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Inflation remains at a high level (4.9% in September 2023) and interest rates continue their rise that began almost two years ago. If this situation is unfavorable for borrowers, it is on the other hand beneficial for… savers. If you have a personal fortune, this will allow you to receive more money if you invest it.
Since February, the Livret A offers remuneration of 3% net per year . The Minister of Economy and Finance announced that this rate would be maintained over the next 18 months. While this rate was close to 0% a year and a half ago, this is good news if you have money to put to work.
An investment with zero return
France is one of the countries which authorizes banks not to remunerate the money deposited in their customers' current accounts. This practice dates from a historic agreement between banks and the government which provided for free checkbooks in exchange for no remuneration. As checkbooks are used less and less, it would be great if the government changed its position!
Leaving your money in a current account doesn't bring you anything… but it even costs you money. In fact, you pay account maintenance fees, intervention commissions or even fees in the event of an overdraft. Furthermore, you lose purchasing power because of inflation which reduces the real value of your money at any given time. What you may not know is that the bank does not bother not to invest your money (even if you have the impression that it is in your account): she will therefore receive income thanks to your capital that you leave lying around in the current account.
< p>Obviously, leaving some money in the current account is obligatory– to finance at least the expenses of everyday life. In general, it is standard to have around one month's salary in this account. But everything else, you can move towards liquid and more profitable savings accounts. The government is also motivating the French to put their money to work without risk, in particular by increasing the Livret A rate.
Why transfer everything before the end of October?
If you have money to (move) from your current account, you must therefore put it in savings accounts which offer you a return greater than 0% and which are without any risk. The Livret A and the LDDS are the two most advantageous risk-free investments at the moment: they guarantee you a rate of 3% net per year, without tax or social security deduction.
These two booklets are guaranteed by the French State: you therefore have no risk on your savings, they are not going to disappear. Furthermore, these savings accounts are liquid: you can transfer your money at any time from your Livret A to the current account if you need to. If you have an exceptional expense, you can therefore migrate your money to the current account in a few seconds to pay it.
Be careful, however, of the fortnight rule – which wants interest to be calculated only on the first and sixteenth days of the month. You should therefore avoid withdrawing or depositing money between these two dates. This is why it is advisable to invest your money before November 1st in Livret A, therefore before the end of October. If you place it on November 2, you will start earning interest only from November 16.