You can (finally) hope to earn money again with your Livret A account. For the first time in more than three years, inflation fell below the rate of the French's preferred investment in February.
According to the first estimate from INSEE, published Thursday, the rise in consumer prices slowed further last month, to +2.9% over one year, after +3.1% in January.
At the same time, the annual interest rate for Livret A is 3%.
Which means that its real return, over one month, has returned to positive territory (+0.1%).
And therefore it is profitable again.
“But be careful, it is year-on-year inflation which is now lower than the Livret A rate. Annual inflation is still higher than 3%
,” specifies Philippe Crevel, director of the Cercle de l’Épargne.
If we look annually, the curves have not yet crossed.
But savers can look to the future with confidence.
Indeed, INSEE forecasts that inflation will continue to slow down in the coming months, until it settles at around 2.5% over one year from the spring.
With the Livret A rate frozen at 3% until January 2025, Philippe Crevel does the calculations:
“For a Livret A filled with 6,500 euros, i.e. the average outstanding amount according to the Banque de France, the real gain expected in 2024, after taking into account inflation, would be 32.50 euros.”
An amount which certainly seems derisory, but
“with the Livret A, the gains have never been extremely significant”
, underlines the economist.
Also read These investments which will do better than the Livret A in 2024... and those which will do less well
A loss of 129 euros in real value in 2023
Despite everything, it is a small event for the 55 million French people holding a Livret A. Because to find trace of the last time that its rate was higher than inflation over a year, you have to go back to December 2020 ( 0.5% against 0% inflation).
“For example, in 2023, the real return on Livret A was negative 2%.
Which means, for an outstanding amount of 6,500 euros, a loss of 129 euros in real value
,” calculates Philippe Crevel.
“Since the 2000s, there was a tendency for the Livret A to be higher than inflation, but we had gone back into the negative with the inflationary wave
,” recalls the savings specialist.
In the 1980s, the formula for calculating the Livret A rate did not yet exist and inflation peaked at high levels, negative real yields were commonplace.
“In 1981, it reached -5.4%
,” underlines Philippe Crevel.
Today, the formula for calculating the Livret A, based in particular on the consumer price index (CPI) excluding tobacco, better protects savers.
And again, it is not necessarily always followed by the government.
For example, if the Livret A rate was maintained at 3% on February 1,
“the arithmetic result (of the calculation formula) would lead to a Livret A rate at 3.9%
,” indicated the Banque de France. France in a press release in January.
“
The higher the Livret A rate, the more expensive the loans are.
I do not want to jeopardize the construction of tens of thousands of homes or the development of thousands of small businesses
,” argued the Minister of the Economy Bruno Le Maire on TF1 in July 2023 to defend the freeze until 2025.