Livret A, LEP, PEL… Which is the best structured savings product for you?

The French have an opportunity, unique in the world, to be able to invest tens of thousands of euros, with a guarantee from the state, full availability and non-existent taxes. But are all regulated savings products equal? Here are the advantages of each and some tips for choosing according to your profile.

We forget it sometimes, but it’s unique in the world. The French organized savings allows each of us to allocate tens of thousands of euros by taking advantage of tax exemptionFrom total security on the capital and Immediate availability, available now. Up to €42,650, for example, for adult taxpayers with average income, by combining Livret A, LDDS and LEP. And even nearly 120,000 euros by combining PEL and CEL in addition.

How do you choose among the cousins ​​of this large family? Which account should I open first? We examined the Livret A, the Sustainable and Solidarity Development Handbook (LDDS), the People’s Savings Handbook (LEP), the Youth Handbook, the Housing Savings Plan (PEL), and the CEL (home savings account), based on six criteria: yield, repayment cap, and accessibility availability, security, and use of funds.

Yield: LEP

Obviously, this is the first question we ask ourselves when we invest money: How much will you bring me? With regard to regulated savings, the reference is the Livret A rate, which is set by the state and which affects all others, except for the PEL. That’s good: this rate comes from Quadruple in six months It is now 2%. Obviously, because organized savings, with the exception of the last CELs and PELs, benefit from tax and social exemption, which incidentally costs the state very dearly.

By this criterion alone, the People’s Savings Book is the most interesting, by far. In fact, his wages since August 1, 2022 has been set at 4.60% net. Why all the difference with the Livret A? Simply because it is designed to protect your savings from price hikes. The role of bulwark against inflation was previously assigned to Livret A, but has recovered since 2018. Thus its bonus is currently in line with (high) average annual inflation during the first half of 2022. Given the current price increase (+6.1% in July 2022), likely to increase again in February 2023.

The main characteristics of regulated savings products as of August 1, 2022
current interest rate Payment cap outstanding minimum tax collection
booklet 2% 22950 10 no one
LDDS 2% 12000 10 no one
s 4.6% 7700 30 no one
Youth Handbook at least 2% 1600 10 no one
il p 1% 61200 down payment of not less than 225; Then 540 a year Income tax and social security contributions
CE 1.25% 15300 300 Income tax and social security contributions

Why this bonus for LEP? Simply because it is targeted specifically poorest familiesthose who published in 2021 (and therefore in their 2022 tax notice) a reference tax income (RFR) less than 20,297 euros for the family share. Either, all the same, a French household is roughly one in two, at the discretion of the Bank of France.

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Do these returns seem low to you compared to inflation? Structured savings are often mocked from this point of view, they are no less useful when compared with other products with the same characteristics. According to the Banque de France, regular brochures, whose rates are freely set by banks, currently make 0.09% on average, before taxes and social security contributions. Even euro life insurance funds, traditional competitors to regulated savings, have lost the lead in this criterion.

Ceiling: PEL . feature

Before taking power in 2012, François Hollande made a promise: double the cap on Livret A. Because we cannot, in fact, benefit unlimitedly from regulated savings products. Each has a maximum payment limit, which can only be exceeded by interest capitalized over the years. The promise of the socialist candidate who became president of the republic was not fulfilled. From 15,300 euros before his election, the cap of Livret A . has expired €22950. On the other hand, LDDS doubled, from 6000 €12,000. CEL LIMITED 15,300 EURLEEP 7700 EUR And the youth brochure 1600 EUR.

According to this criterion, it is Plan Epargne Logement (PEL) that proves to be the most beneficial. It allows you to invest up to €61,200 at the current rate of 1% gross, or 0.70% net flat tax. (1). The rate should also rise sharply in early 2023. But with one major limitation: pay at least €540 per year, in monthly, quarterly or semi-annual opportunities.

Accessibility: Liveret . Feature

Brochure A is a file Final comprehensive bank account. Anyone who is on French soil, regardless of age, can own one (only one, dual ownership is prohibited), including La Banque Postale, if they are homeless. It is also open to associations, co-ownership unions, HLM organizations, etc. Household savings (PEL and CEL) are almost universal: they are accessible to all natural persons, even minors.

It is very easy to access, due to its very wide distribution, other organized savings products as well A little more restrictive. To open LDDS, you must be a file individual taxpayer. Thus, minors associated with their parents’ tax family do not have access to it. Livret Jeune is for young people 25 years of age or younger. As for LEP, we have already seen that it is not aimed at the wealthiest families.

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Availability of funds: Avoid ELP

It is no coincidence that Livret A is the defining vehicle for pre-emptive savings. It has the huge advantage of not blocking the amounts placed, which are available at any time and can even be withdrawn from 10 euros.

This availability, however, is not limited to Livret A. It also applies to LDDS, LEP, and Livret Jeune. There is no ban for any CEL, but an upper limit for withdrawals: €75 minimum per withdrawal. For PEL, if funds are also available at all times, Partial withdrawals are prohibited. You will need to close the account to get your money back. This should be avoided, if you want to indulge in it on schedule to cover expenses.

Capital Security: Withdrawal

100% SAFE: When you invest your money in a regulated savings product, you are Make sure you don’t lose a penny capital. The latter is not only guaranteed there, but is guaranteed by the state. There is no difference from this point of view between different products: whatever you choose, structured savings is insurance against all risks.

Use of money: draw

This is the reason for the existence of regulated savings, which explains in particular this state guarantee: to attract deposits that will be used by public authorities for Financing certain public policies of public interest: social housing, city, energy transition, through local authorities, education, mobility, drinking water … From this point of view there is no difference between Livret A, LDDS, LEP, etc.: the money goes in the same amount , called the Provident Fund, managed by the Caisse des Dpts et Consignations (CDC).

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However, this use concerns only a part of the funds placed: 60% for Livret A and LDDS, 50% for LEP, which is approximately 300 billion euros at the end of 2021. The rest – more than 210 billion – is still in operation The balance sheet of the banks responsible for the collection. However, they cannot use it as they like: they have to raise it up. SME Finance, Energy Transition, Social and Solidarity Economy.

Conclusion: What product do you prefer according to your profile?

Don’t have enough cash yet to cap all regulated savings products? Like more than 80% of the French, you’ll likely already have Livret A, which has often been open since childhood to your parents. However, you might be interested in stripping him down to support one of his cousins.

If your reference tax income for 2021 does not exceed the threshold of €20,297Start with a popular savings account, which is the best profitable lot. To find out if you qualify, simply look at your tax notice or, more simply, ask your bank, which is now authorized to question the tax authorities directly. Ironically, it’s the most widely used product: according to the Banque de France regulated savings observatory, only a third of eligible French had one at the end of 2021.

If you are under 25 years oldThink of the Youth Handbook. The applicable rates, which are set by the banks and not by the state, are rising, at the same time as Livret A rates, which cannot legally fall below this.

If you have solidarity fiberschoose LDDS as a priority: it allows you to donate all or part of your interests to associations in the environmental and social sectors.

If you have a lot of cash, put it downFinally, and you want to take advantage of the benefits of structured savings, you have no choice: you have to turn to ELP. However, due to its limitations (imposed incremental payments, impossible partial withdrawals, taxable wage), it may be in your best interest to direct your money toward other, more practical and profitable investments.

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