Book A rate will double in early August

Michel GILE via Getty Images

ECONOMY – The Livret A rate will double on August 1 to reach 2% and that of the Livret d’épargne populaire (LEP) will rise to 4.6%, announced this Thursday, July 14, the Minister of Economy Bruno Le Maire, supporting the proposal made by the Governor of the Banque de France.

A savings product held by most French people, the Livret A has its rate automatically calculated twice a year. In February, his remuneration had already doubled, going from 0.5%, a historical minimum, to 1%.

“In Livret A as in the LEP, we have chosen to follow the recommendations of the governor of the Banque de France,” explains the Bercy tenant newspaper this Thursday the parisian.

Governor François Villeroy de Galhau had sent his proposal upriver, as is the custom each semester. It was then up to the Minister to ratify it.

The rate depends in part on the level of inflation, measured by Insee in June at 5.8% per year in France, interbank rates, at which banks exchange money in the short term, but also on a possible “push”, absent this time.

If this rise may seem like good news for French savers, it should not make us forget that the rate, even if it rises, will remain well below inflation.

Favorite collocation of the French

For a saver with 10,000 euros in his Livret A, the annual remuneration will be 200 euros, compared to 100 euros at the current rate.

What attracts new payments in the coming weeks, but also “penalizes consumption”, reacted Philippe Crevel, director of the Savings Circle.

This revaluation of the Livret A also brings with it the rate of the Sustainable Development and Solidarity Booklet (LDDS).

It is a half surprise, since the governor of the Banque de France had already described it as “possible” at the microphone of Franceinfo on Wednesday.

Livret A and LDDS have more than €485 billion in assets, according to the latest score from the Caisse des Dépôts et Consignations (CDC).

They benefit from a guaranteed interest rate, are exempt from personal income tax and social security contributions, and the money deposited remains available at all times.

Managed jointly by the CDC and the banking networks, the Livret A is mainly used to finance social housing, while the LDDS is dedicated to the social and solidarity economy, as well as energy savings in housing.

Focus on LEP

The type of popular savings accounts, which will drop from 2.2% to 4.6%, becomes “the most effective investment to protect against inflation”, promotes Bruno Le Maire.

“You have to go back to 1998 to have a comparable LEP rate (4.5%)”, recalls Philippe Crevel. The LEP “will be by far the best-paying short-term investment that can offset inflation,” he believes.

But very few eligible people have them. If its opening procedures have been simplified since last year, only 37% of the 18.6 million French people who meet the conditions to have an LEP have it, according to the Banque de France.

This product is reserved for people with incomes that do not exceed certain limits (20,297 euros per year for example for a single person).

The Banque de France, for its part, recalled “its support for this instrument that makes it possible to protect the purchasing power of popular savings”.

See also in The HuffPost: With budget envelopes, they calm their anxiety about money