The LDD (Sustainable Development Booklet) has existed since 2007. This placement works in the same way as a livret A. Some holders would like to open several LDDs in several banks, but is this possible? We answer all your questions: What is an LDD? What is it used for ? What are the conditions for opening and closing the booklet? Can we have several LDD in several banks?
What you need to know about the LDD: principle and operation
The Sustainable Development Booklet (LDD) became the Sustainable and Solidarity Development Booklet (LDDS) in 2017. This is an investment whose operation is very similar to that of booklet A.
The LDD is a savings account remunerated at a rate set by the government. And funds are available at any time. In addition, all banks can offer the opening of a LDD with possession of a bank card to make withdrawals from distributors.
The LDD has an annual interest rate of 0.75%. It has also been capped at 12,000 euros since 1er October 2012. It is also exempt from income tax and social security contributions.
To open an LDD, it is generally sufficient to deposit 15 euros. Then, deposits and withdrawals are free.
Finally, note that the opening of an LDD, deposits and withdrawals as well as closing are free services. No fees will be charged to you.
Is LDD really for sustainable development?
This is a perfectly legitimate question that the holder of an LDD or LDDS may ask. Does LDD money really benefit sustainable development?
Know first that the LDD was launched in 2007 to replace the Codevi (Industrial Development Account) which then provided resources to industrial companies. If the LDD pursues this objective, it is also used for energy saving work in housing.
To be more precise, the funds collected by the LDD are merged with those of the livret A and more than 59% centralized in the savings fund of the Caisse des dépôts (decree of July 30, 2013). This savings fund contributes to the financing of social housing, the rehabilitation of old habitats, the construction of housing for disabled people or sustainable infrastructure… As for the decentralized part, it is used to finance the work of economy energy of individuals.
LDD Rate Calculation
You may be wondering how the LDD rate is calculated. In fact, the principle is the same as for the booklet A rate.
The LDD rate can be modified twice a year, on the 1er February and 1er August. Its calculation then follows the rate of inflation increased by a quarter of a point. To avoid any sudden variation, the rate is smoothed over six months.
Note that a new reform of the calculation of the rate of the booklet is planned for February 2020. The rate of the booklet A and the LDD will be fixed as the half-yearly average of inflation and short-term interbank rates. The rounding will then be calculated to the 10th nearest point, with a threshold at 0.5%.
The conditions for opening and closing an LDD
Opening an LDD: how to do ?
To open an LDD in a bank, you just have to be of legal age and French tax resident. And you must not already hold an LDD. Note that spouses or PACS partners subject to joint taxation can each hold an LDD.
On the other hand, even if the law does not impose a minimum initial payment, most banks require a deposit of 15 euros when opening the booklet. The following deposits are then free.
Then, the bank can give you a bank card linked to your LDD to be able to make withdrawals when you wish. Please note that you will only be able to withdraw money from ATMs in the network.
To note : a minor domiciled in France for tax purposes has the right to open an LDD provided that he has personal income and is no longer attached to the tax household of his parents.
Procedure for closing an LDD
If you want to close your LDD, just ask your bank advisor.
There are two possibilities for this: go directly to an agency or send a letter. In both cases, you will need to provide the references of your savings account and the one to which you wish to transfer the funds from your LDD.
Can we have several LDD in several banks?
Some people wonder whether it is possible to hold several LDDs within the same bank or in several establishments.
In either case, the answer is negative. Indeed, it is impossible to hold several LDD whether in one and the same bank, or in several organizations. This is also one of the conditions for opening a sustainable development booklet in a banking establishment. This will open an LDD only if the person does not have another elsewhere.
On the other hand, note that it is entirely possible, and even recommended, to hold several savings accounts in one or more banks (Livret A, LDD, PEL, etc.).
Read also >> Can we have a booklet A in several banks?
Combining passbooks to grow your savings
If it is impossible to hold several LDD in one or more banks, on the other hand, you can accumulate different booklets such as booklet A, PEL, LDD.
Moreover, with these three banking products, a person can invest up to 96,150 euros. In this way, it ensures an average net return of 1.8% (1730 euros of interest per year without capitalization). This is partly due to the almost total absence of taxes and social contributions.
Combining booklet A, PEL and LDD is therefore a wise idea. Especially since there are few constraints. Only the PEL requires the blocking of funds for a minimum period.
This accumulation strategy can be more advantageous than life insurance because in this case, the saver has an obligation to block his funds for a period of 8 years.
Also read: How to grow your money quickly?