At a time when the health crisis is encouraging the French to fill up their risk-free passbooks, particularly their Livret A and Livret de développement durable et solidaire (LDDS), a decree has imposed new obligations on banks. From 2024, banks will have to eliminate duplication in regulated savings products.
Livret A and LDDS: record savings reached
Since the health crisis, the French have been forced to limit their spending and have therefore been saving. They have turned en masse to Livret A and LDDS passbooks, preferring security to liquidity. Indeed, in February, inflows to these passbook accounts reached a record level of almost 3.8 billion euros. For the first two months of the year, this figure stands at over 11 billion euros.
According to several experts, the Livret A and LDDS should continue to record substantial inflows over the next few months, given the continuing health restrictions. An outflow will only occur if the situation returns to normal.
Reinjecting dormant funds into the economy
According to the French Ministry of the Economy, many savers hold several passbooks of the same type, a practice prohibited by the French Monetary and Financial Code. Such duplication is generally unintentional. This is the case, for example, when a person opens a Livret A as an adult, unaware that their parents had already opened one in their name when they were a child.
A decree published in the Journal Officiel on March 14 now requires banks to check that customers applying to open a regulated savings account do not already hold one with another bank. This measure, designed to encourage the French to reinject dormant funds into the economy, concerns :
- the Livret d'Epargne Populaire (LEP) savings account,
- the Livret de Développement Durable et Solidaire (LDDS),
- Plan Epargne Logement (PEL),
- home savings accounts (CEL),
- Livret Jeune.
As a reminder, the Livret A has already been subject to this verification requirement by banks since 2013.
Tighter controls by 2024
Banks have until January 1, 2024 to comply with this new obligation. In concrete terms, banks will have to implement several measures:
- Ask the tax authorities whether the person already holds a regulated savings product in the same category;
- Refuse to open a similar investment if the applicant objects to the tax authorities disclosing the information ;
- Refuse to open if the tax authorities confirm that the applicant already holds one or more identical savings products.
In the latter case, the saver may decide to keep the passbook at the other bank, or close it and transfer the funds to the current account at his or her current bank. You have 2 months in which to ensure that you hold only one passbook, failing which any regulated savings products held irregularly will be automatically closed.