Savings accounts

[sueyh]

We have approximately £20,000 in an endowment maturing in December, does anyone know what the best option for a savings account or similar in France would be?  Or would we be better off investing it in the UK?

Thanks

Suey

[Judith]

If you don't need the money in the UK (do you intend to return to live there, for example, in later life), given the appalling interest rates and the poor exchange rate, I would suggest keeping it in France.  You can have 15,300€ in a Livret A which is tax free, which covers much of the money you have, and though it won't earn you lots, it is secure and at the moment is 1.75% (I think) whereas in the UK you are lucky to get 1%. 

This is my personal opinion only, and I am not a financial adviser, but it's what I'd do with it!!

[Pickles]

Assuming that the money is in the UK and sterling-denominated, at present you can get around 2.89% max (for instant access - you can get up to 4.8% if you are prepared to lock it away for 5 years)  in the UK, and this would be taxable in France if you are resident there. The issue really is whether you want to crystallise the exchange rate by transferring the money into Euros or whether you would prefer to leave it in £. If you transfer it into euros then as Judith says you can get 1.75% tax free in a Livret A, or if you can leave it alone for a while, then a PEL or assurance-vie (fonds en euros) will give you a better tax-free return.

Regards

Pickles

[tonyinfrance]

I'm not a financial adviser but my instinctive reaction would be to keep it in sterling: reading between the lines you do not have an immediate need for the money and if you can afford to tuck it away for at least a year you should be able to match inflation......

[Chardie]

A lot of the UK savings accounts will stipulate that to take out for example a fixed rate bond  you must be uk resident (presumably fiscally speaking). Therefore the better paying savings vehicles will not be open to you if you are fiscally resident in france. I am sure there are a lot of people who just ignore the small print where it says that you should be uk resident as it is generally in the terms and conditions - but thought I would point it out. Off shore savings rates are poor from my searches on the internet . 

[Will]

There is no one-size-fits-all answer. A lot depends on your tax position.

You may also need to consider things like inheritance issues and the French wealth tax, not only interest rates.

[sueyh]

We are resident in France, however my husband pays tax in the UK as he has a public services pension. 

Suey

[Pommier]

The other thing to consider is whether you think sterling will do better or worse than the euro.

[cooperlola]

[quote user="sueyh"]We are resident in France, however my husband pays tax in the UK as he has a public services pension. 

Suey
[/quote]The tax and social charges on any interest would  be payable here, not in the UK, no matter where the tax is paid on a pension because this is where you live.  You would need to declare it on your annual French tax  return.

Others have given you better advice than I ever could upon where to invest your money but to my mind, as said above, the fluctuating exchange rate could be as big a factor as the interest rates at the moment in your choice. 

[AnOther]

If you have any UK debts such as mortgages, credit cards, car HP etc. then paying them down might be the best use for the money.

Speaking entirely from a personal perspective if I used such a sum for such purposes I might just forget to put it on my tax return [:$]

[cooperlola]

[quote user="AnOther"]
Speaking entirely from a personal perspective if I used such a sum for such purposes I might just forget to put it on my tax return [:$]

[/quote]Surely the tax would only be due on any interest anyway (I don't know the rules covering endowment payouts over here so don't know this for a certainty)?  I agree, this is always the best use of a lot of cash to my mind - but it assumes you have debt - something which many have managed to escape by coming to live over here and dumping (as in our case) a massive UK mortgage.

[val douest]

Just recapping on the Livret A - you can each have one so the maximum amount you can invest between you is €30,600 (excluding any interest).  The interest is tax free and exempt from social charges.  Although the rate of return is under 2% at the moment, it has just gone up so at least is heading in the right direction.

Val

[Mikep]

Your biggest risk is adverse currency movements, whatever you choose to do. I'd be inclined to move half into euros, so whatever happens your glass is half full. I appreciate this is not logical (the glass will also be half empty) but it just feels better afterwards.

[pachapapa]

The Generalitat de Cataluñya will be offering one year bonds at 4.75%, next week, minimum take up € 1000.

[AnOther]

Have you got a link for that ?

[Benjamin]

[quote user="pachapapa"]The Generalitat de Cataluñya will be offering one year bonds at 4.75%, next week, minimum take up € 1000.[/quote]

Erm........[8-)] Spanish local Government bonds?

Rather you than me.  [:D]

[AnOther]

Should compliment my Greek, Portugese, and Irish ones nicely then [:D][:D][:D]

[Pommier]

Why no Italian ones?

[pachapapa]

[quote user="AnOther"]Have you got a link for that ?
[/quote]

http://www.20minutos.es/noticia/838561/0/generalitat/emision/bonos/

[Jako]

[quote user="AnOther"]Should compliment my Greek, Portugese, and Irish ones nicely then [:D][:D][:D]

[/quote]

Those  bonds are denominated in a currency that is not created by the billions "out of the blue" , like "strong" sterling or "strong" dollar.

Like the Chinese, I prefer any Euro bond to sterling or dollar denominated gilts any time.

A 3 year UK 2007 gilt bought for a 100.000 euro in 2007 pays you  75.000 euro today.

Oh what a jolly investement, much better than Greek bonds, lets invest in UK gilts again [6] NOT

[Herry00]

Savings accounts are beneficial for those who don’t want much interest rate.There are many other options rather than savings account.

[Stan Streason]

The exchange rate has fluctuated by nearly 20% either way over the last 18 months or so and will do so again given time.  I would keep it in sterling but set a rate in your mind at which to translate it.    If todays rate is 1.135, if you translated at 1.22 that is a 7.5% increase (tax free).  You will be unlucky if it doesnt touch that again at some point in the next 2 years.  Meanwhile you are still earning interest on your sterling deposit.

[sueyh]

Thanks everyone for your advice.

Suey

[Aidie]

"Savings accounts are beneficial for those who don’t want much interest

rate.There are many other options rather than savings account."

Can you give some examples (not high risk ones)?

[parsnips]

[quote user="Aidie"]"Savings accounts are beneficial for those who don’t want much interest

rate.There are many other options rather than savings account."

Can you give some examples (not high risk ones)?

[/quote]

Hi,

       Assrance Vie Guaranteed Euro funds are risk-free, the 3.5% to 4.5% interest is locked in each year.  To avoid paying up-front fees go for an internet based contract like "Fortuneo" or "Linxea" which also have no switching charges and very low management costs, because of this you can use them as a short/medium-term savings account which you can manage yourself on-line, but any surplus can form the basis for long-term saving at a good rate. There are considerable tax and inheritance advantages.