Struggling to keep track of your risk-free savings yields? This update provides crucial insights for April, including changes to Livret A, housing savings plans, and bank savings accounts. The Livret A now offers a yield of 2.4%, while the popular savings account (LEP) has decreased to 3.5%. Life insurance yields average 2.6%, and inflation monitoring is essential to assess the real value of these savings. Stay informed to make the most of your investments.
Is Your Memory Failing You? Understanding Your Risk-Free Savings Options
Are you struggling to recall the yields of your Livret A, housing savings plan, or euro fund from life insurance? Fear not! We bring you a monthly update on risk-free savings to help clarify these important figures. Here’s what you need to know for April, especially after the recent changes in Livret A rates.
The Current Landscape of Regulated Savings
As of February 1st, the Livret A now offers a yield of 2.4%, marking a departure from the extended period of stability at 3%. This yield remains entirely tax-exempt.
Importantly, the Livret A influences the broader landscape of regulated savings. Consequently, the closely related social and solidarity development savings account (LDDS) has also adjusted to a yield of 2.4%.
The popular savings account (LEP), which is available based on income criteria, has seen a decrease to 3.5% as of February. This rate is still exceptionally favorable for qualifying households, as it is entirely tax-free. The formula for calculating this rate could have allowed the government to reduce it to 2.9%, making the current 3.5% an exceptional benefit!
Meanwhile, the housing savings plan (PEL) experienced a change on January 1st for new plans opened in 2025, now guaranteeing a gross yield of 1.75% throughout its life. This yield is subject to a “flat tax” of 30%, resulting in a post-tax yield of 1.23%. It’s worth noting that this decrease affects only new plans; if you opened a PEL in 2024, it still yields 2.25% gross, and for those opened in the early 2010s, the gross yield stands at 2.50%.
The Performance of Traditional Bank Savings Accounts
For insights into the most lucrative bank savings offers, be sure to check out the comparisons available.
When considering whether to invest your money in a term account, you can secure a fixed rate for a specified period. According to the Bank of France, term accounts with a duration of two years or less currently offer an average yield of 3.08%.
With declining rates, the offerings for new term accounts are now generally below this average, influenced by the subscriptions from the previous two years. For example, Distingo currently provides a rate of 2.50% over 12 months, which equates to 1.75% after the flat tax. To achieve a higher rate, you would need to commit for a longer period, with some providers like Swaive offering rates of 3% for a 5-year term.
The Current State of Life Insurance
If you hold a life insurance contract, it likely consists of a “euro fund” component, where your contributions are “capital guaranteed,” similar to a savings account with annual interest. There is also a “unit-linked” component that can fluctuate based on market performance.
The announcement season for 2024 yields has concluded, revealing an average yield of 2.6% according to the Prudential Control and Resolution Authority (ACPR), which remains relatively stable compared to the prior year, despite some anticipated decline.
Additionally, several insurers have reported rates exceeding the 3% mark, including Ampli Mutuelle, Garance, MACSF, France Mutualiste, and Maif.
Understanding Inflation’s Impact
To assess the value of “risk-free” savings yields—essentially investments where capital loss is not a concern—monitoring inflation is crucial. Why? If your annual yield falls behind the consumer price index, your money gradually loses purchasing power. Here are two key indicators from Insee to keep in mind:
- Monthly inflation stood at 0.8% in March (comparing February 2025 prices to February 2024).
- Annual inflation reached 2% in 2024 (comparing prices for the entire year 2024 to those of 2023). This annual figure of 2% is essential in determining whether your interest for 2024 has kept pace with rising prices. Only a net yield exceeding 2% has maintained your purchasing power in 2024. Insee has yet to release a forecast for inflation in 2025 but is expected to be below 2%.