French savings accounts

[Peterm]

I'm thinking of opening a French savings account in which to stash the extravagant proceeds from the rental of our gite (HA!) While there's lots of information in the UK on comparisons between different accounts French banks etc seem a lot more cagey. Does anyone have any advice on which is the best to go for? I'm UK resident.

 

Peter

[Crevette]

Hi Peter,

The French savings accounts are pretty lousy compared to the UK ones - HSBC currently offer 4.75 for online savings (or 8% for a regular saver giving up to 250 each month for a year).

Even paying tax on the interest made it works out better than most french accounts.

Of course I would be happilly proved wrong!

Regards,

-Rob-

[Clair]

Peter, these are basic savings accounts:

Livret A

LEP (Livret d'épargne populaire)

Codevi

You could also look at ING direct, who offer better rates of interest than the above accounts.

As you're not a French resident, you'll need to read this too: Fiscalité pour les non-résidents

[Owen]

Hello Clair,

If Peter is a tax resident of the UK then I do not see how he can open any of the three accounts you mention.

Regards

Owen

[Clair]

Hi OWen

I thought that too, until I read this section from this page:

[quote]Pour les non résidents

La Directive européenne sur la fiscalité de l'épargne, adoptée le 3

juin 2003, va entrer en vigueur le 1er juillet 2005. Elle vise à

organiser un échange d'informations entre Etats membres, afin de

permettre l'imposition effective des intérêts dans l'Etat où réside le bénéficiaire.

Il ne s'agit pas d'une harmonisation fiscale, puisque chaque Etat

impose ensuite, selon son droit interne, les intérêts perçus par ses

résidents et qui proviennent d'un autre Etat membre. A l'exception de

l'Autriche, de la Belgique et du Luxembourg qui ont choisi un système

transitoire de retenue à la source durant une certaine période, les

autres Etats membres, dont la France, ont décidé de pratiquer l'échange

d'informations. Par exemple, si un Espagnol détient un livret en France

dont les revenus seraient imposés si le livret était tenu en Espagne,

l'établissement français teneur du livret informera des revenus perçus

l'administration fiscale française, qui elle-même en informera son

homologue espagnole.

Cette directive concerne toute personne physique domiciliée fiscalement dans un Etat membre, qui perçoit des intérêts payés par un établissement de crédit établi dans un autre Etat membre. Son champ d'application comprend les titres de créances négociables, les bons du Trésor, les contrats et bons de capitalisation, les bons de caisse, et en général l'épargne à vue et les comptes courants, ainsi que certains OPCVM.

Il comprend également les revenus de la plupart des produits de

l'épargne réglementés, notamment : livret de développement durable (ex

CODEVI), épargne logement (CEL et PEL), PEP, LEP, livret Jeune. Les revenus issus des produits d'assurance (et donc de l'assurance vie), des pensions et des retraites, ainsi que des actions n'entrent pas dans le champ de la directive.

Cette Directive ne change rien sur la fiscalité appliquée en France aux résidents français.[/quote]

I had read it as meaning the French tax people will inform the UK equivalent...

Do you mean that because these are tax exempt accounts in France, they are not available to non-residents?

I know you are better informed than me in this subject and I will gladly defer to your knowedge...[:)]

[Benjamin]

Isn't this just the French Tax Authority explaining how they will deal with accounts held by non residents in line with the European Union Savings Directive designed to stop tax evasion on accounts held in other countries?

For the life of me though I can't see why a foreign national would want to have any more than a minimum balance in a French savings account. [:D]

[Clair]

If you receive Euros for gite rental for instance, it could be easier to stash them in a French savings account for easy access when you're in France...

[Llwyncelyn]

Crevette I do not think that 4.75 is particularly good and 8% brings with it other requirements to buy into other t's and c's. 

For those of us who are over 60 there are better deals that 4.75% in the market place but of course you young things are discriminated against!

[Owen]

Hello Clair,

It may be that you must be fiscally resident in France when you open the account, which I am pretty certain is the case, but can keep such an account if you subsequently move but the interest becomes subject to the tax rules of your new country of residence.

Regards

Owen

[Gastines]

We asked our branch manager if he could better our UK savings interest.Not anywhere near it. Even with their Epargne account you can only put  7500e in it and you can't top it up or add to it after a year. I think it pays 3%. Tax free.

I keep wondering about the schemes they advertise for your Patrimone, invest in property schemes but don't quite get all the small print.

Good article in today's Bournemouth Evening Echo,available on line, about the way UK banks seem to be heading.

Regards.

[Crevette]

> Crevette I do not think that 4.75 is particularly good and 8% brings with it other requirements to buy into other t's and c's. 

> For those of us who are over 60 there are better deals that 4.75% in the market place but of course you young things are discriminated against!

Hi Llwyncelyn,

Could you be more specific?

Even if I can't get "the better deal" now, it will give me something to look forward to when I reach 60!

Many thanks in advance.

[Juswundrin]

Bradford & Bingley IoM offer 5.85% (tax paid gross, usual reporting requirements).

http://www.bbi.co.im/offshore-savings-accounts/offshore-internet-banking/e-access-account.aspx

[suein56]

[quote user="Juswundrin"]Bradford & Bingley IoM offer 5.85% (tax paid gross, usual reporting requirements). http://www.bbi.co.im/offshore-savings-accounts/offshore-internet-banking/e-access-account.aspx [/quote]

And these accounts are not age defined either!

Sue [:)]

[allanb]

You may want to bear in mind that there's a connection between interest rates and exchange rates.  If interest rates on sterling generally are higher than interest rates on euros generally, the market expects sterling to fall against the euro.

Of course, there are other factors.  Rates offered in country A may be better than those offered in country B partly because banks in country A are more competitive, or some accounts may offer lower rates because they come with some kind of tax advantage.

But I would suggest that the first question should be: in which currency do you want to keep your stash?  If you keep it in euros but you don't have any euro liabilities or spending plans, you are taking a currency risk - which is fine, as long as you are aware of it.

If you want to hold euros but you don't qualify for any of the French tax-sheltered accounts, you could enquire about euro deposit rates from a UK bank.

[Llwyncelyn]

Coventry are offering a one year bond which I think equates to 6.15%

We are clients of Coventry but have been send to that city in that now tax resident in France we cannot change our existing deal.  Does that infringe my Human Rights not to obtain the greatest return on my capital?

Of course not but still pretty annoying.

Here I am not sure but I do not think that Coventry have a limiting age factor but the deal is limited to a certain exposure of the assets of the Society.

[Tom]

I'm a  UK resident and have an account with Ing Direct France. You can open one online , although you need to send proof of UK address and id.  It's better interest than a bank deposit account and they offer a bonus rate for the first 5 months.

I transfer a fair amount every now and again when the exchange rate looks good, saving a bit on commission and the wide tourist rate. There's no card but it's easy to go online and move money to a bank current account. 

 

 

    

[Peterm]

Thank you all for your helpful comments!

Clair actually assessed my intentions right. Currently the euro income from our gite goes into our French current account and helps pay for taxe fonciere etc.  There's a little surplus but not really enough to go to the trouble of transferring it back to the UK or converting it into sterling. And of course we do pay tax in France on the gite income.

 

Peter

[BJSLIV]

ING Direct do offer one of the best rates for a French account, unfortunately you can't open an account unless you are fiscally resident in France. They used to let you open one from the UK, but changed the T&Cs a while ago. They allowed existing accounts to continue, but no newcomers.