from 1Verse In August, the rate of Livret A, the leading savings product for the French with more than 55 million owners, should rise to 2%. A level not reached since … February 2013. This second consecutive increase (the rate actually rose from 0.5% to 1% last February) the French will appreciate very much after years of continuous decline and in the context of inflation that punishes savings.
What is a crucial point against life insurance in the war of “the French’s preferred investment”? “The very short and liquid product pays better than the long product: it is very unusual“, notes Philippe Crevel, director of Cercle de l’Epargne. Moreover, the French weren’t wrong there and pretty much filled out their Little Red Book since the beginning of the year. Easily accessible, available at any time, and now even better paid, this product remains a must…
Choose your contract
Is it necessary to empty his life insurance to fill his book A? Not so fast. “The average rate of the fund in euros (1.3% for this year) hides the differences from one insurance company to another. It is therefore necessary to look at the rate of the fund according to its insurance company and its allocation”, defines Gilles Belloire, Director Placement Director-Direct.fr. Thus many contracts show rates above 2% for their clients.
In addition, insurers have a small war fund with Profit Sharing Provision (PPB), which has enabled them to allocate some of the profits collected during the good years to later return to savers. According to specialists, PPB now corresponds to approximately 4 to 5% of the additional return. Shock absorber that will improve 2022 return of money in euros and reduce the gap with Livret A.
More profitable in the long run
Another advantage is that life insurance allows a very advantageous tax transfer and is not capped at €22,950, unlike the cap on Livret A. Finally, this circumstance is not as homogeneous as Livret A and allows you to diversify your savings through products invested in stocks or Bonds or real estate to beat inflation. Because it even raised to 2% from 1Verse In August, the Livret A rate remains well below inflation, which is currently 5.8% according to the latest INSEE estimates.
It is clear that savers will lose purchasing power by putting their savings in Livret A. Depending on his short or medium term projects”, advises Gilles Belloire. Life insurance has not yet given up the title of “the preferred investment of the French”!