Net collection of the Livret A records its worst January since 2016

The Livret A was shunned by the French in January, according to data published Sunday by the Caisse des Dépôts (CDC), while the beginning of the year is generally conducive to saving. Deposits of money exceeded withdrawals by only 350 million euros on Livret A accounts last month, a low level not seen since 2016. This "net collection" of the regulated savings product preferred by the French is even lower than that of the Livret de développement durable et solidaire (LDDS) over the period, recorded at 460 million euros, again according to the CDC. The total, 810 million euros, is the lowest in 9 years.

Livret A and LDDS are suffering from competition from another savings product that also has guaranteed capital: life insurance euro funds. In January, insurers announced rather attractive interest rates for last year, for some above 3%. The Livret A rate, for its part, fell sharply, going from 3% to 2.4% on February 1, in strict application by the Minister of the Economy of his calculation formula. There is, however, a major difference: the Livret A rate is net of taxes, while the euro fund is subject to taxation of up to 30% of the interest earned depending on the age of the contract.

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Added to this increased competition is the return to normal consumption and persistent inflation, which could weigh on the French people's ability to save. The poor form in January also reflects the aftereffects of a record December, with the French probably depositing their Christmas gifts and end-of-year bonuses received at the end of 2024 more quickly than usual.

However, the outstanding amounts of Livret A and LDDS reached record levels as of January 31: 442.9 billion euros for the former and 161 billion euros for the latter, or 603.9 billion euros in total. The popular savings account (LEP), reserved for modest savers, also had a difficult start to the year. In January, it posted low net collection, at 110 million euros, for a total outstanding amount of 82.3 billion euros.