Livret A What is your loss from a rate freeze?

The National Institute of Statistics and Economic Studies (INSEI) announced a further slowdown in inflation to 2.3% in a year to March 2024. There is obviously good news for Livret A holders, given that inflation is lower than the rate applied to this booklet. THowever, other factors should be considered.

Leverat A, undoubtedly the most popular savings product in the country, is proving to be beneficial. If we rely on INSEE forecasts for the current year, it should offer more remuneration than the increase in prices throughout 2024.

However, there are other factors to consider, which put the benefits into perspective. If inflation is confirmed at 2.5%, the yield on Livret A will be 0.5% (3% of Livret rate – 2.5% inflation rate). However, Livret A’s block rate penalizes subscribers and here it is:

Leverage is an interest rate index, rounded to the nearest quarter point, of the highest of the last twelve months of inflation, measured by the last twelve month difference in the Insi index of consumer prices for all households. quarter of points, as well as interbank rates (at which banks lend) during the same period.

Considerable loss for Livret A subscribers

Calculating the average inflation between July 2023 and December of the same year, it is 4.1%. For its part, the semi-annual average of interbank rates for the same period was 3.8%. Considering these two components, the result is 3.95%. If we round this figure as stipulated in the rule for calculating the Livret A rate, the latter should increase from 3% to 4% on February 1.

A 1% interest loss on returns on a savings account is hefty. For example, for someone saving 5,000 euros, the difference in benefit between a rate of 3% and 4% is 25 euros between February 1st and August. 1 When the rate would not have been blocked it would have to be revised. This loss of earnings increases as the level of savings increases. Thus, for 10% of a Livret A account with a ceiling of 22,950 euros, there would be a shortfall of 114.75 euros (459 euros of interest compared to 344.25).

It must be said that the net collection of Booklet A at the beginning of the year is less. HASDuring the month of January, Livret A recorded a net collection of only 2.27 billion euros, a significant decrease compared to the same period of the previous year (three and four times less compared to January 2022 and 2023, with 6.25 billion euros and 9.27 billion). Euro respectively).