Introduction
Most people in France still park their savings in the same old places: Livret A, LDD, maybe a PEL if they're feeling fancy about buying a house someday. It feels safe. It's what your parents did. And it works, kind of.
But here's the reality check. Rates haven't kept up with the actual cost of living. Inflation is still eating your lunch money. The government keeps the rates artificially capped. And the banks? They're laughing all the way to, well, the bank. They take your cash, lend it out at 5%+, then graciously hand you back 3%. Guess who pockets that juicy 2% spread?
So what actually pays the best today? And how do these options really work when you strip away the marketing fluff? This guide breaks down each savings path step by step, why it exists, how fast you can open it, how it's taxed, and what you should actually watch out for. If you're serious about yield, you deserve the unvarnished truth.
1. Livret A: The Classic French Safe Bet
The Livret A is basically the financial equivalent of a baguette. It's been around forever (since 1818), everyone has one, and it's... fine. The money you stash there isn't just collecting digital dust. The government scoops it up to fund public housing and infrastructure through the Caisse des Dépôts. Nice of them to tell you what they're doing with your cash, right?
About 80% of French households hold a Livret A according to Banque de France data. It's practically a national obsession. The interest rate gets decided twice a year by government bureaucrats using a formula that supposedly considers inflation and short-term rates. But here's the kicker: they can override their own formula whenever they feel like it. Democracy in action.
The rate calculation is supposed to be scientific: take the higher of either the average of short-term rates and inflation, or just inflation alone. Sounds fair, right? Except they conveniently ignored their own formula during the 2008 crisis, keeping rates artificially low to help their banking buddies. Your purchasing power? Not their problem.
Opening a Livret A is easier than getting a croissant. Most banks let you do it online in 10 minutes. Some old-school branches still make you show up with ID and proof of address like it's 1995. Once the paperwork dance is done, you get interest calculated every two weeks and paid out twice a year. Revolutionary stuff.
Why the ceiling? Because the government doesn't want you getting too comfortable with tax-free money. The €22,950 cap helps them control how much flows into their pet projects. Plus, they'd rather you gamble your excess cash in the stock market where they can tax your gains. That's why smart savers max out their Livret A, then hunt for better options.
Rate: ~1.7% in 2025 (Service-Public.fr)
Limit: €22,950 per person
What's good: State guaranteed, tax-free, instant access
What to watch: Pathetic ceiling, rate lags reality, won't make you rich
2. LDD: The Logical Next Step
Meet the LDD, the Livret de Développement Durable et Solidaire. It's basically Livret A's slightly greener cousin. Same government backing, same rate-setting process, but your money gets funneled into sustainable development projects.
The LDD started life in 1983 as the "Codevi" and got rebranded to sound more eco-friendly. Your deposits help finance renewable energy and social housing through specialized institutions. It's the government's way of channeling retail savings toward sustainable projects while offering modest returns.
The rate follows the Livret A like a loyal puppy. The ceiling is smaller though, so don't expect any miracles. It's basically a €12,000 top-up for people who've already maxed their Livret A and want to stay in the "safe" zone. Opening one is identical to the Livret A process, though some neo-banks skip it because setting up the regulatory partnerships is a hassle.
Pro tip: you can't hold both an LDD and the older LDDS. If you've got some ancient account gathering dust, you'll need to close it first. The bureaucracy is real.
Rate: ~1.7% as of August 2025 (Banque de France)
Limit: €12,000 per person
What's good: State guaranteed, tax-free, instant access
What to watch: Tiny ceiling, same inflation lag, feels like charity work
3. LEP: Best Rate If You Qualify
The Livret d'Épargne Populaire is designed for people with modest incomes who want their savings to actually keep up with inflation. Created in 1982, it offers better rates than other regulated accounts, but you need to meet income requirements to qualify.
The LEP rate includes an inflation premium, which is why it typically pays 1-2% more than the Livret A. Access is restricted by income levels to ensure the benefit goes to those it was designed to help.
You need to demonstrate income eligibility with documentation. The income ceiling is about €21,393 for a single person in 2025 (Service-Public.fr). Many eligible people don't realize this account exists and miss out on the higher returns.
The eligibility check uses your "revenu fiscal de référence" from your tax notice. That includes salary, investment income, rental income, and other sources. For married couples or those in civil partnerships, it's your combined household income that counts.
You'll need your tax notice, ID, proof of residence, and sometimes additional income documentation. Banks verify eligibility both at opening and annually through automatic checks with the tax administration. If your income exceeds the limits for two consecutive years, the account closes automatically.
Rate: ~2.7% in 2025 (Banque de France)
Limit: €10,000
What's good: Actually beats inflation, tax-free, instant access
What to watch: Income snooping required, tiny limit, bureaucratic nightmare
4. PEL: Saving with a Plan
The Plan Épargne Logement is France's version of "we'll help you buy a house, but you'll hate the process." Created in 1969 when people actually believed in long-term planning, it locks up your money in exchange for a fixed rate and the promise of a preferential mortgage.
