accounts, some available to both resident and non-residents living in France.
Generally these instant access accounts have no opening or closing fees and are easy to manage online. These euro accounts can be opened with small amounts from as little as 10 to 15 euros.
Some have a maximum savings limit while others with no limit at all. These accounts are eligible for children as well as adults.
You can set up regular transfers or payments from your current account to these types of accounts. If you need to get your hands on some of your savings, you may be able to transfer back into your current account online or phone.
Something to remember – if you do need to move your funds back in to your current account, try to time your withdrawals to take into account the system of interest calculation in order to maximize the interest earned. The same rule should be applied for the deposits made to your savings accounts.
Currently the rates of interest on these types of euro accounts are relatively low ranging from 0.10% to a 1.25% rate before tax per annum.
What are Epargne Logement accounts?
The main purpose of these types of euro accounts is to allow you to save in order to buy or extend a French property later on down the line. As your account balance builds up over time it will allow you to benefit from a reduced mortgage rate should you wish to buy a French property or extend the one you have.
There are two types of these accounts available:
The Compte Epargne Logement is an instant access account and allows you to set up regular or ad hoc deposits (minimum 75 euros).
The Plan Epargne Logement where regular deposits are obligatory. Depending on the frequency of your regular deposits the minimum may be 45 euros, maximum 540 euros. This account does not allow partial withdrawals therefore withdrawals mean closure of the account.
What types of Share Accounts are there in France
These types of euro accounts may be more helpful when interest rates are low on deposit accounts. Inflation in France is currently around 1.9% and in the it’s UK 2.4%, so you might consider diversifying your investments into shares, bonds and managed fund investments.
There are two types of share accounts for residents in France: CTO and PEA. The PEA is made of up of European shares and managed funds. For non-residents, a CTO account is available. This is a normal share account based on the French and international stock market.
What is an Assurance Vie?
In France, 39% of household financial assets are held in Assurance Vie policies.
These types of accounts offer tax advantages when it comes to taxation on revenue (impots) and inheritance tax. Contrary to popular belief, your funds are not blocked, and you may make a withdrawal at any time. There will be less tax to pay on withdrawals if you make your withdrawal once the policy has been opened for at least eight years.