CSG Increase: How Will Your Savings and Investment Accounts Be Affected in 2026?

The 2026 Social Security budget, adopted this Tuesday, includes a measure to increase the CSG (Contribution Sociale Généralisée) on capital income. With this change, certain investments will face a 31.4% levy instead of the current 30% “flat tax.” However, Livret A and life insurance remain exempt.

After weeks of debate, the Social Security budget was narrowly approved on Tuesday. Among its provisions, one will likely disappoint some savers: the increase in taxation on interest from certain investments.

RMC Conso reported on this in early November when the measure was added to the initial bill via an amendment from the Socialist Party (PS). Specifically, the CSG rate applied to interest will rise from 9.2% to 10.6%. For context, this contribution helps fund Social Security (hence its inclusion in the PLFSS rather than the general budget).

Life Insurance and PEL Exempted

However, the amendment adopted in November was modified before the final approval of the Social Security budget. Some investments initially targeted by this measure are now exempt.

Notably, life insurance, the most popular investment in France in terms of total assets, is spared.

The Plan d’Épargne Logement (PEL), also initially affected, is exempt as well—a relief for the roughly 9 million French citizens who hold one.

Additionally, accounts such as Livret A, LEP (Livret d’Épargne Populaire), and LDDS (Livret de Développement Durable et Solidaire) are not affected. These accounts are regulated and tax-free, meaning you do not pay any tax on the interest they generate.

Investments That Will Be Taxed

So, which investments are impacted? Five types are particularly concerned:

1. Equity-based accounts:

   • PEA (Plan d’Épargne en Actions)

   • Ordinary securities accounts (CTO)
     Interest earned from these portfolios will face higher taxation.

2. Term deposits (CAT):
   These are bank accounts where funds are locked for a fixed duration (often four years). Less flexible than Livret A but usually offering higher returns, CATs gained popularity in 2023 due to high interest rates.

3. Other less common banking products:

   • Bank savings accounts with terms set by the bank (unlike Livret A, which is state-regulated)

   • Interest-bearing current accounts, offered by some banks, particularly online banks, in recent years

Flat Tax Rising from 30% to 31.4%

Currently, all these investments are subject to CSG, but not only that. The Prélèvement Forfaitaire Unique (PFU), or “flat tax,” combines all levies on capital income.

The flat tax consists of two parts:

1. Income tax component: A fixed rate of 12.8% on interest. This rate, slightly above the first income tax bracket (11%), was introduced by Emmanuel Macron in 2018 to simplify capital taxation.

2. Social contributions: This includes CSG (now increasing), CRDS (Contribution au Remboursement de la Dette Sociale) at 0.5%, and the solidarity levy at 7.5%.

Previously, the total rate was 30%. With the CSG rising from 9.2% to 10.6%, the flat tax will increase to 31.4%.