Term account or bank book: which one to choose?

What is a term account? 🏦

The term account is a fixed-term investment. You deposit a sum of money in one go, for a fixed period (1 month to 10 years), with an interest rate known in advance. In return, your funds are blocked until maturity, unless early withdrawal penalizes.

Main advantages of the CAT:

Capital security

Guaranteed return 📈

No management fees

Disadvantages:

Funds blocked until maturity 🔒

Taxable taxation (PFU or progressive scale)

What is a bankbook? 📘

The bank passbook is a liquid savings: you can deposit and withdraw money at any time. There are two types of passbooks:

Regulated booklets (Livret A, LDDS, LEP): tax-exempt, rates set by the State

Unregulated savings accounts: offered by banks, with free rates, but taxed

Benefits of the bank book:

Money available at any time 💡

Simplicity of use

Advantageous taxation for regulated savings accounts (tax-exempt interest and social contributions)

Disadvantages:

Low yield compared to CAT

Revisable rates, therefore uncertain income

Term account vs bankbook: what to choose? ⚖️

👉 Choose a passbook if you need precautionary savings available at any time.

👉 Prefer a term account if you can lock up your funds for a set duration and are looking for a guaranteed return that is higher than regulated passbooks.

Conclusion

The choice depends on your objective: security + liquidity = bank book; security + guaranteed return = term account. The two products can be complementary in a well-constructed savings strategy.