More than eight million people in France who are eligible for a state-regulated tax and social charges-free savings account that currently offers a guaranteed 6% annual interest rate have not opened one, figures show. We explain who is eligible and how to sign up.
What is this regulated account?
The account is called le Livret d’épargne populaire (LEP). It is a savings account free of tax, social charges, and fees; and is available to people with modest incomes.
The interest rate is currently 6% – high in comparison to rates available for most other types of savings accounts. The regulated Livret A savings account, for example, which is open to everyone, has a 3% rate of interest.
The Economy Ministry has said that there are now 18.6 million people who are eligible for an LEP in France but only around 10 million people have opened one.
From January to September this year, a record €11 billion was deposited in the account. In total, around €59 billion is held nationwide in LEPs.
Withdrawals are tax-free so people can dip into the money frequently (for example, to tide them over until the end of the month).
What are the eligibility criteria?
The account is available to people living in France who have income which does not exceed a certain ceiling. The amount changes according to inflation and is based on the individual’s revenu fiscal de référence.
This is a net taxable income figure found in the annual income tax statement (avis d’impôt sur le revenu).
If you want to open an account in 2023, then you must have qualified on the income grounds either with regard to your 2023 avis relating to 2022 income and/or your 2022 avis for 2021 income.
The current levels are:
A single person: Income up to €21,393 per year
A couple: Income up to €32,818
The ceilings rise according to the size of your tax household, which essentially includes married and pacsed / civil partners, dependent children and disabled dependent adults such as elderly relatives who live with you.
To be specific, the ceilings depend on your ‘family quotient parts’, a figure used by the tax authorities, linked to family responsibilities. For example one part has one part, a couple has two, and a couple with one child has two and a half.
Ceilings are shown on this page under Qui peut ouvrir un LEP?
Upon opening the account, you must transfer €30 minimum and the account must always remain in credit to stay open.
To open an account, you must also be:
Aged 18 or over
No longer financially dependent on your parents
Fiscally resident in France
The deposit ceiling has recently been raised from €7,700 to €10,000, which does not include any accumulated interest.
How can I open an LEP?
Banks do not necessarily advertise LEPs prominently, perhaps because they are not profitable for them.
However all traditional high street banks offer them.
You can ask your bank. Banks are able to check your eligibility with the tax office, but may ask to see your tax statements to check you meet the income criteria.
If you do not have paper versions of these, you can find them in your online account at impots.gouv.fr.
Will the interest rate stay the same?
Regulated accounts in France, including the LEP, change their interest rates around the start of the year and in the summer, rates are linked to inflation.
This means that the rate is subject to change, although currently inflation remains high, so the rate is higher now than it has been for some years.
Interest is calculated based on 15-day periods and is added on December 31 each year.
Are the amounts in an LEP safeguarded?
Sums deposited into an LEP are guaranteed by the state. This money is managed by the deposit guarantee fund le Fonds de garantie des dépôts et résolution (FGDR).
How can you close an LEP account?
You can close an LEP account at any point by following the conditions in your contract (such as by lettre recommandée).
If, after opening an account when you were eligible, you later no longer meet the criteria for opening an LEP for two years running, you should request closure of your account by March 31 of the second year at the latest.