Christine, reader of Capital, asks us the following question: “Good morning. I was contacted by my advisor about my home savings plan which must be closed in March 2026. My PEL was opened in March 1995 and produces interest of 3.84%. Can you please tell me what is wise to do?”
Hello Christine, and thank you for your question, which will allow us to remind you which Housing Savings Plans (PEL) are affected by this automatic closure. The excellent news for you is that your plan, opened in March 1995, is an “old” PEL, which benefits from much more advantageous regulations than plans opened after March 2011. To answer you straight away, your PEL is not subject to the automatic closure rule after 15 years.
Your 3.84% PEL does not have an end of life date
Contrary to what your bank advisor apparently told you, the rule of automatic closure after 15 years only applies to PELs opened from March 1, 2011. PELs opened in 2011 will therefore be closed from 2026. Your PEL from March 1995 does not have an expiry date. It will continue to produce interest at the guaranteed rate of 3.84% gross until you decide to close it yourself.
Given the current environment of secure savings rates, maintaining such a return is therefore rather advantageous. The Livret A has been paid at 1.7% since August 1, the Livret d’épargne populaire (LEP) at 2.7%, and we anticipate an average rate of 2.65% on life insurance funds in euros this year.
However, be careful with taxation. If your PEL is more than 12 years old – which is the case since it was opened in 1995 – the interest produced is now subject to the single flat rate levy (PFU, or flat tax) of 30%. Which means for you a net rate of 2.69%.
You can no longer make payments to your PEL
On the other hand, payments into a PEL are only possible for 10 years. Your plan having been opened in 1995, this payment period ended in 2005. You can therefore no longer pay money into your PEL. It is also possible that your bank will encourage you to close this old PEL, which is costly for it due to its rate.
As it stands, Christine, if you are not looking for a more profitable investment, keeping your old PEL remains the best option. You could possibly consider opening life insurance in euro funds. It would be possible for you, for the same level of risk, to aim for an equivalent return, and to have a more advantageous savings product if you wish to pass on your capital upon your death.
>> Our service – Test our life insurance comparator
Capital answers you
Do you have a question about your life insurance contract, your savings accounts, your real estate investments? Ask our expert who will answer you: [email protected]
