PEA or securities account in 2026: which one to choose?

Updated on 3 August 2026

The PEA (a French tax-advantaged equity savings account) is the best option for investing long term in European shares and ETFs: after 5 years, gains are exempt from income tax. The ordinary securities account (CTO) suits global markets, or amounts above the PEA cap of €150,000. You can hold both.

Key takeaways

• The ordinary securities account offers no tax advantage: gains are taxed at 31.4% via the flat tax (PFU), which combines income tax and social levies.
• The PEA is restricted to eligible European shares and ETFs; the securities account gives unrestricted access to every market and every security.
• A withdrawal before 5 years normally closes the PEA, apart from statutory exceptions (redundancy, disability, early retirement, taking over a business).
• The PEA-PME targets European small and mid-sized companies, with an overall cap of €225,000 combined with the standard PEA.
• Anyone aged 18 to 25 still attached to their parents' tax household can open a PEA Jeunes capped at €20,000.

Definitions and basic principles

What is a PEA?

The Plan d'Épargne en Actions (PEA) is a tax wrapper for investing in the stock market, with a specific tax regime once the securities have been held for at least 5 years.

In practice, the PEA is a securities account that can hold European shares, ETFs (trackers), units in equity funds and so on. The PEA cap is €150,000 of contributions.

The defining feature of the PEA is its specific tax regime after 5 years: capital gains are exempt from income tax, but social levies still apply.

What is an ordinary securities account?

The ordinary securities account (also called a CTO) is the standard account for investing in the stock market. Unlike the PEA, it offers no tax advantage: realised capital gains are taxed at 31.4% via the flat tax (PFU) or, by election, at progressive income tax rates.

The CTO lets you invest in absolutely every kind of security (shares, bonds, ETFs and more) and in every part of the world. It is therefore more flexible than the PEA, but less favourable on tax.

There is no cap on an ordinary securities account. You can hold as many as you like, with different financial intermediaries.

What are the differences between a PEA and an ordinary securities account?

The PEA and the ordinary securities account differ mainly on taxation, contribution cap, eligible securities and geographic scope. The table below sets out those differences point by point, to help you pick the right wrapper in 2026.

To make the differences easier to grasp, here is a summary table of the key points:

Types of investment available

With a PEA, you can invest in European shares, ETFs eligible for the PEA, and certain investment funds. That covers shares in companies listed on European exchanges and, under certain conditions, securities of companies headquartered in the European Economic Area (EEA).

The ordinary securities account offers far more freedom, since it allows investment in every type of security: shares from anywhere in the world, bonds, ETFs, derivatives and more. There is no restriction on geography or on the kind of security.

Contribution limits

The PEA has a contribution cap of €150,000, which limits how much you can put into it. The ordinary securities account, by contrast, has no contribution cap, so you can invest as much as you want.

Taxation

Tax is one of the PEA's main advantages. After 5 years, gains (capital gains and dividends) are exempt from income tax, although social levies remain due. Gains made in an ordinary securities account, by contrast, are subject to the flat tax (PFU) of 31.4%, or to progressive income tax rates where that is more favourable.

Flexibility and range of investments

The PEA is less flexible than the ordinary securities account, being limited to European securities and to a contribution cap. It still allows a degree of diversification within Europe. The ordinary securities account offers maximum flexibility and broader geographic diversification.

Geographic scope

The PEA is restricted to investments inside Europe. The ordinary securities account allows investing with no geographic restriction, giving access to global markets and wider diversification.

In short, the choice between a PEA and an ordinary securities account depends on your investment goals, your risk appetite, your time horizon and how much tax matters to you. For more on the types of investment and vehicles available for the stock market, see this detailed article.

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What are the advantages and disadvantages of a PEA?

The PEA offers favourable taxation after 5 years and access to a wide range of European securities, but it is capped at €150,000 and limited to companies domiciled in Europe.

Advantages of the PEA

1. Favourable taxation: according to the French Ministry for the Economy, Finance and Industrial and Digital Sovereignty, the PEA gives an exemption from income tax on the income and capital gains generated, provided no withdrawal is made during the 5 years following the opening of the plan, which makes it a particularly attractive vehicle for long-term investors.
2. Range of investments: the PEA can hold a wide range of securities, including shares, investment certificates, units in SARL companies and units in collective investment schemes (OPCVM, SICAV and the like).
3. Easy to open: a PEA is personal (one standard PEA per person). A couple filing jointly can each hold a standard PEA and a PEA-PME-ETI, so 4 plans in total. Adult children still attached to the household can also open a PEA capped at €20,000 (PEA Jeunes) until they turn 25.

Disadvantages and limits of the PEA

1. Contribution limits: the PEA is subject to a contribution cap of €150,000, which can restrict how much some investors are able to put in.
2. Geographic restrictions: the companies you can invest in through a PEA must be domiciled in Europe, even though the rule has been relaxed.
3. Risk of loss: like any equity investment, the PEA is exposed to market volatility, so you must be ready to accept a degree of risk.
4. Closure on early withdrawal: any withdrawal in the plan's first 5 years closes the PEA and forfeits the tax benefits, apart from statutory exceptions (redundancy, disability or early retirement of the holder or their spouse, starting or taking over a business).

What are the advantages and disadvantages of an ordinary securities account?

The ordinary securities account gives access to every market and every security with no contribution cap, but its gains are fully taxed from the first year, with no tax advantage.

