MoneyVox provides a monthly savings barometer to help remind readers of risk-free savings rates. Currently, the Livret A and LDDS yield 3%, while the LEP offers an exceptional 4%. The Plan d’Épargne Logement yields 2.25%, but after tax, it drops to 1.58%. In term accounts, the average rate is 3.51% for terms of two years or less, with specific rates at 3.10% and 3.00% for six and twelve-month terms, respectively. Life insurance funds yield about 2.60% gross, with an anticipated 2.50% for 2024. Inflation stands at 1.1% monthly and is estimated at 2% annually.
Is Your Memory Failing You? Do You Struggle to Remember How Much Interest a Livret A, a Housing Savings Plan, or an Insurance Fund Yields? Each Month, We Provide a Risk-Free Savings Barometer to Refresh Your Memory.
Regarding Regulated Savings
The Livret A has remained fixed at 3% since February 2023, guaranteeing a completely tax-free return until the end of the year, specifically until February 1, 2025. Its close counterpart, the Social and Solidarity Development Booklet (LDDS), also offers a 3% yield. Meanwhile, the Popular Savings Booklet (LEP), available under income conditions and designed for low or non-taxable households, boasts an unbeatable interest rate of 4%.
The Housing Savings Plan (PEL) currently promises a gross return of 2.25% for its entire term if opened in 2024. However, be aware that it is subject to a flat tax (prélèvement forfaitaire unique) of 30%, which results in an effective rate of 1.58% after tax.
On Traditional Bank Savings Accounts
Read here the methodology for these averages.
Savings Account: A Comparison of the Most Profitable Bank Savings Offers
Regarding Interest-Bearing Accounts
If you’re willing to lock away your money for several months or even years, you might be looking for higher rates than those offered by traditional savings accounts. Interest-bearing accounts guarantee a fixed return at the time of signing for a specified term. According to the Bank of France, interest-bearing accounts with a term of two years or less currently average a return of 3.51%.
As yields are declining, the most attractive rates for opening an interest-bearing account are now below this average, which has been boosted by subscriptions over the last two years.
Here are two examples of the highest rates based on the investment term:
- 6-Month Interest-Bearing Account: 3.10% gross at BoursoBank, equivalent to 2.17% after a 30% flat tax;
- 12-Month Interest-Bearing Account: 3% at Younited and Distingo, which results in 2.10% after flat tax.
In Terms of Life Insurance
Do you have a life insurance policy? It likely consists of a “Euro fund” portion, on which the money you deposit is “capital guaranteed,” functioning essentially like a savings account with annual interest. The other portion comprises “unit-linked” investments, where your investment’s value may fluctuate based on the financial markets.
For the “risk-free” portion, the average gross yield of Euro funds in 2023 was 2.60%. For the current year, the expected average return is 2.50%.
What is the Current State of Inflation?
To assess a “risk-free” savings yield, where theoretically you should not incur capital loss, inflation serves as a crucial indicator. Why? Because if your annual return, or interest rate, falls below the consumer price index, your money gradually “loses” its “value.” Here are two key indicators from INSEE to take note of:
- Monthly Inflation: 1.1% in September (representing prices in September 2024 compared to September 2023)
- Estimated Annual Inflation: 2% in 2024 (indicating prices for the entire year of 2024 relative to those in 2023)