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The Livret A is by far the most used financial tool in the country. According to figures from the Ministry of the Economy, at the end of 2022 there were nearly 56 million Livret A accounts in the country, including 55.1 million held by individuals. Its total outstanding amount of 375 billion euros (including 350.2 billion in savings for individuals) is used to finance social housing and urban renewal. Everything you need to know about the French's favorite way to save.
Livret A is a product accessible in all banks since 2009, which can be opened by any natural person, and certain legal entities. This financial instrument is also open to minors, although people under 16 cannot make withdrawals. Each person can only have one Livret A.
Everything is done by the authorities to facilitate the acquisition. All you need to do is present an identity document, proof of address less than 3 months old, and make a transfer of 10 euros to obtain the ticket. The owner can then make transfers by cash and check at the counter, as well as by transfer from their bank account. Note that, since July 2023, it is even possible to transfer a sum from an account established in a different bank than the one where the Livret A was created.
The Livret A is among the savings tools offered to financial novices, which is surely the most generous. Because it is possible to deposit a total of up to 22,950 euros for a natural person (and 76,500 euros for a legal entity). In comparison, the popular savings booklet (LEP) has a ceiling of 10,000 euros, while that of the Sustainable and Solidarity Development Booklet (LDDS) is set at 12,000 euros.
In order to attract as many people as possible, the public authorities have incorporated very few constraints for this Livret A, with an interest rate which has been attractive in the past, and which tends to become so again. It is currently 3% per year, which means that for a full Livret A, on which 22,950 euros have been deposited, the saver receives 688.50 euros at the end of the year. p>
Following traditional calculation methods, the interest rate should have been higher in 2023, but Bruno Le Maire preferred to maintain a certain moderation in the increase in rates, to protect social landlords. In return, he promised that this 3% interest rate would not drop immediately once inflation fell.
Political powers have imposed extremely few constraints on savers. In fact, they even seem non-existent. It is in fact possible to withdraw your money at any time, with no limit on the amount.You can thus empty the account whenever you want.
In addition to paying you from savings that are completely liquid, the Livret A is not blocked when you reach the ceiling of 22,950 euros . Because if you can no longer add money, the interest on the capital is still collected at the end of each year to be added to the account. Which, in a sense, allows you to exceed the initially imposed ceiling!
Finally, last little pleasure, know thatthe interest on the Livret A is quite simply exempt from taxes!The only small disadvantage of this tool at the moment is that ;it is impossible to transfer it from one bank to another. To open it in a new establishment, it is necessary to close the one created in the previous bank. But who knows, the State could one day decide to facilitate the transfer?
Is Livret A interesting for you? It seems that the answer is yes, regardless of your investor profile. For beginners, it is useful to be able to benefit from returns on capital that is being built up while having the possibility of withdrawing the necessary money in the event of a possible hard hit. Livret A can thus serve as a “second current account” where the majority of savings will be deposited.
But even more experienced investor profiles should not ignore the Livret A. Because although its remuneration may seem low compared to other much riskier operations (stock market, cryptos… ;), it nevertheless remains clear that no one can do without precautionary savings. In addition, with a view to diversification, it is as important to invest in different assets as in instruments with medium or very high risks.
The rate The interest rate of Livret A also has the characteristic of being calculated taking inflation into account. If mechanically the rate is always below the increase in prices, it also appears for many households not wishing to make risky investments as a lesser evil, making it possible to limit the damage.
In short, it seems logical for any French person to have their Livret A active alongside their current account.