With the inflation rate stagnating, regulated savings products, without risk to your capital, are competitive. After changes to interest rates this summer, the period of freezing the Livret A rate will soon end, but should we expect a lower rate?
According to the latest statistics from INSEE, the savings rate of the French exceeds 17%. This phenomenon is explained by increased caution of households in the face of the economic and political uncertainty that currently reigns in the country. For the moment, the increase in prices is stable and this allows savers to enjoy a advantageous yield of their savings even on products like LDDSthe LEP and the livret A. If LEP holders received bad news last month due to a drop in the current rate, it seems that more of the same kind is coming regarding the livret A. All the details.
Livret A: what will the new rate be in 2025?
End of frost in February 2025: good or bad news?
Since February 1, 2023, the rate of the livret A, one of the favorite savings products of the French, is frozen at 3%. However, this does not prevent holders of this booklet from benefiting from a advantageous taxation and interest. This booklet is capped at €22,950 and can earn up to €677 in interest per year. Furthermore, when the ceiling for the Livret A is reached, all interest produced is exempt from thetax and some social contributionsFor now, savers can still benefit from the yield offered by this product, but things are likely to change as of February 1, 2025, the end date of the freeze, indicates Thanks for the info.
Two essential parameters taken into account in the calculation
L’inflation has been stable for a while, but this situation risks penalizing savers. Indeed, the frozen rate of the livret A could be lower in February 2025, underlines economist Philippe Crevel. In this logic, we must expect a drop in the rate of pay considering the elements included in the calculation. According to the decree of January 27, 2021, the rate of this booklet cannot be less than 0.5%. This percentage represents the arithmetic mean between these two elements:
- The half-yearly average of short-term €STR rates in the eurozone,
- Inflation measured by the half-yearly average of the variation over the last twelve months considered by INSEE.
What can we expect in February 2025?
The director of the Cercle de l’épargne and economist, Philippe Crevel, states that inflation will be around 2% in the second half of the year. Let us recall that in August, consumer prices excluding tobacco increased by 0.5 points for one month. The calculation of the new rate includes key rates which plan to drop from 3.66 to 3.4% soon and the INSEE fears that a new drop will occur before the end of the year. However, it must still be recognized that the livret A has allowed millions of savers to make money despite inflation.
Can the government decide to change the rate?
In principle, the Livret A rate is determined by a precise calculation formula. The majority of economic analysts expect the key rates to fall in December, but this will not have a major impact on the calculation of the half-yearly average. On the other hand, the government can decide to impose a high return on investment obtained through the formula. However, the chances of this action being taken are reduced.
After the Livret A rate, what other rate is likely to fall?
The LEP
If on August 1st the rate of the popular savings account went from 5 to 4%, a further drop is expected in the coming months by decision of Bercy. Referring to the figures cited above, the technical rate could be 3.10%. In this case, the government can opt for a slowdown in the decline or an increase.
The LDDS
THE LDDS rate is the same as that of the livret A, which means that it will also undergo an increase or a decrease. For the moment, we cannot determine the new rate, but according to the economist Philippe Crevel, it will be lower.
