In France, the vast majority of current accounts are not remunerated. In other words, the money available immediately on the account of the French therefore does not generate a return for the latter.
This measure is linked to a historical compromise: the banks did not remunerate the current account, in exchange for the free use of checks. However, individuals have no real interest in letting their money sit in their current account, especially when market rates are soaring.
With interest rates rising and inflation picking up, not generating a return on your capital is a mistake. The cost of living, which increased by 5.2% on average in 2022 (according to INSEE), penalizes French savings. To do nothing is to impoverish.
A Livret A which goes to 3%
While it only remunerated 0.75% net at the start of the pandemic, the famous Livret A has seen its performance soar in the past year. First last August when it went to 2% net, then from February 1, 2023 when it will go to 3%. On the advice of the Banque de France, the Minister of the Economy Bruno Le Maire endorsed this rate hike which should benefit the 55 million French people holding a Livret A.
Rather than letting your money sleep in the current account, it is advisable to migrate it – at least – to the Livret A. This investment has the advantage of being fully guaranteed by the State: you therefore have no risk. to see your capital melt away over the years. In addition, your money remains available at all times and you can make a withdrawal whenever you need it.
The only constraint: the minimum amount to deposit or withdraw is 10 euros. Note that the Livret A is however capped at 22,950 euros deposit per person. If you have reached the maximum allowed, you can transfer the excesses to the LDDS, which follows similar characteristics (and yield). Only one Livret A is authorized per person.
To give you an idea of the performance, this 3% would earn you 688.50 euros in interest over one year if you deposit 22,950 euros in it.
Why transfer your capital before February 1?
For Livret A, as for most savings accounts, interest on the investment is calculated twice a month. The amounts paid generate interest from the first day of the fortnight following the payment or transfer (the 16th of the same month or the 1st of the following month). It is therefore advisable to deposit your money before the 1st of the month or before the 16th of the month.
If, for example, you make a deposit on the 2nd of the month, your money will not earn interest until the 16th. Similarly, if you deposit funds on the 20th of the month, you will have to wait until the 1st of the following month. to start earning interest. In the same logic, it is therefore better to withdraw your capital once the fortnight has passed. Any incomplete period will deprive you of interest.
The fortnightly interest rule implies that a period of fifteen days (1 to 15 or 16 to 30) is required to obtain interest on its capital. If you want to ensure the 3% net of the Livret A from the first day of February 2023, you will therefore have to deposit your funds there before the end of January.
The Livret A does not offer a daily return, so you have to be vigilant about when to deposit or withdraw funds.
Calculation of the Livret A rate © Service-public.fr
Unregulated booklets
While the Livret A and LDDS are capped at €22,950 and €12,000 respectively, there are alternatives that offer similar returns with very little risk. These two investments are guaranteed by the French State, which ensures a certain serenity in the investment.
However, there are non-regulated savings books, not guaranteed by the State, which offer a very low return/risk ratio. For example, Fortuneo currently offers a rate of 3% gross annually (from which the 30% single flat-rate deduction will have to be withdrawn) for 4 months for a limit of 100,000 euros. The booklet is guaranteed by the bank, which is none other than Crédit Mutuel Arkea (parent company of Fortuneo), which is already a guarantee of credibility.
Similarly, BforBank is currently offering 3% annual gross for two months, for an amount of 100,000 euros. Boursorama Banque, Monabanq or Hello bank! do not participate in these super-savings books and are content to offer remuneration between 0.05% and 1% gross per year.