It still allows for a bit of hang. This Wednesday, July 13, the head of the Bank of France, Francois Villeroy de Gaulle, told Franceinfo that the doubling of the livret A rate on August 1 from 1% to 2%it’s ” perhaps “. In any case, this is the one that will be proposed to the Minister of Economy and Finance, Bruno Le Maire, the sole one who makes the final decision… and who must make a decision before the weekend.
Twice the percentage
Such an increase in the exchange rate is almost historic. ” You have to go back to the early 60s to get a doubling “, indicates the Savings Circle. At that time it jumped to 3.25% instead of 1.5%, a rate unchanged since 1946! ” There has never been an increase in points since the early 1980s. The most important were carried out 1Er July 2000 with an increase of 0.75 pp “. Since 2011, it has been regularly reduced (to 2.25% that year).
Every six months, the Banque de France must sum up. Simply put, the calculation formula takes the average of the short-term Euro interbank rates (€STR) and inflation over the last semester (4.46% between January and June 2022). In this case, the formula will give a rate of 1.94%, rounded up to 2%. A saver who has filled his savings account to the brim, i.e. 22,950 euros, will earn 459 euros in interest per year.
???? Livret A rate?? “It’s not the Banque de France that sets the formula, it’s the Banque de France that calculates it,” reminds Francois Villeroy de Galau “It’s quite possible” that livre A will reach 2%, and it will be “much more.” » for a popular savings account. pic.twitter.com/EMovLNWgm9
— franceinfo (@franceinfo) July 13, 2022
Negative real profitability
But this revaluation, expected by the 55 million French people holding Booklet A in their hands, does not compensate for the galloping inflation estimated by INSEE at 5.5% for 2022! The real return on privileged investments of the French will remain negative. ” For those with €10,000 in Booklet A, the winnings will be €200. With inflation […]the actual loss would be 350 euros in constant euros “, thus illustrates the Savings Circle.
However, François Villerois de Galau ruled out ” an exceptional gesture “. It remains to be seen whether the government will still exceed 2%, the one who these days in the Hemicycle is defending his law on purchasing power, the first major text of Macron’s second term.
life insurance in trouble
Another atypical situation: with this rate of return, the oldest regulated medium of French savings will become more interesting than euro life insurance ! The average return on another preferred investment in 2021 is only 1.28%…” Book A rate is twice the average net tax rate on euro funds, unprecedented commented Philippe Crevel, director of the Cercle de l’Epargne.
What then? People’s savings book (LEP), another regulated investment whose rate mechanically fluctuates with the A livret rate. There will be much more “Only 2%,” warned François Villeroi de Galau. And it is not for nothing that it should grow from 2.2% to 4.5%, according to the calculation formula. You have to go back to 1998 to find identical yields. Remember that you must not exceed certain income limits to be able to open a LEP (€20,297 per year per person).
” The popular savings account is an extremely interesting product for the 19 million French people who have access to it, as it is fully protected against inflation. “, the French governor said on Franceinfo. This is not quite true if we rely on INSEE’s estimate of annual inflation (5.5%), but it is still much more interesting than its big brother Booklet A, which is priced in euros.