The 2023 life insurance rates will be announced one by one over the coming weeks. While waiting to know the remuneration of your contract, here is how much it will have to rise to really beat the Livret A rate. Be careful, exceeding 3% is not enough! Here’s why.
The life insurance remuneration announcement season has begun. One after another, insurers will reveal the performance of their funds in euros. Information eagerly awaited by savers. But will this remuneration be higher than that of the Livret A for the year 2023? Not so sure.
To reach the same performance as the Livret A over the whole of 2023, which was 2.92% on averageyour life insurance contract must be paid 3.60% net of management fees. For what? Because the remuneration of your fund in euros is each year subject to social security contributions (17.2%), a charge which does not concern the Livret A.
Can we hope to beat the Livret A with life insurance?
Why 2.92% ct Livret A for the year 2023? Certainly, the rate of this regulated savings account favored by the French currently stands at 3%. A rate fixed until January 31, 2025. But the Livret A was not paid 3% throughout the year 2023: it in fact went from 2% to 3% on February 1. Result, LThe average remuneration of the Livret A last year was therefore 2.92%. So by having kept 22,950 euros (the maximum payment ceiling) in your Livret A throughout the year, you obtained 669.38 euros in interest for example.
How much will I get
my A booklet in 2023?
I had
as of January 1, 2023
My booklet A…
–
the end of the year 2023*
*For a stable amount saved in your Livret A
throughout 2023
Livret A: how much interest will you earn in 2023?
Only the very best funds in euros will beat the Livret A in 2023
Concerning life insurance, experts have estimated the average expected return on euro funds in 2023 at 2.50% with contracts reaching up to 4.50%. Rates net of management fees but gross of social security contributions. These contributions, which amount to 17.2%, will therefore reduce the remuneration of your contract. For the moment, only a few insurers have communicated on the performance of their contracts. Here they are.
Milleis Vie, the insurance subsidiary of the private bank of the same name, announced the remuneration of the fund in euros for the Milleis Horizon Vie, Milleis Horizon Capi, Epargne vie Milleis, Capi Milleis and Barclays Prestige contracts at 2.75% net of management fees. A passing rate 2.27% after deduction of social security contributions, i.e. below the Livret A remuneration. Madder for its part, announced a rate 3.50% net of management fees. After social contributions, the net remuneration for the year 2023 amounts to 2.90%, almost the same as Booklet A… but very slightly lower. In short: to say that the Garance euro fund beat the Livret A over the past year would be an erroneous statement.
For the moment, no life insurance beats Livret A for the entire year 2023!
For the moment, the only contract that beats a priori Livret A is the brand new Direct Placement Euro+ contract which shows a return of 4.10% for the year 2023, or 3.40% after deduction of social security contributions. But be careful… This remuneration must be put into perspective since it only concerns a very limited period: a little over a month. Clearly, placing 1000 euros in the month of December 2023 was more profitable on the euro fund of this new contract than on a Livret A… On the other hand, the comparison does not hold for the whole of 2024.
Who will manage to beat Livret A in 2023? The first insurer to announce a return net of management fees of 3.60%, or more, before social security contributions…and counting for the whole of 2023!
2023 life insurance rates, from best to worst
(1) The remuneration of the fund in euros may also be subject to income tax, if you withdraw your savings from a contract of less than 8 years. Or if you exceed the annual allowance. See: taxation of life insurance withdrawals.