PEAC, a mechanism in favor of ecological transition
The PEAC was created by the “green industry” law of October 2023. This new savings product aims to direct young people’s savings towards ecological projects. As of July 1, 2024, parents or young adults themselves (up to 21 years old) can therefore subscribe to this plan with various financial intermediaries such as banks, insurance companies or mutual insurance companies. Designed for those under 21, the PEAC works like a regulated booklet. Once the account is opened, the holder can make payments up to a limit of 22,950 euros, and withdrawal of funds is possible upon reaching the age of majority if the contract is more than five years old. In any case, the account must be closed no later than the year the holder turns 30. In the event of disability or death of the parents, early release is also possible.
The funds deposited in the PEAC are mainly invested in financial securities labeled “France Finance verte” or “socially responsible investment”. And who says shares and bonds says capital not guaranteed at 100%. By default, the PEAC is managed in a horizon-driven manner, in order to minimize the risk of losses, although holders can opt for free management. In any case, the share of bonds will have to increase over time to constitute at least 70% of the outstanding PEAC in the two years preceding the liquidation. Financial intermediaries must provide all necessary information before subscription, namely fees, risk indicator and past performance.
A tax advantage to the key
One of the main attractions of the PEAC is its total exemption from income tax and social security contributions, which sets it apart from other savings products. Unlike the Share Savings Plan (PEA) or the Livret A, the PEAC is specifically designed to align savings with ecological objectives, thus offering a double incentive: a tax advantage and a positive environmental impact.
For young people, the PEAC is therefore an alternative to the good old Livret A. In addition to offering a potentially higher return, the PEAC directly supports the green transition. The PEAC will therefore be able to appeal to parents who are keen to raise their children’s awareness of environmental issues while offering them an opportunity to diversify their savings.
