As of 1st October, account holders in France can now keep up to €10,000 in a Livret d’Epargne Populaire savings account, up from €7,700.
The French Livret d’Epargne Populaire (LEP) is a state regulated saving account intended for individuals with modest incomes. Up until 1st October, the cap on the amount of money legally allowed to accrue in one of these kinds of accounts was €7,700, but that has been increased to €10,000 following the passing of an official decree on 29th September.
WHY AN LEP?
LEPs only require a €30 contribution to open an account, making them a great way for many to start saving. People can only hold one of these types of accounts, but two people in the same household can each have their own.
These savings accounts currently have a remuneration rate of 6%, which is fixed until 31st January 2024. Interest paid on LEPs is exempt from social security contributions as well as income tax, and is paid out on 31st December of each year, even when the deposit threshold is reached.
The 2022 annual report from the Banque de France published this July found that nearly half of the LEP accounts in operation had exceeded their regulated limit of €7,700, thus putting the wheels in motion to raise the amount to €10,000.
Once this cap is reached, it will no longer to possible for the account holder to deposit any further sums, even if the interest paid out is the reason for reaching the monetary ceiling.
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Photo source: Markus Spiske, Unsplash