Towards a significant drop in LEP rates next summer?

Along with the Livret A, the Livret d’Epargne Populaire (LEP) is one of the French people’s favorite savings plans, especially because of its very advantageous interest rate. A rate which, however, is at risk of falling sharply from next summer.

While it was 6%, the LEP interest rate rose to 5% on February 1. This percentage may come down further in the coming months with the fall in inflation. It must be said that this savings product was established by the state to counter inflationary changes. With the reduction in price, the rate of remuneration for this booklet risks decreasing in turn. According to the latest INSEE report on the evolution of inflation in France, published on Thursday February 29, the rise in consumer prices continues to decline, at 2.9% in February.

According to estimates of the same organization, inflation should be around 2.4% in the first half of 2024. A drop that is obviously not without consequences on popular savings account rates. Indeed, in the event that the LEP interest rate is aligned with inflation, it can go from 5 to 2.4% in just a few months. However, this scenario is quickly far-fetched, as the LEP rate is theoretically never lower than the increased rate of Livret A added to 0.5%.

What LEP rates can we expect next summer?

Although the Livret A rate will be maintained at 3% until 2025, its “technical” rate will be calculated by the Banque de France next July. This calculation is crucial to know what the interest rate will be on the Popular Savings Book from next summer. According to Moneyvox, taking into account INSEE forecasts regarding inflation as well as the absence of a reduction in interbank rates, the “technical” rate of LEP should be around 3.70%. In addition to applying this rate as a result of the calculation formula, Bersi can ask the Minister of Economy to limit the reduction to 4%.

This is, for example, what happened for the February 1 revaluation, in which the LEP rate went from 6 to 5%. But despite its rate cut, the LEP will always be one of the most advantageous savings products in France. In January, it registered a net collection of 1.92 billion euros. In 2023, nearly 2 million new savers will have chosen this booklet.