At the start of the year, French Finance Minister Bruno Le Maire announced that the government wanted to simplify access to the Livret d'Epargne Populaire (LEP) savings account, which he felt was under-used, despite the fact that it earns more than the Livret A, whose rate has been down to 0.5% net per annum since February 1.
Conditions for opening a LEP
The Livret d'Epargne Populaire is an interest-bearing savings product. It is designed for people on modest incomes, and is accessible according to their taxable income. Today, 40% of French people are eligible for the LEP, but only 7 million have been opened.
The conditions for opening a LEP are as follows:
- your tax domicile must be in France
- one LEP per person up to a limit of 2 per tax household
- your reference tax income (RFR) must not exceed a certain ceiling (€19,977 for a family quota of one share; €25,311 for 1.5 shares; €30,645 for 2 shares; €41,313 for 3 shares, €51,981 for 4 shares...).
How LEP works and its advantages
The Livret d'Epargne Populaire savings account is available for an unlimited period, provided you meet the conditions for annual subscription. If this is no longer the case, you must request closure. The minimum deposit to open a LEP is €30. Subsequent deposits are free, both in terms of amount and frequency.
LEP interest is calculated every two weeks, on the 1st and 16th of the month. It can be accumulated and is available in your account on January 1 of the following year. Interest is not subject to tax or social security contributions.
Simpler access conditions
The French government has decided to facilitate access to the Livret d'Epargne Populaire (LEP) savings account by abolishing the requirement to present a tax return when opening the account, and a tax assessment each year to maintain the LEP. The Minister of the Economy announced: "I'm going to abolish these conditions. The French will no longer be required to present their tax forms". This verification will be carried out a posteriori by the banks with the tax authorities.
Since February 1, the LEP net annual rate has been 1%, in the wake of the cut in the Livret A rate to 0.5%.