Savings passbook rates are rising. The Livret A yields 3% and some bank books offer boost rates of 4%. But there is another equally interesting investment, or even more: the term account.
Seduction operation. While the Livret A is attracting money from the French like never before, banks are scrambling to keep savers’ deposits. Indeed, with a remuneration that has been multiplied by six in just one year, 3% since February 1, the Livret A held by 55 million individuals is a hit, when the price increase exceeds 5%.
Indeed, households have an interest in leaving a minimum of money in their current accounts which are not remunerated. Last October, nearly 530 billion euros were still amassed there, an average 17,600 euros per household! Current accounts that have been gradually emptying since with the rise in rates.
The success of the Livret A account pushes the rates of term accounts
Between January and March 2023, net inflows on Livret A savings accounts increased by 20 billion euros, a level not seen since 2009. The cumulative outstandings of the Livret A savings account and its cousin the Livret de March the unprecedented sum of 535.1 billion euros. An impressive amount, almost half of which is entrusted to the Caisse des Dépts, in particular to finance the social housing policy.
To avoid hemorrhage, the banks are boosting the rates of their house bank books. If according to Banque de France statistics, the average rate was 0.50% in February, compared to 0.09% a year ago, some brands are now posting offers with a base rate of 2%, boost up to 4% over the first three months.
The comparison of the offers on the best bank books
An interesting alternative therefore to place your precautionary savings, once the ceiling of the Livret A and the LDDS has been reached, 22,950 euros in the first case and 12,000 in the second. And the people concerned are more and more numerous, underlines the economist Philippe Crevel. Given the size of the collection in recent months, 10% of Livret A accounts would now be at the ceiling against 8% in 2021.
Should we raise the ceilings of the Livret A 30,000 euros?
The increase in the number of Livrets A and LDDS to the ceiling should limit payments for savers, in particular the wealthiest who will have to refer to superlivrets, bank books, term deposits or euro life insurance funds, explains Philippe Crével.
Indeed, some establishments also promote another risk-free product to attract customer deposits. Its rate is even potentially more interesting than a classic bank book: the term account, which comes out of a long desert crossing, because of its low past earnings.
New offers are on the rise
To take advantage of it, you must accept that his savings are blocked between 3 months and 5 years. The interest rate then increases according to the duration of the immobilization of the funds defined at the time of subscription. It is then guaranteed, except in the event of early withdrawal.
A sign that the term account is making a comeback, Boursorama Banque has just launched one last month, with very attractive remuneration: 3% over 12 months. But with a major constraint: the minimum deposit is 30,000 euros. Over the same period, the Raisin platform now offers 3.05%, from 500 euros of deposits via the term account of the Swedish bank Klarna Bank.
For its part, Distingo Bank, formerly PSA Banque, announces 2.60% from 1,000 euros. The subsidiary of the Stellantis group has also just expanded its range of term accounts by launching a product which is to finance 20% of the electric vehicles sold by the automobile group. Baptized Green, and accessible from 1000 euros of deposits, it displays a rate of 2.50% over a period of 10 months.
At present, term accounts are mainly offered by specialized establishments like Distingo Bank, or foreign banks accessible in France from the Raisin platform. The big national banks are on the back of this market. At present, it is the online credit institution Younited which also displays the best remuneration: 3.5%. But for that, it is necessary to immobilize at least 2000 euros over 5 years.
The advantage of the term account over the Livret A
Blocking your money over the long term, a strategy that could prove to be profitable, however, by betting on the decline in inflation. Indeed, the Livret A rate, calculated in part on the rise in prices, will eventually fall. According to the latest estimates from the Banque de France, inflation would drop from 5.4% in 2023 to 2.4% in 2024 and even 1.9% in 2025.
Based on this scenario, placing some of his precautionary savings on this product may not be a miscalculation since his rate is set in stone until maturity. And this, contrary to that of the Livret A, which can be revised twice a year, on February 1 and August 1, or at the rates of bank books whose remuneration can vary at any time.
One thing is sure, before choosing a term account, you have to compare them since the rate varies according to the amount deposited and the duration of the fixed asset chosen.
Another essential element not to forget: bank books, like term accounts, are taxed, unlike regulated savings books. The flat tax of 30% (17.2% for social security contributions and 12.8% for income tax) must be deducted from the amount of interest received. You can also choose to waive this single flat-rate deduction, by opting for taxation at the progressive scale, a more advantageous option in certain cases.
See the term accounts with the best rates