PEA or securities account: what to choose?

Investment in shares can be made in different ways. In particular, the choice can be made between two supports: the PEA or Equity Savings Plan or the securities account. Each of its solutions implies its advantages, how to decide? Different criteria must be taken into account to make the right decision

What types of actions are you interested in?

If you want to invest in a variety of equities from France, Europe and around the world, it is to the securities account that you will turn. You will be able to invest not only in shares and bonds, but also in trackers, not to mention FCPs or mutual funds, SICAVs or open-ended investment companies or UCITS or undertakings for collective investment in transferable securities. You can then decide according to your investment strategy.

As for the PEA, it only allows an investment in European securities. In addition, it is not possible to invest in IICs or real estate investment companies and warrants

How do I open a securities account or a PEA?

First of all, it should be stressed that there is no minimum investment to be respected at the time of opening. However, there is a maximum limit not to be exceeded for a PEA. As for the actual opening conditions, they are simpler for a securities account since everyone can start, regardless of age, and it can be an individual or joint account. In addition, each investor can have several accounts at the same time.

With a PEA, it is necessary to be of legal age and taxable in France and an investor can only own a PEA account (necessarily a joint account). The PEA is also available in online banks as you can see with Valentin’s review on Hello Bank.

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What about availability and taxation?

On the availability side, the investor can access his funds as he sees fit. With the PEA, funds also remain accessible, but there are significant constraints to be aware of: if the withdrawal is made within 5 years of opening, the tax benefits are no longer valid. And if it is done before 8 years, the account is automatically closed.

As for taxation, it is more advantageous for the PEA, which provides a tax exemption after 5 years. Attention, social security contributions apply if the investor makes withdrawals or closes his account. As for the securities account, all gains earned are taxed by social security contributions and are taxed on the basis of income tax.

So which one to choose?

In the end, it should be stressed that the advantages of the securities account and the PEA complement each other. Choosing these two solutions is beneficial in diversifying an investor’s portfolio. It would then be wise to turn to the PEA for European stocks and income stocks. The securities account is interesting for investing in capitalisation values. Finally, it should always be remembered that any investment in the stock market involves risks, regardless of the composition of the equity portfolio.