Here's the deal: commit to saving at least €45 per month for four years minimum. In return, you get a fixed rate that won't change and the right to a mortgage rate that's typically 1-2% below market. The math can work if you actually follow through and buy property.
The trap is obvious: your money is hostage for years. Pull out early and you lose everything, interest bonus, mortgage rights, plus penalties if you bail in the first 18 months. It's like a financial relationship with serious commitment issues.
Opening a PEL involves the usual French bureaucracy: paperwork, ID, proof of address, sometimes income verification. Once you're in, you must keep feeding it regularly or they'll close your account automatically. The banks are strict because they're pre-committing to lend you money at below-market rates later.
Here's the kicker: your rate is locked when you open the account. Open one in 2020 at 1%? You're stuck with 1% even if new PELs offer 4%. That's why savvy people close old PELs and open fresh ones when rates jump. More paperwork, but better math.
Rate: ~1.75% in 2025 (Service-Public.fr)
Limit: €61,200
What's good: Fixed rate, safe, unlocks cheaper mortgages
What to watch: Money jail for years, early exit penalties, rate lottery
5. Money Market Funds: Safe Parking, Not Much Else
Money market funds are conservative investment vehicles that focus on capital preservation. They park your euros in ultra-safe, liquid assets like treasury bills and high-grade corporate paper. Perfect for when you want slightly better returns than a checking account without much excitement.
These funds appeal to businesses parking cash short-term, or individuals who want slightly better returns than a checking account without breaking a sweat. The funds invest in stuff that matures in under a year, often much shorter. When the ECB moves rates, these funds eventually follow along like well-trained pets.
You can invest through your bank, broker, or various investment apps. Most French banks push their own money market funds, though their fees can be criminal. Independent fund companies often deliver better net returns, assuming you can navigate their websites.
The reality check: returns get taxed as investment income. You'll pay the 30% flat tax on gains, or opt for progressive income tax if that's somehow better. Either way, it's nowhere near as tax-efficient as the regulated accounts.
Rate: ~1%–2%
Limit: None
What's good: Liquid, low risk, institutional grade
What to watch: Taxed to death, returns barely exist, management fees
6. Bonds & ETFs: A Bit More Yield, A Bit More Risk
Welcome to the world where you might actually earn something meaningful. Corporate and government bonds can deliver 2%–5% yields, depending on who's borrowing and for how long. Investment-grade corporate bonds pay more because there's actual risk the company might implode.
You can buy individual bonds through your bank or broker, though they usually demand larger minimums (often €1,000+ per bond). Bond ETFs are more democratic, letting you spread risk across dozens or hundreds of bonds for the price of a decent dinner.
The catches are real: credit risk (companies can default) and interest rate risk (bond prices drop when rates rise). Hold to maturity and you'll get your money back, assuming no bankruptcy. Need to sell early? Welcome to market pricing.
Tax treatment depends on how you structure things. Direct bond purchases get taxed as investment income. Hold them through a PEA or assurance vie policy and you might catch a tax break. The French love their tax optimization schemes.
Rate: ~2%–5%
Limit: None
What's good: Real yields possible, variety of risk levels, can hold to maturity
What to watch: Taxed normally, prices bounce around, companies can fail
7. Neo-Bank Savings Pots: Handy, But Modest
The new kids on the block offer "instant savings" pots that pay slightly more than traditional checking accounts. Revolut, N26, Bunq and others have figured out that people will settle for convenience over yield.
Revolut's Instant Savings in France pays around 2.25%–3% depending on how much you pay for their premium plans. N26's Spaces feature offers similar rates. Bunq's Easy Savings hits about 2.15%. These rates change whenever they feel like it since there's no government regulation.
The appeal is pure convenience. Move money between spending and saving instantly through the app. Some offer automatic round-ups or scheduled transfers. It's banking for people who live on their phones.
Reality check: these aren't French deposit accounts. They're usually held through partner banks in Germany or Lithuania, covered by those countries' deposit insurance. The protection is equivalent, but the legal framework is different. Your euros are tourists.
Rate: ~2%–3%
Limit: Often none, but some caps for premium rates
What's good: Digital native, flexible, instant transfers
What to watch: Still bank custody, modest yields, foreign legal jurisdiction
8. Assurance-Vie: The French Favorite
Assurance-vie is basically France's national obsession. With nearly 2 trillion euros in assets, it's the country's most popular investment vehicle. Think of it as a Swiss army knife for your money: tax shelter, investment platform, inheritance planning tool, and emergency fund all rolled into one.
Here's how it works: you open a contract with an insurance company and choose between two types of investments. Fonds euros are the safe option, capital guaranteed, typically invested in government bonds and high-grade corporate debt. Think of them as souped-up savings accounts. Unités de compte are the risky siblings, invested in stocks, bonds, real estate funds, or whatever else you fancy.
