How to make your money grow without taking too many risks? The banks offer a solution that should delight the French, especially the most modest.
This has been the major concern of households for many months. While all bills are increasing and wages are struggling to be revalued or are not, how to limit the loss of purchasing power? Limit your expenses, review your priorities in the organization of the budget, but also try to generate interest through savings. On average, about 15% of income is devoted to savings, although this inevitably varies according to the remuneration received. But how can you make this money grow without taking any risk while having it available when needed?
Up to 400€ interest per year
For this, there is a much more interesting investment than the traditional livret A and its 56 million open accounts, making it the favorite product of the French. Its yield, at 3%, is in competition with another equally secure and easily accessible booklet, yielding double: the LEP, the popular savings account. This financial investment is offered in all banks and offers a very attractive return since its rate is set at 6% until the end of 2023. What limit the impact of inflation if it is sufficiently provided .
Because the calculation of interest is done according to a complex formula taking into account the number of fortnights (24 per year) during which the amount present remained on the booklet. So there’s no need to rush to add to your LEP at the end of the year thinking you’ll get the interest, only much less interest will be paid. It is better to deposit as much as possible at the very beginning of the year and only make withdrawals in the event of a genuinely necessary need because the outflows of money mechanically reduce the return at the end of the year. Or withdraw the money from a booklet that pays less.
With interest that can approach €400 depending on the amount invested, the LEP has something to seduce. However, the maximum amount that can be paid into it is limited to €7,700, although it will increase to €10,000 in October. Above all, not all French people can open a popular savings account. This is in fact conditional on income and concerns only about half of the French.
What are the conditions for opening a LEP?
Indeed, to be able to subscribe to a LEP, his reference tax income (RFR) must not go beyond a certain ceiling. The RFR is indicated on its notice of declarative situation provided by the taxes each year. This corresponds to the amount of income over the year, deducted from the various tax systems allowing to reduce its tax.
Let’s take the example of a single person, without children: they must not have an RFR greater than €21,393. According to INSEE data, this corresponds to more than 70% of the population. For a couple with two children, the RFR ceiling not to be exceeded is €44,249. More than half of tax households in this situation can thus open a LEP. The details of the ceilings below per family quotient share:
- 1: €21,393
- 1.25: €24,250
- 1.5: €27,107
- 1.75: €29,964
- 2: €32,818
- 2.25: €35,678
- 2.5: €38,532
- 2.75: €41,389
- 3: €44,249
- 3.25: €47,106
- 3.5: €49,963
- 3.75: €52,820
- 4: €55,677
- 4.25: €58,534
- 4.5: €61,391
- 4.75: €64,248
- 5: €67,105
- 5.25: €69,962
- 5.5: €72,819
- 5.75: €75,676
- 6: €78,533
- Additional quarter share: €2,857
- Additional half share: €5,714
In France, only half of the people eligible to open a LEP have one. 9.5 million accounts are open but 10 million can still be. The attractiveness of this product’s yield could speed things up.