Eight million people in France could be missing out on a regulated LEP (Livret d’épargne populaire) savings account, which is set to increase its interest rate to 4.6% from August 1 due to inflation.
The future rate of 4.6% is more than double that of the most popular regulated savings account in France, the Livret A (2%).
LEPs are tax- and fee-free.
Currently, almost 15 million people could technically be eligible for an LEP in France, but only seven million have one, according to the Banque de France.
This is despite them being reserved for lower-income households, with an interest rate more than double that of a Livret A or Livret de développement durable et solidaire (LDDS).
What are the eligibility criteria for an LEP?
To qualify, you must be:
- Aged 18 or over
- No longer financially dependent on your parents
- Financially resident in France
- Receiving an income lower than the cap set by the state
What are the income limits to open an LEP?
For 2022, the income limits were as follows, calculated based on the income you received in 2020 (your taxable income for 2021).
Each person in a household is considered to be ‘one unit’ (part), and any children are ‘half a unit’.
- 1 part: €20,296
- 1.5 parts: €25,716
- 2 parts: €31,135
- 2.5 parts: €36,554
- 3 parts: €41,973
- 3.5 parts: €47,392
- 4 parts: €52,811
- Any extra half parts: €5,420
Upon opening the account, you must transfer €30 minimum. Deposits and withdrawals are free and available at any time. The only condition is that the account must remain in credit.
The account limit is set at €7,700, not including interest. This means that including interest, the amount can be higher than this.
How do you open an LEP?
You can go to the bank during the opening period each year, with proof of the tax you paid for the relevant year.
However, since March 15, 2021, the process has been simplified.
This means that the bank can contact the tax authorities directly to check that you meet the conditions for opening and holding an LEP. However, if the tax authorities are unable to provide the bank with information, you will have to submit your notice to them.
If applicable, the spouse or civil union partner of an eligible person must provide valid proof of their marriage or civil union in order to gain access to the account.
How are LEP interest payments calculated?
LEP interest payments are calculated based on 15-day periods and are added to the account on December 31 each year.
To understand more about how the rates are calculated see here (in French).
Is it possible to transfer the amount from one bank to another?
Yes, you can transfer your LEP from one bank to another without fees or losing any money.
Are the amounts in an LEP guaranteed?
Sums deposited into an LEP are guaranteed by the state up to €100,000 per account holder and establishment. The deposit guarantee fund le Fonds de garantie des dépôts et résolution (FGDR) manages this.
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 your account when you were eligible, you later no longer meet the criteria for opening an LEP for two years running, you must request closure of your account by March 31 of the second year at the latest.