Savers looking for a way to protect their Euro held capital against the ravages of inflation are faced with relatively few options, particularly if they do not want to be exposed to the vicissitudes of the stock market.

The first port of call has of course to be the tax-free regulated savings accounts in France. The 'Livret A' and the 'Livret de développement durable et solidaire (LDD)' savings accounts currently pay 3% interest and for those on a modest income, the means-tested 'Livret d’Epargne Populaire (LEP)' pays a whopping 6.0%.

However, the accounts are subject to maximum capital deposits, in the case of the Livret A it is €22,995.

Fixed Term Accounts

For those in the fortunate position of having additional capital to invest, a fixed rate minimum term savings account may be a suitable additional option.

These accounts, called 'Comptes à Terme (CAT)', have offers up to 3.25% interest gross over three years.

The banks are free to set their own terms for such accounts, so rates and terms will vary. In general, however, the longer the term the higher the rate of interest offered. Some banks offer a progressive rate based on the amount and length of term, whilst others offer a variable rate which is index based. In general, however, a fixed rate offer is the most common.

That being the case, if a saver withdraws funds before the end of the term, there will be a penalty that applies, often a reduction in the interest. There are no charges for opening such an account.

The duration of the term can be anything from 3 months to 5 years, although most are up to 1 year.

Interest is payable on a periodic basis, depending on the account and sometimes the choice of the saver.

The accounts are also subject to minimum and maximum deposits, which vary according to the offer and the bank.

The sums in the accounts are guaranteed, except in the unlikely event of the liquidation of the institution, when the banking deposit guarantee scheme would be triggered, which guarantees €100,000 per saver per bank. In practice, the French government would almost certainly step in to guarantee all deposits. See our piece How Safe is Your Money in a French Bank?

Unlike regulated savings accounts, tax and social charges are payable on the interest, at the rate of 30%, or by option the marginal rate of income tax of the saver, if this is lower. The fixed rate of 30% is made up of 12.8% income tax and 17.2% social charges.

Offers

The best offers are not being made by the main High Street banks, so as a general rule it is necessary to use an on-line bank, many of which are subsidiaries of the main banks.

One of the best offers around is from Boursorama, the on-line bank of Societé Générale. The minimum initial payment is €5,000 with rates of 3% for 12 months and 3.5% for 18 months, which is forfeit upon early withdrawal.

Distingo (formerly PSA Banque) offer a CAT that requires an initial deposit of €1,000 and offers 2.7% (12 months), 2.8% (24 months) or 2.9% (36 months). The maximum deposit is €100,000.

Crédit Municipal de Paris requires an initial deposit of €1,500 and offers 2.65% (12 months), 2.7% (24 months) or 2.5% (36 months). They do not charge for early withdrawal of funds.

Fintechs

In addition to the main banks, some of the money transfer providers have also recently started offering savings accounts.

Unlike the banks, the deposits are not guaranteed by the deposit guarantee scheme, and the rate offered is subject to change.

So there is a greater level of risk, but two of the main offers from Wise and from Revolut have substantial institutional backing.

Revolut offers 'Saving Vaults' which pay interest of 3.55% variable with no penalties for withdrawing at any time. Interest is paid daily.

Wise also offers savings accounts with variable interest rates, currently 4.64% (Sterling) 4.33% (USD) and 3.19% (Euros).

As usual, the information provided above is for general guidance only.