(Photo credits: Unsplash – Adeolu Eletu)
Inflation is on everyone’s lips, reminding us when we go shopping or gas, has been in the news for several months now. Very present in our daily lives, it should also lead us to review our personal finances and our investments, especially regarding our use of regulated savings accounts. Inflation should be translated into an increase in a number of regulated savings investments on August 1st. Who is affected? How high are the new proposed rates? Is this good news for savers? What attitude should be adopted? All our explanations.
Booklet A, a great classic
When we talk about regulated savings, the first savings account that comes to mind is Livret A. This large savings classic whose minimum payment is 10 euros and with a ceiling of 22,950 euros is a guaranteed capital investment that is very profitable from a tax point of view because the profits are not taxed, neither the income tax nor the social security contributions. However, the interest rate shown on the investment is relatively low. The livret A savings account interest rate is set at 1% since February 1, 2022 and will increase to 2% on August 1, 2022, announced the Minister of Economy and Finance, who followed the recommendations of the Governor of the Banque de France. France.
Also read: Addition to booklet A: should you reinvest in this investment?
The Sustainable and Solidarity Development Booklet, an additional envelope
The Sustainable and Solidarity Development Booklet, or LDDS, can complement the A booklet if it is full. It is also a guaranteed regulated savings investment that allows you to withdraw the amounts deposited in your savings account without interruption at any time. The minimum payment for an LDDS is 15 euros and its ceiling, which is lower than booklet A, is only 12,000 euros. Note that the tax benefits are the same as in booklet A, as are the fees. Therefore, the interest rate posted by the LDDS should also increase to 2% on August 1, 2022.
The Livret d’Epargne Populaire, reserved for the most modest
Livret d’Epargne Populaire, or LEP, is also a regulated savings account that is exempt from all taxes. Its minimum payment is 30 euros while the ceiling of this envelope is set at 7,500 euros. This guaranteed capital investment is accessible under income conditions depending on the number of shares in the family quotient and which varies according to the place of residence (Metropolis; Guadeloupe and Martinique; Réunion, Guyana, Mayotte). The LEP rate has been 2.2% since February 1, 2022 but, like other regulated savings accounts, an increase is planned for August 1, 2022, which will bring its new interest rate to 4.6%. In fact, the LEP rate is equal to the Livret A rate increased by 0.5 points (2.5% therefore on August 1, 2022) or the half-year average of inflation for one year if it is higher, i.e. 4.55% if we consider. the INSEE numbers. This figure is rounded to 4.6%.
Savings account: an increase that does not include inflation
In any case, livret A and LDDS like the LEP, the interest rate as it has been since February 1, 2022, like the one from which we will benefit from August 1, 2022, does not allow inflation to be covered. In fact, for many months, the consumer price index has continued to grow, reaching 5.8% in June of the year. Throughout the year, it should exceed 5%! In this context, it is clear that the revaluation of regulated savings rates is not enough to cover inflation. Therefore, these savings books, at full value, not only do not allow you to make money but even cost those who use them.
Bank books: investments as limited as possible
Therefore, it is important to reserve regulated savings accounts for the construction and storage of precautionary savings. Since these bank books have guaranteed capital and can be used at any time, they are preferred for the emergency fund used to pay all unexpected expenses (garage mechanic, vet, plumber, locksmith, etc. ) because they are still weak wages unlike the current account that is not at all.
You can also use livret A, the LDDS and the LEP if you can, to finance your short-term projects such as financing holidays, buying a car, etc.