Livret A, popular savings (LEP), sustainable and solidarity development (LDDS)… These savings products are the best known, and among the most interesting in this period of highs. However, they all have a ceiling. And even if it is sometimes increased, as was the case for the LEP at the beginning of October, it can quickly be reached. If you find yourself in this situation and you have some savings left, there are several solutions available to you. Among them, term accounts (CAT).
Rates up to 4% or more
What is it about ? First thing to know: everyone can open a CAT, provided they are of legal age and have bank accounts in France. These savings accounts had fallen into disuse for several years, due to relatively low rates which did not make their returns very attractive. “But since these rates were raised in order to counter inflation, CATs have seen renewed interest”notes Adeline Moisiard, marketing director of the banking rate comparator Panorabanques.
And for good reason: while also being risk-free savings products, the remuneration rates they offer are attractive. Often higher than that of Livret A, frozen at 3% until February 2025. “Among the CATs, there are many offers whose rate rises to 4%, or even more”, notes the expert. Another advantage: the ceilings of these accounts are very high. Often several hundred thousand, even millions of euros.
Read also: Livret A accounts down in October, record level for popular savings accounts
Money is blocked
It all seems almost too good to be true. And indeed, the CATs have some counterparts. The first is the fact that unlike other investments, the payment into a CAT is unique, and for a defined period. The account cannot be replenished nor the money recovered before the end of this period. Or, with early exit penalties that reduce yield. “When we decide to invest in a CAT, we must be certain that we will not have to use this money within the defined time”advises Adeline Moisiard.
This funds blocking period must be determined at the time of opening the account, and fluctuates depending on the offer chosen. Generally, it lasts from a few months to 5 years. Please note that in some cases the rate of pay is progressive. That is to say that the remuneration of savings increases in stages, over time. For example, Monabanq’s five-year plan is remunerated at 1.60% in the first year, 2.30% in the second, 3% in the third, 3.40% in the fourth and finally 4.80% in the fifth.
Interest is subject to tax
Another difference compared to traditional booklets: each CAT presents a minimum payment amount upon subscription. This varies depending on the bank and the offer chosen. It can range from a few hundred euros to several thousand. Finally, term accounts are taxed. That is to say, the interest paid is subject to income tax and social security contributions. “In their calculation, it is necessary to deduct the 30% corresponding to the flat tax, while the interest on the savings accounts is net”explains Adeline Moisiard.
For this specialist, CATs represent a particular interest in certain situations. “If you have just acquired a large sum of money, through an inheritance or the sale of real estate, and you do not plan to spend it, the CAT is an excellent way to make it grow”, she illustrates. The rate determined at the time of opening being fixed, it is even particularly interesting to open one today, when rates are high.
Various offers, and even abroad
It remains to be determined on which CAT to place your money. Every bank, whether retail or online, offers them. Traditional banks generally promote them less, so you must contact an advisor for information. Online banks, on the other hand, make it a flagship product, making their offers more visible. And sometimes interesting. Panorabanks studies and compares them permanently.
Adeline Moisiard discusses in particular the offers offered on the Raisin platform. The latter provides access to CATs and other dematerialized passbooks from around ten European banks. Swedish, Belgian, Slovak, Czech… Some are particularly attractive, like that of the Swedish bank Klarna and its rate of 3.96% in the first year.
“We must always first take an interest in what we are putting our money on. But although abroad, these investments remain risk-free”, explains the expert. The account is always protected by the deposit guarantee fund of the country to which the bank depends. In the event of bankruptcy, the customer is then reimbursed up to the amount set by this deposit guarantee. For Sweden, for example, it is 1,050,000 crowns, or around €90,000. Generally, on Raisin, the payments that can be made to a bank’s CAT do not exceed the amount of the deposit guarantee of your country.