Deposits Livret A and Livret développement secure et solidaire (LDDS “sustainable development deposit”) belong to a large family of regulated savings accounts - deposits. They have a lot in common, but at the same time, there are also differences. Let's figure out what they are.
What do Livret A and LDDS have in common?
Their similarities are undeniable. Positive aspects of opening:
- high liquidity,
- Deposit transactions are free,
- interest is exempt from income tax and social contributions,
- state guarantee of the entire deposit amount in case of bank bankruptcy,
- equal profitability, which is set by the administration.
The disadvantages are also common:
- The interest on deposits is below inflation. This means that if your goal is to accumulate and/or preserve capital, this solution is not suitable.
- In the event of the death of the account owner, they will be blocked for 6 months - this is the waiting period for heirs, which is established by law.
- Both accounts fall into the probate estate. This means that the heirs will have to pay the notary's costs for the distribution of the inheritance and inheritance tax.
Savings with a tax-dispositive “Life Insurance” Assurance Vie do not fall into the estate and do not have to pay tax on them (subject to certain conditions). In addition, you will not have to wait 6 months to gain access to the inheritance. If you choose the right company, you can make decent money on your deposits. Sign up for a consultation, I will tell you more about everything.
What are the differences
Opening conditions
The red Livret A savings book is available to people of any age. The only condition for opening it is to deposit a minimum amount of 10 euros, which is reduced to 1.5 euros at Banque Postale.
Golden Rule
Regarding LDDS, this product is intended for adults. A minor who is tax resident in France can also open a sustainable development contribution, but subject to strict conditions. To open a deposit, he must have personal income and, for tax purposes, no longer belong to his parents’ household.
The law does not determine the size of the minimum down payment amount, but in practice most banks set the threshold at 15 euros.
In both cases, the opening conditions correspond to the golden rule: one person - one deposit of this type.
Maximum deposit limit
Another difference is the ceiling on deposit amounts for these two products.
- Deposits placed with Livret A cannot exceed 22,950 euros (excluding interest) and 76,500 euros for the association.
- The threshold for Livret LDDS is set at €12,000.
In general, a depositor can deposit up to 34,950 euros (excluding interest).
Solidary donations
On December 9, 2016, the law loi Sapin II, concerning transparency, anti-corruption and economic modernization, marked the LDD with the letter S, meaning "solidarity". However, it took four years for the added letter to actually take effect.
In fact, from October 1, 2020, the owner of an LDDS can direct part of his savings to the benefit of social and solidarity economy actors - as provided for by the loi ESS law of July 31, 2014 - in the form of a donation. The investor has two options: donate part of his capital, part of the interest, or all the interest.
Your bank should offer you a list of at least ten social and solidarity economy companies every year. And once you provide the name of the selected companies and the amount of donation, the bank can make the payment directly from your LDDS, bypassing your checking account. Such an opportunity is not provided by the Livret A deposit.
Popular deposits
Very popular among savers, Livret A and LDDS collected €35.2 billion in 2020, up from €16.6 billion in 2019. But they failed to beat the 2012 fundraising record of 49 billion euros.
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