The increase in the Livret A interest rate, from 2 to 3% net on February 1, motivated the French to invest more of their savings. In this month alone, more than 6 billion euros were placed in the Livret A, and nearly 2 billion additional euros in the LDDS.
While the rate of return on these two regulated investments has tripled in one year, the cost of financing for the State is therefore higher. Logically, the tax authorities are therefore more attentive to the discrepancies of the French on these guaranteed savings books.
Only one Livret A authorized per person
The bank asks you to promise it when opening the Livret A: you must not, under any circumstances, hold a second booklet elsewhere. Each French person is authorized to have a Livret A, an LDDS, a CEL and possibly a Livret d’Epargne Populaire if eligible. He cannot multiply them in which case he exposes himself to sanctions.
Combining all these investments, this represents almost 58,000 euros in savings which is guaranteed by the French State. On the Livret A alone, the ceiling is set at 22,950 euros. In France, approximately 7.5% of all Livret A savings accounts have reached the ceiling: under no circumstances should you attempt to open a second (or more) to make the rest of your capital grow. However, there is one exception that allows you to exceed the limit: interest generated over time.
If you have completed all your Livret A, the LDDS and other investments regulated by the State, you only have one alternative left: turn to savings books (or other products) offered directly by your bank. From January 1, 2024, each bank will be required to carry out an anti-duplicate check when opening a regulated passbook. It will therefore no longer only be declarative. At present, only the Livret A implies an automatic control.
Your bank will probe the tax authorities
From that date, your bank will therefore directly request the tax authorities to find out the status of your investments. If you have been tempted to cheat in the past by holding several of these regulated accounts, your bank will let you know. Therefore, you will have 2 months to regularize your situation and close unauthorized passbooks.
Rather than tempting fate by opening several Livret A, it is therefore better to keep a low profile so as not to arouse the interest of the tax authorities. If the multiple possession of state-supervised passbooks is not authorized, the majority does not give right to a sanction. The new regulations which will come into force early next year will see no financial penalties on the LDDS, LEP or CEL in the event of multiple holdings. Only a forced closure will be applied, nothing more.
On the other hand, the financial penalty on the Livret A is real. It is the General Tax Code which provides for a fine of an amount equivalent to 2% of the outstanding amount of the secondary savings account (it will only be applied if the amount exceeds 50 euros). For example, if you have a second Livret A with 10,000 euros, the tax authorities may deduct 2%, or 200 euros, before requiring the forced closure of this second investment.
What alternative is there?
If you have reached the ceilings on the Livret A and LDDS accounts, you will then have to turn to other savings and low-risk investments. This is particularly the case for banks which are currently offering attractive remuneration on their savings accounts. While rates are generally rising, they are also able to offer attractive returns on the capital invested by their clients.
While the Super Livrets disappeared from circulation in the last decade, some establishments are now returning with attractive rates. This is for example the case of Fortuneo Banque (a subsidiary of the Crédit Mutuel Arkéa group) which offers a return of 3.5% gross over 4 months and up to 100,000 euros in payment. This is also the case of the online subsidiary of BNP Paribas, Hello bank!, which offers all its customers a rate of 2.50% gross for one year, up to a limit of 50,000 euros.
