Business Livret A: is it possible for a company?

Does the Livret A for professionals really exist?

The Livret A is a savings product reserved for individuals and certain legal entities. It is therefore not accessible to companies.

According to Article L-221-3 of the French Monetary and Financial Code Apart from natural persons, the only legal entities authorized to open a Livret A passbook are :

• Non-profit associations

• Low-cost housing organizations

• Co-owners' associations.

The State has set it up to encourage people to save . It explicitly excludes commercial companies, whether small businesses, SMEs or large corporations.

The reasons are mainly legal and tax-related, with the aim of focus this savings product on non-profit or individual customers.

Companies must therefore turn to other savings solutions, adapted to their status and tax situation.

What are the alternatives to Livret A savings accounts for companies?

Although a company cannot benefit from the Livret A passbook savings account, there are a number of savings solutions available for efficiently investing surplus cash. These alternatives vary in terms of yield, liquidity and risk.

Term account

Le term account is an investment solution where the company deposits a sum of money for a fixed term, with a guaranteed interest rate.

Advantages :

• It's secure. The main advantage is the guaranteed fixed return. The rate is often higher than that of a traditional savings passbook, enabling companies to benefit from more attractive interest rates.

• Yield is predictable. The company knows in advance how much it will earn, since the rate is fixed at the time of underwriting.

Disadvantages :

• Limited liquidity for the duration of the placement, often from 6 months to 5 years.

• If the company needs its funds before the end of the period, penalties may apply.

A term account can be a good option if the company is certain that we won't need all our cash in the short term, while seeking to generate a secure return.

Professional surplus account

Le professional surplus account is an option similar to the Livret A, but reserved exclusively for companies.

This is a banking product designed for companies with a surplus cash . It enables temporarily invest unused funds while offering the possibility of generating interest .

Advantages :

• Its flexibility Contrary to the term account, the professional surplus account allows you to withdrawals at any time with no penalties to pay. This offers access to funds for companies with rapid cash flow requirements.

• Attractive remuneration The rate is more or less equal to that of the Livret A, with an additional gestion simple and a immediate liquidity .

Disadvantages :

• Moderate yield . Although it offers an attractive return, it is still lower than that of riskier investments such as SCPI treasury or the money market and bond funds .

• Deposit limits . Some professional surplus accounts may have deposit limits . This can limit investment capacity for companies with larger cash balances.

The Professional Surplus Account is suitable for companies wishing to flexible savings without the risk of locking in their funds.

Company savings passbook (LEE)

The company savings passbook (LEE) is a savings product that enables companies to invest their cash for a period of at least 2 years and generate interest.

Advantages :

• Accessibility and flexibility : Like the Professional Surplus Account, the LEE allows you to deposits and withdrawals at any time . It offers flexibility for companies who need to manage their cash flow smoothly.

• Partial tax exemption Although subject to corporate income tax, the LEE may offer tax advantages, particularly for certain companies that benefit from special schemes.

Disadvantages :

• Moderate yield The rate of remuneration can be less attractive than other financial products. What's more, the tax impact can make this product less attractive for companies with high corporate taxes.

• Subscription conditions : Only SMEs and VSEs can subscribe, thus excluding large companies from this savings product.

LEE remains a popular option for small businesses looking to optimize their short-term cash flow.

Money market and bond funds

Money-market and bond funds are low-risk investments, often with a high risk profile. used by companies looking for short- or medium-term savings. The investment horizon is 1 day to 12 months.

Advantages :

• A low risk. These funds invest in low-risk assets, offering stable returns. They are suitable for companies seeking short- to medium-term savings.

• Diversification. Unlike traditional savings products, these funds allow you to diversify your investments by buying government bonds or corporate bonds. In this way, they offer greater protection against inflation.

Disadvantages :

• Limited yield : Yield is often lower than other, riskier investments. It can also be affected by low interest rates.

• Less liquid : Some funds may have blocking periods or strict conditions for withdrawals, which can reduce the amount of flexibility compared with other options such as the professional surplus account.

Money market and bond funds tailored to companies looking for a low-risk investment solution to secure their cash flow while maintaining a degree of liquidity.

Cash SCPI

SCPIs (Sociétés Civiles de Placement Immobilier) for cash flow enable companies to invest their surplus cash in a diversified real estate portfolio.

They generate regular income through rental income, while offering a potentially higher return than more traditional investments.

Advantages :

• Attractive returns . Visit SCPI treasury generally offer higher returns than traditional products such as savings books or term accounts, thanks to their real estate investment .

• Income stability . They generate regular income via the rents collected, providing a stable source of passive income.

Disadvantages :

• Real estate risk . SCPIs carry a risk related to the vacance locative or the fluctuation des loyers .

• Reduced liquidity : The SCPIs are less liquid than products such as the professional surplus account or the LEE. Selling shares can take some time.

Treasury SCPIs can be of interest to companies looking to diversify their portfolio and generate passive income over the long term.

Comparative table of solutions for investing a company's cash flow

The following table summarizes the comparison of the different investment solutions:

How are corporate investments taxed?

Taxation of income from company savings schemes depends on the product selected. In general, companies are subject to corporate income tax (IS) on the interest and capital gains generated by their investments.

Interest earned on investments such as term accounts, LEEs and money-market funds is included in the company's taxable income and subject to corporate income tax.

The corporate income tax rate is generally 25% for most companies in France.

However, SMEs can benefit from tax exemptions or reduced rates under certain conditions .

This is particularly the case if they are located in specific geographical areas or invest in innovation projects.

Companies must therefore choose their savings product carefully, based on their tax situation and long-term financial objectives.

The Hero pro account: a more profitable and flexible alternative

Le Hero pro account is an alternative solution for companies seeking to manage their cash flow while enjoying an attractive remuneration package.

This professional account offers a rate of up to 3% calculated daily and paid monthly .

This makes it an attractive alternative to the Livret A passbook for companies.

Points forts :

• Attractive remuneration of up to 3%.

• Immediate liquidity with no time limit on deposits unlike term accounts.

• It is secure and easy to manage for day-to-day transactions.

The Hero pro account can be of particular interest to companies seeking to maximize the profitability of their cash flow. It combines the advantages of an interest-bearing account and the flexibility of a current account.

Although the Livret A professionnel is not accessible to companies, there are several effective alternatives for investing cash while optimizing returns.

Each solution has its advantages and disadvantages, depending on liquidity requirements, expected return and acceptable level of risk. The pro Hero account offers a good compromise between profitability and availability of funds, while simplifying financial management for businesses.