Since February 1, 2023, the People’s Savings Account has been earning 6.10%, net of tax, a rate not seen for nearly 40 years for an investment of this type. At least 9 million French people are eligible, but have not yet opened an LEP. If so, here’s what you need to know about this unbeatable booklet.
Why is LEP so profitable?
0.54% on average for banks’ tax savings accounts (1); 3% for the Livret A and the Livret de Développement Durable et Solidaire (LDDS); and 6.10% for LEP. No savings product that is secure, available and free of charge can currently compete with the rate of the Livret d’epargne populaire (LEP). It is even the only one, in this category of investment, to provide savers with protection against the effects of inflation (+5.7%, excluding tobacco, in April 2023)
It is not a coincidence. Since 2021 and the last reform to date of the calculation of the remuneration of regulated savings products, the LEP rate is designed to align, at least, with the consumer price index (2). The savings account has thus recovered the role, formerly carried out by the Livret A, as a bulwark against inflation. This rule allows LEP to post its best rate since 1986 (7% at the time).
Characteristics of LEP
- Net tax rate since February 1: 6.10%
- Minimum amount to pay the opening: 30euros
- Minimum payment amount: 10 euros
- Payment ceiling: 7700 euros
- Withdrawals are free, provided the account balance is maintained in positive
- Eligible persons can only hold one LEP.
Who can open an LEP?
Unlike Livret A, the LEP is not a universal product. Its opening is reserved for major taxpayers domiciled in France for tax purposesclearly to natural persons who declare income in France.
This constraint excludes people under the age of 18but also young adults who choose to stay attached to the tax household of their parents. In effect, a maximum of two LEPs can be opened within the same tax householdfor the benefit of the taxpayer and his spouse or partner bound by a PACS (civil solidarity pact).
Another major limitation: not all tax households have access to the LEP. To be eligible, they must be below certain income limits.
What are the income limits?
Wondering if you have the right to open an LEP? If so, you were probably notified last February by an email from the tax office. To find out the answer, you can also refer to the tax notice received during the summer of 2022. It shows the 2021 reference tax income (RFR) for your tax household. It is this number that the banks will look at before opening an LEP for you. To be entitled to it, your RFR must be equal to or lower, depending on the composition of your household, than the figures compiled in this table:
| Reference tax income ceiling for holding a LEP in 2023 | ||||
|---|---|---|---|---|
| Shares of family quotient | Metropolitan France | Martinique, Guadeloupe, La Runion | Guyana | Mayotte |
| First part | 21393 | 25316 | 26466 | 39665 |
| Surcharge for the first additional half share | + 5714 | + 6047 | + 7285 | +10914 |
| Increase for the following additional half-shares | + 5714 | + 5714 | + 8558 | |
| Either for 2 tax shares (husband or PACS couple, single person with one child, single person with 2 children) | 32821 | 37077 | 39465 | 59137 |
9million eligible French people, but not equipped
Despite its strengths, the People’s Savings Account is still far from being full. According to the latest information provided by the Banque de France, just over 9 million French people had them at the start of 2023. If this figure is rising sharply, there is still room: still according to the Banque de France, 18million French people could claim it in 2021. This means that one out of two eligible people still does not have one. By way of comparison, nearly 81% of French people have a Livret A.
How’s the opening going?
Before agreeing to open a LEP for you, the bank has an obligation to ensure that you are eligible. For that, it checks your reference tax income for year n-2. In 2023, this is your RFR 2021, the one that appears on your tax notice received in 2022. This administrative constraint explains why opening a LEP is generally more complicated and time-consuming than opening a Livret A or Livret A an LDDS, and requires going to an agency.
To facilitate the opening and management of LEP, banks now have the option of automatically check your eligibility with the tax administration. Most major banks have implemented this automatic control, designed to facilitate the management of LEP. Unfortunately, this does not guarantee that you will escape the presentation of your last tax notices, with some stores still using the old method of opening despite this progress.
Crdit Agricole, La Banque Postale… These banks that will facilitate the opening of LEP
In which bank to open a LEP?
Do you want to open a LEP? It is better to present yourself in the branch of a large banking network. The product is, in fact, absent from the catalog of online banks, with the exception of Hello Bank!. On the other hand, it is offered in the vast majority of traditional banks.
Settled passbooks: products distributed by bank
(1) Source: Banque de France, interest rate on bank deposits, March 2023. (2) More specifically on the average, in the previous half-year, of the consumer price index excluding tobacco year-on-year.