It’s official: from February 1, 2023, the remuneration of the People’s Savings Account will drop from 4.60% to 6.10%, net of tax. A rate that we have not seen for nearly 40 years for an investment of this type. More than 10 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?
0.33% on average for tax-exempt bank savings accounts (1); 3% for the Livret A and the Livret de Développement Durable et Solidaire (LDDS); and 6.10% for LEP. No secure savings product, available and free of charge, can currently compete with the new rate of the People’s Savings Book (LEP), made official this Friday. It is even the only one, in this category of investment, to provide savers with protection against the effects of rising prices.
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 with inflation (2). The savings account has thus recovered the role, formerly carried out by the Livret A, as a bulwark against inflation.
This new rule will enable LEP to post, on 1 February, its best rate since 1986 (7% at the time).
Characteristics of LEP
- Net tax rate from 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 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? To find out the answer, refer to your latest tax notice, the one you received last summer. It shows the reference tax income (RFR) of your tax household, corresponding to your income for 2021. This is the figure that the banks will look at before opening a 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 2022 | ||||
|---|---|---|---|---|
| Shares of family quotient | Metropolitan France | Martinique, Guadeloupe, La Runion | Guyana | Mayotte |
| First part | 20297 | 24018 | 25110 | 37663 |
| Surcharge for the first additional half share | + 5420 | + 5737 | + 6912 | +10354 |
| Increase for the following additional half-shares | + 5420 | + 5420 | + 8118 | |
| Either for 2 tax shares (husband or PACS couple, single person with one child, single person with 2 children) | 31137 | 35175 | 37442 | 56105 |
In concrete terms, if you go to a branch today to open a LEP, your eligibility will be checked on the basis of these ceilings and the RFR appearing on the tax notice received in 2022. Be careful, however, these ceilings will soon change: the judgment updating these thresholds for 2023 is expected very soon.
10 million 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, nearly 8.5 million French people had one in 2022. If this figure is rising sharply (+2million in 2022), there is still room: still according to the Banque de France, 18.6 million French people could claim it in 2021. This means that more than 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, she will have to check your latest tax notice dated. This administrative constraint explains why opening an LEP is generally more complicated and time-consuming than opening a Livret A or an LDDS, and requires going to a branch.
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 tax notice, 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, November 2022. (2) More specifically on the average, in the previous half-year, of monthly inflation on a year-on-year basis.