It’s better to get used to the idea: risk-free investments will return less and less in 2025. The European Central Bank (ECB) should indeed continue the reduction in its key rates initiated since spring 2024. The deposit rate has already increased from 4% at the beginning of June to 3.25% in October, and it will gradually move towards 2% in 2025. The return on all risk-free investments will also increase. path of decline, but there remains a reason to rejoice: “With inflation now close to 2%, the real return (after inflation) on regulated risk-free savings has become positive again, at a level not seen since 2009.», recalls Philippe Crevel, the director of the Savings Circle.
The rates for the Livret A and the Livret de développement durable et solidaire (LDDS) will fall from February 1, but they will continue to preserve purchasing power since they will bring in more than inflation. They will therefore remain the best means of investing in precautionary savings in 2025, alongside the Popular Savings Account (LEP) reserved for low-income households.
Livret A, LEP: what to do if your savings account reaches the ceiling?
Booklet A
Yield : 3% net
Potential loss: none
Duration : 15 days minimum
The yield will drop on February 1, 2025
The performance of Booklet A has stood at 3% since February 1, 2023. It has not yet suffered from the reduction in the ECB’s key rates since the spring, since its rate was frozen by Bruno Le Maire, then Minister of the Economy and of Finance, until January 31, 2025. This anomaly makes it the most profitable risk-free and liquid investment on the market. Savers understood this well since they placed a record 428.7 billion euros in their Livret A at the end of September. However, we must prepare for the drop in yield from February 1in application of the calculation formula based on the half-yearly average of the inflation rate and interbank rates rounded to the nearest tenth of a point, with a minimum of 0.50%.
But, even at this level, the Livret A will remain essential as its advantages are numerous: completely liquid, it is guaranteed by the State and its interests are exempt from taxes and social security contributions. It is possible to contribute up to 22,950 euros. The good reflex is therefore to fund it as a priority to isolate your precautionary savings rather than letting them sleep in your current account. How much to spend on it? Prudence dictates keeping between three and six months’ salary in a completely liquid medium to cover unforeseen expenses.
The Livret A is also accessible to minors, but only one can be held per person. The only constraint is that this product, like all booklets, is paid for per fortnight. This means that a sum deposited on the 2nd of the month does not begin to grow until the 15th. In other words, you must leave the money for at least 15 days to obtain remuneration.
Taxation : interest is exempt from taxes and social contributions.
Livret A, LEP, PEL: the returns on your savings accounts from February 1, 2025
LDDS
Yield : 3% net
Potential loss: none
Duration : 15 days minimum
Yield will fall in 2025
The Sustainable and solidarity development booklet (LDDS) looks like two drops of water to Livret A, but payments are capped at 12,000 euros and it is reserved for taxpayers. It cannot therefore be opened by a child, even an adult, attached to their parents’ tax household. However, it is possible to combine a Livret A and an LDDS if you are eligible, which allows you to invest a total of 34,950 euros paid at 3%. This is, by far, the best solution for your liquidity, including when the rate drops from February 1st. It is possible to make a donation to an association directly from your LDDS, which entitles you to an income tax reduction.
Taxation: identical to that of Booklet A.
Livret A, LDDS, LEP, PEL… your savings accounts are very expensive for the State
Bank books
Yield : from 0.10 to 2.75% before taxes
Potential loss: none
Duration :15 days minimum
Yield expected to fall in 2025
Once the ceilings of theregulated savings reached, we must take an interest in bank accounts, the rate of which is freely set by the banks. “However, they are far from overshadowing the Livret A: the yield amounts on average to 0.93% in September 2024 according to the Banque de France», notes Philippe Crevel.
-The banking networks are particularly ungenerous: the passbook account earns 0.10% at BNP Paribas, 0.50% at La Banque Postale or even 0.60% at LCL. However, it is still possible to find better by turning to savings platforms and online banks. If you have a large sum to invest, the ideal is to shop around the market to take advantage of a remuneration bonus reserved for new customers opening a booklet. The best currently offer 4% over two or three months, for example at Distingo Bank, Meilleurtaux Placement, Placement-direct.fr and Renault Bank and even 5% over two months at Cashbee.
Once this period has expired, the standard rate applies. It amounts, in the best case, to 2.75% for the Zesto savings account from Renault Bank. Elsewhere, count on 2.50% at BoursoBank, Cashbee, Distingo Bank, Placement-direct.fr or even Ramify. But, be careful, unlike the Livret A, interest is taxed: a gross rate of 2.50% actually comes out to 1.75% net.
A noter some establishments set up bonuses for their loyal customers on their new payments, in order to encourage them to continue to add to their account. Offers are expected to continue to crumble throughout 2025, to follow the movement of the European Central Bank. You must therefore take advantage of the great promotions while they exist! The real advantage of tax-advantaged savings accounts is the virtual absence of a ceiling. It is in fact generally possible to invest several million euros on these products.
Taxation: interest is subject to single flat-rate deduction (PFU) at the rate of 30%, or 12.8% for income tax and 17.2% for social security contributions. It is deducted at source when interest is paid. It remains possible to choose taxation on the progressive income tax (IR) scale rather than on the PFU. This option then applies to all other financial income of the year.
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Bank accounts: the rate war continues
© Source : Capital
(1) As of 20.11.2024. (2) Taking into account any welcome promotions and the one-time flat-rate deduction of 30%. NP: not relevant, as the establishment does not offer promotions.
Youth Booklet
Yield : from 3 to 4%
Potential loss: none
Duration : 15 days minimum
Reserved for 12-25 year olds, the Youth Booklet can collect up to 1,600 euros. Unlike the Livret A, its rate is not set by the public authorities. Each bank decides on the remuneration it offers, within the limit of a floor equal to the Livret A rate. Some establishments today offer 4%, like CIC, Crédit Agricole, Crédit Mutuel and LCL. 12-25 year olds therefore have every interest in placing their savings in the Youth Account rather than in an A Account.
In other banks, such as BNP Paribas, Hello bank!, La Banque poste, Monabanq or even SG, the Livret Jeune yields 3% and, in this case, there is no advantage to holding it: a Livret Enough since minors have access to it. You can only have one Youth Booklet per person. It must be closed no later than December 31 of the year of 25 years.
Taxation: identical to that of Booklet A.
LEP: good news, BoursoBank offers the popular savings account and its rate at 4%
Popular Savings Booklet (LEP)
Yield : 4% net
Potential loss: none
Duration : 15 days minimum
The yield will drop on February 1, 2025
No need to look any further: the Popular savings account (LEP) is THE most profitable investment on the market, at 4% net of taxes and social security contributions. But not everyone can benefit from it since it is reserved for low-income households subject to resource conditions. To open a LEP in 2024, you had to show a maximum tax income of 22,419 euros in 2022 or in 2023 for a single person (tax notice 2023 or 2024).
Despite its exceptional rate, this regulated product remains largely unknown. According to the Banque de France, there are only 11.4 million LEPs for 19.5 million eligible French people. However, the situation is improving since 2.6 million LEPs were opened in 2023, a record year.
The LEP return is equal to the level of inflation or, if the calculation is more favorable, to the Livret A rate increased by 0.5 points. It has fallen regularly in recent months thanks to the fall in inflation, and will still decrease slightly on February 1st despite a small boost. «The LEP will therefore remain the best risk-free investment», Indicates Philippe Crevel. The payment ceiling is set at 10,000 euros. The good strategy is to fund it as a priority, then place your excess cash in a Livret A. You can only hold one LEP per person and two per tax household.
Taxation:identical to that of Booklet A.
