Some savings products that were introduced decades ago sometimes have incomparable advantages compared to equivalent products currently on the market. Here are three examples of old investments to hold on to if you are lucky enough to own them.
The best soups are made in old pots. The adage can also be applied to savings. In a current landscape still marked by more than 10 years of low rates, certain risk-free investments, sometimes several decades old, appear to be real bargains, in terms of remuneration and tax advantages. We detail 3 examples here. Warning: if you are lucky enough to own one of these products, think twice before getting rid of it!
The holy grail of old PELs
2013 – 2016: a golden age for the ELP. During these 4 years, the French have placed an additional 66 billion euros in their Housing Savings Plans, i.e. an average of 16.5 billion per year (1). In particular, it held high the other flagship regulated savings product, the Livret A, which only accumulated 2 billion net inflows over the period! The reason is simple. The ELP benefited at the time from a unbeatable pay rate for a risk-free investment: 2.50% until January 31, 2015, then 2% until January 31, 2016 and another 1.50% until July 31, 2016. recr: alerted by the banks of the cost that the success of the PEL represented for it, Bercy undertook to make the product less attractive, by reducing its floor rate to 1%, then by taxing the interest generated.
The Housing Savings Plan, however, is not not an investment like the others. First of all, he benefits from a particularly interesting characteristic: his remuneration is generational, i.e. the interest rate set at subscription remains in effect throughout the life of the plan. Then, the lifespan of PELs opened before March 1, 2011 is not limited: the so-called waiting phase, during which you can no longer supply your PEL, can continue indefinitely.
Result: if you have an old PEL, it earns you much more than any other comparable product that you could currently open, despite the imposition of interest which occurs from the 12th year of life: 2.07% net, for example , if you opened it after August 1, 2003 and much more if it dates back to the 20th century. Be careful though: with such remuneration, your bank could be tempted to make you close your plan: hold on!
Old generations of the ELP before 2011
The People’s Savings Plan, 18 years later
19 years old! It has been 19 years (since September 25, 2003 precisely) that it is no longer possible to open a popular savings plan. However, almost two decades later, this distant cousin of the PER still posted, at the end of 2019, an outstanding amount of more than 60 billion euros. (2). This is no coincidence: holding a PEP remains a good deal, for two reasons: a full capital guarantee and an income tax exemptionwhether you opt for a lump sum or life annuity.
Savings: what to do with your old PEP?
Its benefits don’t stop there. As long as the 92,000 euros, the regulatory payment ceiling, has not been reached, a PEP can continue to be funded. He can also be transferredfor a fee of one hundred euros, in order to seek better remuneration.
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Some insurers have a good sense of the bargain by maintaining their catalog of PEPs destined to welcome his transfers. They generally provide returns comparable to current high-end life insurance policies. The only limit: to guarantee the capital, an amount equivalent to the cumulative payments made on the plan must be placed in euro funds, whose remuneration is far from reaching peaks: 1.3% on average in 2021, but beyond 2% for the best contracts. Capitalized interest, on the other hand, can be invested in more profitable vehicles, such as real estate funds.
Life insurance: the best contracts
Life insurance: old contracts that can be worth gold
For a long time, very old life insurance policies, prior to 1983, benefited from a particularly attractive exception: a total income tax exemption, including income from recent payments. This is no longer the case: the finance law for 2020 has put an end to this historic advantage. Capital gains derived from payments after December 31, 2019 are subject to the current tax standard. However, the benefit remains in effect for old installments.
However, this exemption is not the only potential advantage of old contracts. Some, dating from the last century, benefit from guaranteed annual returnsfixed at the time of super advantageous levels if we compare them with the current rates, marked by twenty years of uninterrupted fall: 3% or even 4%, compare with the small 1.3%, average rate of return in 2021 according to France Assureurs.
(1) Source: Bank of France. (2) Source: Banque de France and French Insurance Federation