The magic happens with the tax treatment. After eight years, you can withdraw up to €4,600 per year (€9,200 for couples) completely tax-free. Before eight years, you pay the flat tax of 30% only on gains. Compare that to regular investment accounts where you get hammered with taxes from day one.
Current performance varies wildly by contract and strategy. The average fonds euros paid about 2.5% in 2024, with the best contracts hitting 3.6% or more. That's after management fees but before personal taxes if you withdraw early. The catch? These guaranteed funds are trending downward as government bond yields fall.
Unités de compte delivered an average of 4.1% in 2024, but that comes with real risk. Your capital isn't guaranteed, and you could lose money if markets tank. The appeal is higher long-term returns and protection against inflation.
The flexibility is unmatched. You can switch between safe and risky investments tax-free anytime within your contract. Need cash? Partial withdrawals are allowed without closing the whole thing. Want to leave money to heirs? Assurance-vie has preferential inheritance tax treatment.
Rate: ~2.5% (fonds euros) to 4%+ (unités de compte) depending on allocation
Limit: None
What's good: Tax efficient after 8 years, flexible, inheritance benefits, wide investment options
What to watch: Fees vary dramatically by provider, fonds euros yields falling, unités de compte carry risk
9. Traditional Bank Current Accounts: The Reality Check
Let's talk about the elephant in the room: your regular checking account at traditional French banks. The one where your salary lands every month and your rent disappears from.
These accounts pay basically nothing. We're talking about 0% to maybe 0.1% if you're lucky and have negotiated with your banker after threatening to leave. Even the "premium" accounts with fancy names and higher fees rarely break 0.5% on your balance.
Why do banks get away with paying so little? Because they have a captive audience. Most people need a current account for daily life, and switching banks in France remains a bureaucratic challenge despite regulations meant to make it easier. Banks know customer inertia is real, so they have limited incentive to offer competitive rates on current accounts.
Your money sits there, slowly getting eaten by inflation while the bank lends it out at 4-5% for mortgages and business loans. They pocket the spread and throw you a few euros per year in "interest" if you're lucky. It's the financial equivalent of crumbs from the master's table.
Some banks offer tiered interest rates where larger balances earn slightly more, but the returns remain quite modest. A €50,000 balance might earn you €100 per year before taxes. Meanwhile, that same money in a decent assurance-vie or even Zeal could earn you €1,250-2,500 annually.
It makes financial sense to keep only what you need for daily expenses and emergencies in a current account. Yes, you need some cash for monthly expenses and unexpected costs. But keeping large amounts beyond this creates an opportunity cost where inflation gradually erodes your purchasing power.
Rate: ~0% to 0.5%
Limit: None
What's good: Instant access, comes with debit card, required for daily banking
What to watch: Low returns, inflation eats your money, fees often exceed interest earned
10. Zeal: What Self-Custody Changes
Time to talk about cutting out the middlemen entirely. Zeal isn't a bank account, it's a self-custodial smart wallet that lets you do what banks have been doing for centuries: lending money at market rates and keeping the profits.
When you deposit euros, they convert into euro-pegged stablecoins that get lent out on blue-chip DeFi platforms. The difference? You see the full yield that comes from actual market demand for borrowing, not the trickle-down version banks offer after they've taken their cut.
Rates have averaged 4%–5% over the past year, fluctuating with real market demand for borrowing. You watch your balance tick up every second with continuous compounding, not the twice-yearly charity payments from traditional accounts.
No crypto PhD required. Zeal uses passkeys tied to your biometrics, so no secret phrases to lose or hardware wallets to break. Spend normally with the Zeal Visa card. When your balance drops below your target, it auto-recharges from your earning account.
The insight is simple: banks take your deposits, lend them out, and pocket most of the spread. They've been running this game since before your great-grandparents were born. Zeal just lets you play directly instead of getting the consolation prize.
Rate: ~4%–5%
Limit: None
What's good: Self-custodial, real-time compounding, instant access, actual market rates
What to watch: No government safety net, protocol risks exist, tax implications vary
11. Numbers Side by Side
Final Word: Stop Getting Played
If you want the safety blanket, Livret A and LDD will tuck you in nicely. LEP is solid if you qualify for the income-limited club. PEL works if you actually plan to buy property and don't mind financial handcuffs.
But if you're tired of watching banks get rich off your money while handing you peanuts, there are better ways. The regulated accounts offer safety and tax perks, but they cap your upside harder than a nightclub bouncer. The investment options give you more potential, but come with complexity and tax bills.
Zeal offers a third path: direct access to the same lending markets banks use, except you keep the full yield instead of the scraps. It's not a government-backed safety net, but it's also not a rigged game where you're guaranteed to lose to inflation.
The banks have been profiting from the spread between deposit and lending rates for centuries: take deposits at low rates, lend at high rates, keep the difference. Traditional banking has always worked this way.
It's time to explore alternatives that give you more control over your returns.
This content is for educational purposes only and should not be considered personalized financial advice. Always consult with qualified financial professionals before making investment decisions.
Sources: Banque de France, Service-Public.fr
