The Livret A “will go from 0.5% to 1%”, announced Bruno Le Maire on TF1. “For the People’s Savings Book (LEP), it’s more than a doubling, it will go from 1% to 2.2%,” he continued.
The Minister of the Economy confirmed on Friday the increase in the Livret A rate from 0.5% to 1% from February 1, a first in more than ten years, following the recommendation of the Governor of the Banque de France. The Livret A “will go from 0.5% to 1%”, announced Bruno Le Maire on TF1. “For the People’s Savings Book (LEP), it’s more than a doubling, it will go from 1% to 2.2%,” he continued.
The Minister therefore chose to follow the recommendations made earlier in the day by the Governor of the Banque de France François Villeroy de Galhau, in charge of calculating these rates. A rate of remuneration of 1% “would be likely to better ensure the remuneration of the holders of the Livret A, without creating too high an additional cost, in order to preserve the financing of social housing”, specified the governor. The Livret A is used in particular to finance social housing in France.
The last increase in the Livret A dated back to August 2011
Its rate of remuneration is calculated twice a year by taking the average between, on the one hand, the average inflation rate of the last six months and, on the other hand, the average of the interbank rates, at which the banks exchange short-term money.
The mechanical application of the formula “would lead to a Livret A rate of 0.8%”, however explains the Banque de France, which chose “in view of inflation in the second half of 2021” to round above , at 1%. The Minister of the Economy also insisted on the importance of the LEP, an investment reserved for people with modest incomes (a maximum of 20,296 euros per year for a single person) which “protects better against inflation”.
The last increase in the Livret A dated back to August 2011, when it went from 2 to 2.25%. It has only stagnated or fallen since then, falling in February 2020 to 0.50%, a historic low. Despite a relatively low level of remuneration, the Livret A has become a safe haven investment for savers during the health crisis which has seen its outstandings jump. Its total outstanding amount was 343.4 billion euros at the end of November, according to the latest figures from Caisse des dépôts.
As of December 31, 2020, the number of Livret A savings accounts stood at 55.7 million, according to the Banque de France.
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