Is French banking really so different to what you are used to in the UK? Yes, says Rachel Johnson, but as long as you understand how the French system works, you should ‘cheque’ out ok
How to get your French bank account up and running
The differences in French banking may not be large but they’re just enough to make life complicated if you don’t know about them. They can also be hard to detect because if you walk into a bank in France and the person you are dealing with has never lived abroad, they won’t realise that banking is done any differently elsewhere. Here are a few tips to help you begin banking in France.
Opening a bank account Some people will tell you that you can’t have a bank account in France without a French address (holiday home or main residence). It’s true that many banks, and insurance companies providing banking services, will not open a bank account for you without a French address. Credit Agricole Britline appears to be the only bank able to open an account while you have a UK, Irish or French address and are fiscally resident in one of those countries (applications are made online).
If you have a property in France and you decide to walk into a bank or post office near your property then you should be able to open an account. You will need the following documents: Your passport (more than six months’ validity left to run). Two proofs of address per person to be named on the account; each must be under three months old. Last two months of full bank statements, from your main account showing living expenses. Proof of your French property ( acte authenthique, utility bills, house insurance etc).
The above list is not exhaustive; you may also be asked to provide proof of income, for example. Be sure which address is being used to set up your account: if they use the French address, will you be there to pick up your statements or can you use online banking? Don’t worry about the address with regards to your means of payments (debit cards, cheque books etc) as these are not sent out by post in France. Often this isn’t mentioned as French customers already know! You will usually need to return to the branch within a certain timeframe to pick them up or they will be destroyed. You also need to understand how your means of payment work in France.
Cheque books As long as you have available funds in your account, you can write a cheque for any amount. There is no cheque guarantee card as there are strong regulations in place to dissuade people issuing cheques that can’t be honoured. A bounced cheque can result in you being blacklisted by the Banque de France for up to five years (known as being interdit bancaire) for the account that the cheque was drawn on, but also for any other account held in France at that time or opened subsequently on which your name appears.
If your French property is your holiday home, it is understandable that your French bank account will not be your main account and you may find it hard to follow it at a distance, meaning oversights can occur. If you do receive a letter in French from your bank telling you about a bounced cheque, you must act quickly and credit your account and ask for the cheque to be re-presented. If the beneficiary has the cheque returned to them, they must keep it and re-present it once your account is back in credit. Don’t pay the person in cash – this will not lift the blacklisting and you will still need to wait five years to have the blacklisting lifted. Basically, you need to talk to your bank and understand what you have to do to sort it out and what you should avoid – this is a key area where misunderstandings
happen and can drag on for long periods of time, making life difficult. If you know who to talk to though, it can be dealt with easily.
Debit cards Apart from some online banks who may not charge initially, debit cards usually have an annual fee attached to them – paid annually or broken down into monthly payments (sometimes including other service package options too).
Banks publish their tariffs online and they all show a set of basic fees for a fixed set of transactions so you can easily compare the basics from bank to bank. In general, an international debit card, if charged at full price, will be around €40 per year, while a Gold/premier card can vary from approximately €100 to €150 per year, and the biggest differences can be found on the annual fees for the equivalent of Platinum cards (World Elite Mastercard or Visa Infinite, for example) from bank to bank.
Most French bank cards come with travel insurance and assistance included, although the levels of cover will differ from card to card. You may also have some payment guarantees included; ask your bank and don’t assume you will have the same guarantees as in the UK just because you have a card issued by a worldwide group.
Debit cards are either immediate debit or deferred debit (end of month debit regrouping all payments into one debit from your account); you choose depending on how you prefer to manage your account. However, don’t be under the illusion that now you have your card, you can access all your funds as and when you want – this isn’t the case in France!
There are upper limits set as standard for cash withdrawals over seven rolling days and payments over the calendar month. Typically, an international debit card will allow standard access of €450 cash per seven days and €2,300 per month in payments. You can ask to increase them (there may be a
Having an authorised overdraft is perfectly normal in France. They just don’t work in the same way as the UK. We advise customers to think of them more in terms of a useful buffer zone
charge for this) or you can upgrade your card. Of course, if you don’t know about this it can be frustrating when towards the end of the month your card is refused in the supermarket. You’ve probably reached your limit even though you still have plenty of funds in your account! That’s why you see so many people still paying by cheque in France.
Direct debits and TIP payments You will probably need to set up direct debits for utilities, insurances, internet etc; this is relatively easy, you just need a RIB. A what? A RIB is the relevé d’identité bancaire, an unassuming document found in your cheque book, on your bank statement, online or printable at some cash machines. It comprises your bank details including your address, IBAN and BIC codes, and you need this to set up a direct debit. Complete the form and return it signed with your RIB to the company who will inform your bank of the order. If you don’t wish to give an open mandate to a utility company for a direct debit then you can ask them for their details and set up an online beneficiary and make a transfer to them yourself when it’s needed.
Alternatively, sign a TIP – titre inter bancaire de paiement – this resembles a ‘giro’-type form received with a bill. The TIP enables you to keep control, for the price of a stamp. With each due bill, just sign and return the TIP form to the company; the first time you return it, you will also need to send a copy of your RIB, but thereafter your bank details will figure on the paying slip.
You can make card payments online for some utilities but this type of payment is not as common as in the UK, and once you give your card details to someone, you cannot cancel a payment they take, even if you don’t agree with it. Those card details are valid for the life of the card; up to three years or until you cancel and replace it.
Contrary to popular belief, it is not illegal to be overdrawn in France. This idea stems from people’s misunderstanding of French regulations regarding bounced cheques. Having an authorised overdraft is perfectly normal in France. They just don’t work in the same way as the UK. We advise customers to think of them more in terms of a useful buffer zone, particularly if the French account is not your main account.
In general, the overdraft that will be agreed will be based upon a third of your regular payments into the account, so if you transfer in €600 per month (or equivalent) then an overdraft of around €200 would be agreed, for example.
You also need to understand how long you are allowed to remain overdrawn; this is usually 30 days and then your account must come back into credit for at least 24 hours before becoming overdrawn again.
Fees It is worth noting at this stage that some French banks are regionalised, such as Credit Agricole or Credit Mutuel. Each region will publish its own annual fees, so CA Normandie will not have the same fees as CA Charente-Perigord, for example.
These are just some of the basic differences you may come across when starting to bank in France, but there are more! Be sure that you can communicate with your bank and your adviser easily from wherever you may be, that you understand what is being said, and that your bank understands you. Don’t be afraid to ask questions even if you think you know the answer – you may be surprised!
Don’t assume you can access all your funds as and when you want – there are upper limits for cash withdrawals over seven rolling days