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As a result of the recent upturn in inflation, the Livret A rate will be raised on 1 February. Livret A, LDDS, LEP, PEL, CEL: which regulated savings rates are increasing and which remain blocked?
The booklet A and the LDDS
Bruno Le Maire announced it on January 14: on February 1, 2022, the Livret A rate will be raised from 0.50% to 1.00%. An unprecedented revaluation for 11 years. The decline began in August 2011: the Livret A rate was then 2.25%, then it gradually fell until it reached 0.50% in February 2020, remaining unchanged since.
This increase is the consequence of the recent recovery in inflation, which stood at 1.60% for the year 2021 according to INSEE. Indeed, the rate of return on Livret A is regulated: it corresponds to the half-yearly average of the inflation rate and short-term interbank rates (EONIA), rounded to the nearest tenth of a point. It cannot be lower than the floor rate of 0.50%. However, the government has the possibility of increasing the rate if it deems that circumstances require preserving the purchasing power of savers. It makes its decision following consulting the Governor of the Banque de France.
If the 55 million French holders of a Livret A will appreciate the doubling of its remuneration, the fact remains that its yield remains lower than inflation. Its real return (following deducting inflation) therefore remains negative.
The sustainable and solidarity development booklet (LDDS) also benefits from the government’s boost and will also be raised to 1.00%.
Le LEP
The rate of the LEP (popular savings account) is equal to the rate of the Livret A, increased by an increase. The LEP remuneration will also be revised upwards on February 1st and will go from 1.00% to 2.20%.
The LEP is aimed at French people whose resources are limited: its opening is subject to a ceiling of resources. It is capped at 7,700 euros.
The PEL
Unlike regulated booklets (Livret A, LDDS and LEP), the PEL rate will not be raised next February.
The rate of the PEL is fixed when it is opened and is valid for its entire lifespan. For example, PELs opened between 01/02/2015 to 31/01/2016 are remunerated at 2.00% and those opened from 01/08/2016 at 1.00%.
With regard to “new” PELs, the rate is calculated once a year and the new rate is applicable on the first day of the month following its publication, ie 1 January. Furthermore, the remuneration of the PEL is determined by a calculation formula which does not depend on inflation and it cannot be less than 1.00%. The last calculation resulted in a rate of 0.25%. The PEL rate therefore remained unchanged, at 1.00% on 1 January 2022. There will therefore be no revision of the PEL rate before the next update, scheduled for January 2023.
The CEL
The rate of the CEL (housing savings account) is equal to 2/3 of that of the Livret A, rounded to the nearest ¼ point. The CEL rate will therefore also be revised upwards on February 1, 2022 and will increase from 0.25% to 0.75%.
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