Advantages of the ordinary securities account

1. Range of investments: the CTO offers a very wide choice. It can hold shares from anywhere in the world, bonds, investment funds, trackers (ETFs) and even derivatives. That breadth lets investors diversify their portfolio and spread risk.
2. No contribution cap: unlike the PEA, the CTO has no ceiling. You can invest whatever amounts you want, without limit, which is particularly useful for investors with a large amount of capital to deploy.
3. No geographic constraints: the CTO can hold shares from anywhere in the world, unlike the PEA, which is limited to European companies. That means more flexibility and access to foreign markets.

Disadvantages and limits of the ordinary securities account

1. Less favourable taxation: the CTO's main drawback is tax. Unlike the PEA, it carries no tax advantage. Gains are taxed at 31.4%, or at income tax rates. That can be a heavy cost for investors making large gains.
2. Higher risk: the CTO gives access to derivatives, which are highly speculative instruments and potentially dangerous for a beginner. Understand the risks attached to these products before using them.

So the choice between a PEA and a CTO depends on several factors: your risk tolerance, your investment horizon and your financial goals. Understand the features, advantages and drawbacks of each before deciding.

To go further on this wrapper, see this article on the ordinary securities account.

How do you open a PEA or an ordinary securities account?

Opening a PEA or an ordinary securities account is fairly simple and can be done with a range of financial institutions: traditional banks, online banks and online brokers.

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Steps to follow

To open a PEA, you must be a French tax resident and must not already hold another standard PEA. You can open one with a traditional or an online bank. The process is usually quick and can often be completed entirely online.

To open an ordinary securities account, there is no tax residency condition and no limit on the number of accounts you can hold. As with the PEA, you can open one with a traditional or an online bank, usually entirely online.

Documents required

The documents needed to open a PEA or an ordinary securities account are usually the following:

• A valid form of ID (national identity card, passport)
• A recent proof of address (energy bill, tax assessment notice)
• A RIB, the French bank account details form, for transfers and direct debits
• A questionnaire on your investment experience, your financial situation and your investment objectives. It matters, because it is what lets the institution judge whether the products offered suit your profile.

Pick an institution with competitive fees: reasonable brokerage fees, little or no custody fees, and moderate transfer fees. Online banks are often more competitive on this front.

Special cases

Two variants of the PEA target specific audiences: the PEA PME and the PEA Jeunes. Both have features that set them apart from the standard PEA.

PEA PME

The PEA PME is an equity savings plan dedicated to investing in small and mid-sized companies (PME) and intermediate-sized companies (ETI). It was created to channel money towards those businesses, which are often riskier but can offer higher return potential. The combined cap for the standard PEA and the PEA PME is €225,000 (the standard PEA itself being capped at €150,000). You can hold a standard PEA and a PEA PME at the same time.

PEA Jeunes

The PEA Jeunes is a variant for people aged 18 to 25 who are still attached to their parents' tax household. Its contribution cap is €20,000. At 25, it converts into a standard PEA. It lets young adults start investing in the stock market inside a specific tax framework.

Both follow the same operating and tax rules as the standard PEA. They simply add options for investing in the stock market.

How to manage a PEA and an ordinary securities account well

Investment strategies

Managing a PEA or an ordinary securities account calls for a clearly defined investment strategy. Diversifying is essential, so that risk is spread across asset classes whose performance is as uncorrelated as possible.

Because the PEA is limited to European securities, selection has to focus on company performance, sector and growth potential. The ordinary securities account opens up a wider range, including international shares, bonds and investment funds.

Review your portfolio regularly, and adjust your strategy as markets and your own financial goals change.

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Mistakes to avoid

One of the most common investing mistakes is failing to think long term. Investing in the stock market is a long-term commitment. With a PEA, the first withdrawal should not happen before the plan's fifth anniversary.

Another common mistake is failing to diversify enough. Putting all your eggs in one basket is risky, so spread your investments across different types of assets.

Finally, do not let emotion take over. Market swings can be stressful, but stay calm and avoid hasty decisions driven by short-term reactions.

Follow these principles and you will be able to run your PEA or ordinary securities account effectively over the long term, bearing in mind that no return is guaranteed.

Frequently asked questions

Can you open a PEA and a CTO at the same time?

Yes. A PEA and a CTO can be held together with no restriction. Use the PEA first for the European shares and ETFs that qualify for the tax break. The CTO takes over for global markets (US shares, bonds) or for amounts above the PEA cap of €150,000.

What is the tax rate on CTO gains in 2026?

Gains in a CTO are subject to the flat tax (PFU) of 31.4% (12.8% income tax plus 18.6% social levies). By election, progressive income tax rates can apply instead where that is more favourable, notably for taxpayers who owe no income tax.

Can you withdraw money from a PEA without closing it?

Yes, but only after 5 years. A partial withdrawal after 5 years does not close the plan, and you can keep contributing. Before 5 years, any withdrawal normally closes it, apart from statutory exceptions (redundancy, disability, early retirement, taking over a business).

PEA or CTO for investing in an MSCI World ETF?

Some "synthetic" MSCI World ETFs are eligible for the PEA (they track the index through a swap while holding European shares). For physically replicated MSCI World ETFs, only a CTO or life insurance will do. Check PEA eligibility on the fund factsheet before investing.

What is the difference between a standard PEA and a PEA-PME?

The standard PEA can hold any eligible shares (cap of €150,000). The PEA-PME-ETI specifically targets listed PME and ETI companies (cap of €225,000). Both plans can be held together, but total contributions across the two cannot exceed €225,000.

Sources

economie.gouv.fr, Equity savings plan (PEA)

Service-public.fr, Equity savings plan (PEA): cap, taxation and withdrawal conditions

Service-public.fr, Savings and investment income: the flat tax (PFU)

AMF, white list of Crypto-Asset Service Providers (PSCA), Finary SAS