LIVRET A. Bruno Le Maire announced, this Friday, January 14 the revaluation of the rate of the livret A up to 1%. What will be your new interests after this increase? Linternaute.com answers your questions.
[Mis à jour le 14 janvier 2022 à 16h56] This is the good news of the weekend for savers, the rate of A booklet has just been upgraded. He doubles and goes from 0.5% at 1% from the February 1, 2022. “The Livret A is used to finance social housing, it is important that it can be financed under good conditions”, underlined in particular Bruno the Mayor, guest of the 13 Hours of TF1. The interests of savers will experience an increase of €22.50 per year, for an average outstanding amount of €5,500. In other words, the annual compensation will go from €27.50 at 55 euros, again according to this average outstanding amount. In total, this measure will benefit the 55 million French people holding a booklet A.
This increase is the first in nearly 11 years old. The latest dates back to August 1, 2011. At that time, the rate had been raised by 2% at 2.25%. However, the low rates of the livret A have not deterred French savers who find security and liquidity in this investment. the November 30, 2021, its outstanding amount reached 343 billion euros. Despite this increase in 0.5% at 1%, the rate will not compensate for inflation. Consumer prices increased by 2.8% in one year in December 2021.
The rates for French regulated savings accounts will increase from February 1:
The popular savings book rate will increase from 1 to 2.2%.
The rate of the booklet A and the booklet of sustainable and solidarity development will double, it will go from 0.5 to 1%. pic.twitter.com/ovn6txYkx0— Bruno Le Maire (@BrunoLeMaire) January 14, 2022
With this increase, the livret A will therefore remain a precautionary investment but not the best way to earn interest from your savings. For this, the popular savings account (LEP) is preferred for eligible people. An initiative encouraged by Bruno the Mayor on the set of TF1: “I would like to encourage the French to open an LEP, especially in this period of inflation” before continuing: “We will send an email in the coming days to all the French people who are entitled to it to encourage them to open a savings account that protects them against inflation.” To find out the amount of your interest after the increase in the rate of the livret A to 1%, find our complete file below and all the answers to your questions, as well as the benefits to be drawn from this increase in the rate of the booklet A.
Frozen at 0.5% since February 1, 2020, the rate of the livret A has just been revalued up to 1%. In other words, when you benefit from a savings of €1,000, you pocket 10 euro interest against only 5 euro interest with the former remuneration set at 0.5%. Find out the amount of your interest, depending on your savings:
- Savings of 1,000 euros: 10 euro interest (5 euros of net gains compared to the previous rate)
- Savings of 2,000 euros: 20 euro interest (10 euros of net gains compared to the previous rate)
- Savings of 3,000 euros: 30 euro interest (15 euros of net gains compared to the previous rate)
- Savings of 4,000 euros: 40 euro interest (20 euros of net gains compared to the previous rate)
- Savings of 5,000 euros: 50 euro interest (25 euros of net gains compared to the previous rate)
- Savings of 10,000 euros: 100 euro interest (50 euros of net gains compared to the previous rate)
- Savings of 22,950 euros (ceiling): 229.5 euros in interest (114.75 euros net gains compared to the previous rate)
Since February 1, 2020, the Livret A rate was frozen at 0.5%. A historically low rate, and a negative real return for the Livret A, below theinflation which was at the height of 2.8% in December 2021. From the February 1, 2022, the latter will be reassessed at the level of 1%. As a reminder, the rate is set by the Ministry of Economy and Finance on the recommendation of the Banque de France, according to a mathematical calculation taking into account the level of inflation and interest rates. Very popular with the French, remember that the Livret A account has a significant advantage: its interests are not subject toincome tax and social levies.
What is the role of a booklet A? The latter may resemble a precautionary savings, in addition to his current account. It is advisable to place two to three months of salary on his booklet A. But other solutions exist to save, some of which have seen their rate greatly revalued like the LEP. Subject to a means test, the LEP is a guaranteed investment reserved for people domiciled in France and whose resources are limited (20,296 euros of reference tax income for a single person, 31,135 euros for a couple). Its rate, located at 1%, will also be revalued due to runaway inflation. A huge boost for LEP, which should reach a rate of 2.2%! the LEP ceiling, it is fixed at 7,700 euros, excluding capitalized interest. Its extremely attractive rate could well make it a real alternative to the Livret A account in the eyes of savers. Are you eligible for LEP? In France, 15 million people can benefit from it. Remember that the livret A, like the LEP, remains a tax-free savings product. Interest earned by savers is not subject to income tax or social contributions.
Do you have a little extra nest egg and are you looking to study savings and investment products that would make your money grow? Consult our file to know the alternatives to the booklet A!
The ceiling of the Livret A is set at €22,950, for individuals. Remember that the payment of interest may well exceed this limit. As an indication, associations benefit from a much higher ceiling, at 76,500 euros. Anyone, whether minor or adult, can open a booklet A. On the other hand, it is not possible to hold several in different establishments. To open a livret A, you must sign a written contract with your bank, detailing the authorized operations (transfer, payment, withdrawal, etc.). It is forbidden to combine two regulated booklets of the same type (Livret A and Livret Bleu) for the same person.
On the other hand, it is quite possible to combine a booklet A with a Sustainable development booklet (LDD) or a youth booklet. In addition, it is possible to combine regulated booklets within the same tax household. To close a livret A, simply contact your banker, by mail or by going to an agency. You will need to specify the reference of your livret A and fill in the details of your current account, LDD, CEL… or other account to which you wish to transfer the funds. In the event of closure during the year, capitalized interest is credited to the account on the day it is closed.
The calculation of the interests of the livret A occurs the 1er and 16 of each month, so every fortnight. Clearly, if you deposit money in your savings account A between 1er and the 15th of the month, the calculation will be effective from the 16th. If you make a deposit between the 17th and the end of the month, you will have to wait until the following month for the date of the value to be taken into account in the calculation of interest . Did you make a withdrawal? Interest is calculated over the current period.
The total interest is added to the capital at the end of the year. When you want to calculate your interest, you should therefore multiply the balance of your savings account by your rate and divide it by 24 (number of fortnights in the year). But beware, this calculation has only a theoretical value. To calculate your return, you must take into account all the movements made on the booklet.
This is one of the advantages of this regulated savings product. The interests of the livret A are exempt from income tax. They are also not subject to social security contributions. The Livret A also allows you to make transfers and withdrawals without a limit on the number, and free of charge. Finally, it allows the saver to have capital available immediately.