Less known than Livret A, Livret Jeune or bank savings accounts (Livret B), although with a fee of 4.6%. There are conditions that must be met to take advantage of this investment, which is exempt from taxes and social security contributions.
In these times of rising inflation, trying to mitigate the impact on your savings is not easy, especially when your ability to save is limited.
There is a solution: the People's Savings Account (LEP). Available to all depositors subject to meeting income conditions, the yield was 4.6% from 1 August.
According to the Banque de France, 18.6 million French people can use it, but only 37% have already opened it.
Conditions for opening an account
Well-paid savings for the target audience. The LEP is intended for taxpayers, taxable or not, whose resources are below certain ceilings.
To sign up this year, your 2020 basic tax income (RFR) must not exceed €20,297 if you are single, €25,717 if you are single with a child, €31,137 if you live as a couple (married or PACS).
Calculated by the tax authorities, the RFR is indicated in the tax notice. It takes into account all income of a tax household.
For whom
A LEP is a smart investment for a young person who is no longer part of their parents' tax household and is just starting their working life.
This is also interesting for a retiree whose resources have diminished. Payment terms are reasonable: a minimum of 30 euros upon opening, then a minimum of 10 euros for payments up to 7,700 euros.
Profitability
The LEP's rate of return is always higher than that of Livret A. The strictly regulated method of calculating the LEP's rate of return is based on the Livret A rate and depends on these quarterly updates, but ultimately the result is always in favor of the LEP.
Taxes
Another advantage: profits are not taxed. They are completely exempt from income tax and social contributions.
The only drawback is that you cannot own it permanently, as the terms depend on your income.
If you fail to comply with the conditions for two years in a row, the savings account is closed by you or at the request of the bank.
A closure that doesn't mean you won't be able to open a new LEP in the coming years as long as you meet the income requirements.
During your life as a saver, you can open as many times as you meet these conditions, but no more than one at a time and no more than two per household.
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