Livret A or life insurance, which of these investments will make you earn the most money this year? If you had invested 1,500 euros on January 1 on the Livret A and on a euro fund, how much interest will you receive?
The year 2022 was rich, especially concerning the Livret A rate. Whereas a year ago, its yield reached 0.5%, it is increased to 1% on February 1 then 2% on August 1. More than welcome increases in this period of high inflation (6.8% over one year in December, according to the INSEE estimate).
An average Livret A rate of less than 1.5%
With these two rate changes, the average remuneration of the Livret A thus reaches 1.375% for 2022. By estimating that your savings account is at the ceiling (therefore 22,950 euros) and that you have not made any withdrawals during the year: you will obtain 315.56 euros in interest by the end of the year, compared to 114.75 euros in 2021.
Let’s now assume that the outstanding amount of your savings account A is 1500 euros. You have not made any withdrawals or payments during the year. The amount of your interest will reach 20.62 euros, against 7.50 euros in 2021.
If you have withdrawn during 2022 from your precautionary savings then into new ones and made several round trips, the calculation will be more complex, in particular because of the rule of fortnights applied by the banks. In this case, it will be necessary wait a few more days to know the exact amount of your interest received. They will be paid to you at the end of the month or at the beginning of January by your establishment.
Booklet A: how many interests will you reach in 2022?
Note that from 1 February 2023, the Livret A rate should increase further and spend at least 3.30%.
Plus or minus 2% for life insurance
We do not yet know the average rate of return on funds in euros, the guaranteed capital support for life insurance for 2022. We will have to wait a few more weeks before all the insurers reveal their rates.
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But several experts have already given their estimates. The firm Facts & Figures estimates that the average rate for the profession could be between 1.60% and 2% in 2022. An opinion shared by Gildas Robert, director of actuarial and financial consulting at the consulting firm Optimind. According to him, if insurers dig into their reserves, this could lead to an average paid rate of between 1.80% and 2%.
First Rate 2022
Milleis Vie, the insurance subsidiary of the private bank of the same name, has already announced the remuneration of its fund in euros for 2022. It achieves a return of 2.15% net of management fees (compared to 0.95% in 2021) .
Let’s be optimistic and take for our example a return net of fund management fees in euros 2%. It will then be necessary to subtract the social contributions (17.2%) systematically applied. the net rate for the saver then increases to 1.6%.
For the comparison to be fairer, let’s start with the same outstandings as for Livret A. With a balance of 22950 eurosthe 2022 interest on the fund in euros will be 367.20 euros against 315.56 euros on the Livret A. For 1500 euros places, you will win 24 euros against 20.62 euros for the Livret A.
Again, this is indeed an average estimate for the euro funds rate. Some life insurance contracts should announce even higher remuneration.
Savings: should we now prefer the Livret A to life insurance?
Conclusion
By comparing the average rate of the Livret A (1.375%) and that, probable, of life insurance funds in euros (1.6% net of management fees and social contributions), it seems that life insurance will yield a little more in 2022. The new rise in the Livret A rate on February 1 to at least 3.3% will undoubtedly change the situation for 2023.