LIVRET A. The Livret A rate will be reassessed on February 1, 2022, at 0.8%. Find out what this will change for savers.
[Mis à jour le 12 janvier 2022 à 14h39] The announcement of the Livret A rate in 2022 seems imminent in the words of the governor of the Banque de France interviewed this Wednesday, January 12 on LCI. Relaunched on the historically low Livret A rate, 0.5% as a reminder, François Villeroy de Galhau declared that the December inflation figure would be known on Friday. The Governor of the Banque de France took the opportunity to slip an advice to savers: “The Livret A is a good product. But for popular savings, the real product for protecting purchasing power is LEP” .
Following the announcement of the latest inflation figures, the Banque de France should carry out the calculation of the new Livret A rate immediately, followed by the governor’s recommendation to the Minister of the Economy. According to the latest trends, as of February 1, 2022, the Livret A rate should be spiked up to 0.8% against 0.5%, a rate frozen since February 2020, an increase which would lead to an increase in interest 16.50 euros per year for a average outstandings of 5,500 euros for a natural person. Intended to finance social housing, the calculation of the Livret A rate takes into account the inflation of the last six months as well as the interest rates of the last six months. For its part pointed at 2.8%, inflation therefore remains clearly above the figures for a potential increase in the Livret A rate.
Since February 1, 2020, the livret A rate is frozen at 0.5%. A historically low rate, and a negative real return for the livret A, below theinflation which is at the height of 2.8%. As a reminder, the rate is set by the Ministry of the 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.
So what is the role of an A booklet? The latter can be likened to a precautionary savings, in addition to his current account. It is advisable to place two to three months’ salary in your livret A. Do you have a little extra nest egg and you are looking to study savings and investment products that would allow your money to grow? Consult our file to know the alternatives to the booklet A!
In all likelihood, the livret A rate should drop from 0.5% at 0.8% to February 1, 2022. A significant increase for the preferred savings product of the French, frozen since February 2020 at 0.5%. No big revolution to be expected, but the beneficiaries should still see their interests increase slightly. let’s remember that 1,000 euros paid on a livret A at 0.5% relate 5 euros interest. If you have a larger sum in your savings account, namely 10,000 euros, you will collect 50 euros in interest at the end of the year. With the move to 0.8%, a savings of 10,000 euros on a Livret A would earn 80 euros per year to the beneficiary, i.e. a net gain of 30 euros. Note, the livret A is free of charge, and the interest drawn is exempt from income tax and social contributions.
The limit for Livret A is set at 22,950 euros, for individuals. Remember that the payment of interest can quite exceed this limit. As an indication, associations benefit from a much higher ceiling, at 76,500 euros. Anyone, whether minor or major, can open an A booklet., it is not possible to have more than one 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 (A booklet and Blue booklet) for the same person.
On the other hand, it is quite possible to combine a livret A with a Sustainable development booklet (LDD) or a young booklet. In addition, it is possible to combine regulated passbooks within the same tax household. To close a livret A, all you need to do is contact your banker, by mail or by going to a branch. You must 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.
How are the interests of the Livret A calculated?
The calculation of the interest of the livret A occurs the 1er and 16 of each month, so every fortnight. In other words, if you deposit money on your livret 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 . Have you made a withdrawal? Interest is calculated for 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 passbook by its 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 book.
This is one of the advantages of this regulated savings product. The interests of the livret A are exempt fromincome tax. They are also not subject to social security contributions.