Contrary to our neighbours, where real time dominates, interest on savings accounts is calculated every 15 days and paid once a year, on 31 December. A method that is less favorable to savers, but that no one has the will to change.
A booklet at 3%, a LEP at 6.1%: since February 1, the remuneration of regulated booklets has reached levels that we had not seen for a long time. And it’s probably not over: everything indicates that a new rise will occur next August.
This is obviously excellent news for the tens of millions of French people – more than 80% of the population for the Livret A alone – who trust regulated savings to place their precautionary savings. At 3%, a Livret A having reached the ceiling of 22,950 euros yields 688.50 euros over one year, nearly 230 euros more than at 2%, its old rate.
However, there is a downside: it will take wait until the end of 2023 to reap the benefits of this improvement in regulated savings rates. Indeed, the rule for savings books in general is as follows: their interest is calculated every 15 daysthe 1st and 16th of each month, and paid in one installment, on December 31 of each year.
This rule of fortnights, as it is generally called, is moreover a particularism. France is one of the rare countries to practice this method of calculating interest, explains the economist Philippe Crevel, an excellent connoisseur of the subject.
Day-to-day calculation more favorable to the saver
Outside our borders, it is another rule which, in general, prevails: the interests are calculations every day and paid into the account at the end of every month. A calculation method that is more favorable to savers.
Not necessarily in terms of the amount of interest earned: in this method of calculation, the effects of monthly capitalization – what is called compound interest – are neutralized, as we explained to you in this article on the calculation of day-to-day interests.
On the other hand, the day-to-day calculation has two advantages. One, it allows touch his interests every month, and therefore to dispose of them as you see fit: to spend them, transfer them to another medium, etc. Two: it allows limit the loss of income generated by the rule of fortnights when you make withdrawals from your savings account.
A 3% booklet: this trick to maximize your interests
A bicentenary rule…
Where does this French specificity come from that we could do without? From another tricolor particularism: the Livret A. The rule of fortnights, in fact, is intimately linked to the venerable savings account, created more than 200 years ago. The origin of this rule is old, it probably dates from the beginnings of the Livret A, confirms Philippe Crevel. For the sake of simplicity, a time when there were no computers…
Banks now have computers. They are even becoming, a little more every year, technology companies, capable of instantly updating their customers’ balances or transferring money from one account to another, all over the world, in a matter of seconds. Yet, in the age of real-time banking, the old fashion of calculation remains the norm.
This survival is explained primarily by regulatory barriers. The fortnightly rule for regulated savings books is included in the Monetary and Financial Code: banks cannot therefore derogate from it. This is also true for non-regulated savings accounts, these B savings accounts specific to each bank. Here again, the fortnightly calculation is part of a general decision (1)relating to the conditions for the receipt of funds by banks, dating from… May 1969!
… in the interest of the banks
The regulatory issue, however, does not alone explain the maintenance of the rule of fortnights. Dozens of examples show this: the law knows how to adapt to changein particular that made possible by technological progress.
The problem is elsewhere: no one in France, to our knowledge, does not publicly call for a change in the method of calculating interest on booklets. Especially not the banks. The old current system is rather in favor of credit institutions and we understand that they are not jostling at the gate to make it evolve, notes Marc Tempelman, co-founder of the Cashbee savings application, who continues: In the 2000s, some banks [HSBC France, notamment avec son Compte Epargne Direct disparu en 2012, NDLR] attempted a marketing stunt by offering day-to-day remunerated accounts. It hadn’t had much success. It must be said that the difference is difficult to explain and that the calculation must be carried out on large sums for it to really make a difference.
The subject is not not a priority on the part of savers either. Calculate day-to-day interest? Why not… This would make it possible to maximize the perceived interests, announces Jean-Yves Mano, president of CLCV, one of the main consumer associations in France. Before qualifying: The priority of the CLCV today is rather to modify the formula for calculating the rate of the Livret A to limit its disconnection with inflation.
Should the Livret A really protect you from inflation?
What about the public authorities? Asked about the subject, the Banque de France and Bercy had not yet responded at the time of writing these lines.
The Bunq Exception
Placing money and earning interest every month is possible in France. A nobank, in fact, distributes a savings account in France, currently remunerated at 1.56% gross and operating on this model. Her name? Bunq, a 100% mobile establishment from the Netherlands.
(1) General Decision No. 69-02 of May 8, 1969 of the National Credit Council relating to the conditions for the receipt of funds by banks