The Livret A book continues to capture the savings of the French: it expanded by nearly 20 billion euros in the first quarter, a record since 2009, thanks to a rate of remuneration of 3%. Last year, it took seven months to exceed this level of net receipts.
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The month of March, with deposits exceeding withdrawals by 4.17 billion euros, shows a slowdown compared to January (+9.27 billion euros) and February (+6.27 billion euros). However, it remains historic for a third month of the year.
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The Livret A, which has some 55 million holders, “benefited, for the third consecutive month, from the “rate” effect, the increase to 3% having taken place last February”underlines in a note the director of the Circle of savings, Philippe Crevel.
Its cousin, the Sustainable and Solidarity Development Booklet (LDDS), also remunerated at 3%, benefits from this momentum. Its outstandings swelled by 1.8 billion euros last month, unheard of for the month of March. The cumulative outstandings of these two products are therefore changing at unprecedented levels: at March 31, they weighed 535.1 billion euros.
Pay rate below inflation
These two investments had already attracted 40 billion euros in additional assets last year, driven by large deposits and interest paid at the end of the year.
Measured at 1,874 billion euros by France Assureurs at the end of February, the outstanding amount of life insurance remains however much higher.
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But booklets A and LDDS have benefited since last year from favorable arbitrations on the part of savers, who see in them the best guaranteed return possible for their savings.
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Households “continue to recycle their cash by transferring it to their Livret A and their LDDS”observes Philippe Crevel.
Although their rate of return remains well below inflation, it significantly exceeds the yields of euro life insurance funds, estimated on average at 2% by the ACPR, excluding tax.
Financing of social housing
The money deposited in Livret A and LDDS savings accounts, capped at 22,950 euros and 12,000 euros respectively excluding capitalized interest, is guaranteed by the State and exempt from taxes and social security contributions. So many good reasons for directing new savings towards these regulated vehicles, but also for housing the money dormant in current accounts.
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By way of comparison, only a little more than 2 billion euros were collected by life insurance in January and February, indicated at the end of March France Assureurs.
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 to energy savings in housing.
Next review August 1
A new regulated savings product could also see the light of day. The government intends to create a “future climate savings plan” for miners to finance economically virtuous projects.
Asked by AFP, the Banque de France clarified that it had not proposed to the Ministry of the Economy an early increase in the Livret A rate on May 1, confirming information of the “Parisian”. The next revision of the rate will therefore take place in July and will be effective on August 1st.
