Living in France

Banking in France

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Have you just arrived in France ? Are you finding terms such as carte bleue, IBAN and Livret A confusing ? Let us guide you through the French banking system !

Current accounts

In France, anyone can hold one or more current accounts. An account is essential if you reside in France for more than 3 months and are employed.

Opening an account

The bank requires a number of documents to open your account :

-  valid proof of identity,
-  proof of residence in France (e.g., lease, electricity or water bill),
-  a valid residence permit (if applicable).

Using your account

In France, current accounts normally do not earn interest. Essential services such as bank statements and chequebooks are free, but a fee is generally charged for other services :

-  Bank cards and insurance are billed annually.
-  Transactions (e.g., transfers, automatic payments) are billed on a per-item basis.
-  Banks often bundle services for day-to-day account management. Billed monthly, these packages usually include Internet and sometimes mobile phone banking as well as overdraft protection.

International Bank Account Number

The International Bank Account Number (IBAN) is a standardised account number used in all European Union countries for transactions such as transfers and payments. Comprised of a country code (FR76 for France) followed by 23 digits, an IBAN allows you to communicate your banking information to creditors (e.g., telephone company, Internet service provider, utility, tax office) and establish pre-authorised payments. It is common practice in France for creditors to transfer bill payments automatically from your account to avoid late payment and interruption of service.

Banking services

Managing your account

Bank branches are usually open between 9 a.m. and 5 p.m., Monday through Friday. Some branches may open Saturdays or open earlier or close later 1 day each week.

Online banking is generally available throughout France. All banks offer the opportunity to view your accounts, make transfers, request chequebooks and manage stock portfolios online through a secured connection.

Insurance

Most banks also offer insurance policies, including home, vehicle and supplemental health insurance. Consider purchasing insurance when you open your account for one-stop management of your banking and insurance needs.

Means of payment

In France, consumers prefer using cards or cheques for most purchases and tend to pay cash only for small sums.

Bank cards

Bank cards use computer chips that require a secret PIN code to validate all operations, from cash withdrawals at automatic teller machines (ATMs) to in-store payments.

Bank cards may be direct debit (the account is debited the same day as the transaction like a chargecard) or deferred debit (all payments are accounted for and debited once a month). Each card has weekly and monthly limits for payments and withdrawals.

The most common bank card in France is not a “credit card”, but rather a debit card that deducts withdrawals and payments directly from the account balance. Credit cards with renewable monthly limits are also available.

Cheques

Cheques are used widely in France. Banks provide chequebooks with 20 detachable cheques free of charge. The account owner fills in the amount and beneficiary of the payment. Vendors often request proof of identity to verify that cheques have not been stolen. Two pieces of identification may be required for large sums.

Certified cheques/ Bankers draft for large purchases

Certified cheques are issued at the request of account holders. Banks guarantee payment of a certified cheque by removing funds corresponding to the value of the cheque from your account. Vendors often require certified cheques for large purchases such as real estate or a vehicle.

Transfers

Bank transfers are a way of moving funds between accounts. Transfers require the IBAN of the beneficiary and must be requested online or at your bank branch.

Standing orders and direct debits enable you to schedule regular payments (e.g., to your landlord or Internet service provider’s account each month).

Stop payment

If you misplace a bank card or cheque, or are a victim of theft, immediately request a “stop payment” from your bank to prevent fraudulent use of your account. Thefts should also be reported to the police.

It is common in France to purchase an insurance policy to protect against “loss or theft of a means of payment”, which covers fees associated with a stop payment and card replacement.

Savings

Savings accounts

Savings accounts are the most popular savings option in France. Deposited funds earn modest, but guaranteed, returns and can be withdrawn anytime. Some accounts, such as Livret A and Livret de Développement Durable (sustainable development savings account), are tax-exempt and pay interest rates backed by government decree.

-  Livret A has an unlimited duration and a deposit limit of €15,300.
-  Livret de Développement Durable has a deposit limit of €6,000.

Long-term savings

If you plan to reside in France for some time, you can opt for long-term savings products such as life insurance or Plan d’Epargne en Actions (stock savings plans). These products enable you to invest in numerous markets and offer higher or lower risk and return potential, depending on your investment objectives. Both products offer tax advantages if the investment is held for a specified duration (a minimum of 8 years for life insurance and 4 years for stock savings plans).

Loans and mortgages

Personal loans

Personal loans can finance a specific purchase (e.g., vehicle, equipment) or be used for an unspecified purpose.

In general, they are repayable within a relatively short period (3-72 months) with regular monthly payments.

The bank usually charges an administrative fee and strongly recommends purchasing death/disability insurance.

Mortgages

Intended to finance real estate projects, these long-term loans can extend up to 30 years in France. Learn more about buying a home in France

“Green” loans

Are you planning energy efficiency improvements to your home (e.g., installing a condensation boiler, solar panels or insulation) ? Loans for energy conservation projects are available at preferential rates. You may also be eligible for tax credits on 15-50% of the cost of your project.