With our neighbors, real time is the rule. In France, on the other hand, interest on savings accounts is calculated every 15 days and credited once, at the end of the year. A method less favorable for savers, but which no one has the will to change.
3% savings account, 5% LEP: the reward of regulated savings accounts remains particularly attractive. With price growth slowing (2.9% in February 2024), it’s even better than ever. The real yield (adjusted for inflation) of Livret A has turned (slightly) positive again for the first time since March 2021, the LEP yield is now more than 2%.
* monthly inflation excluding tobacco
In red: Livret A real yield negative compared to inflation
Green: positive real return of Livret A compared to inflation.
MoneyVox
This is of course great news for the tens of millions of French people – more than 80% of the population for Livret A alone – who rely on regulated savings to invest their precautionary savings. At 3%, Livret A earns, which has reached the ceiling of 22,950 euros 688.50 euros for one year.
However, there is a downside: we will have to wait until the end of 2024 to reap the benefits. In general, the rule for savings accounts is: their interest is calculated every 15 days, on the 1st and 16th of each month, and is paid in one lump sum at the end of the year.
This the fortnight rule, as it is generally called, is also particularism. France is one of the few countries that practice this way of calculating interest, explains economist Philippe Crevel, an outstanding expert on the subject.
Daily calculation is more advantageous for savers
Outside our borders, a different rule generally applies: there are interests calculations every day AND payment on account at the end of each month. Calculation method more favorable for savers.
Not necessarily in terms of the amount of interest received: in this method of calculation, the effects of monthly capitalization – what we call compound interest – are neutralized, as we explained to you in this article on interest calculation. daily interests.
On the other hand, it represents a daily calculation two assets. First, it allows you to receive your interest every month, and thus untildo with it as you wish: spend them, transfer them to another medium, etc. Second: enables limit loss of income generated by the fortnightly rule when you make withdrawals from your savings account.
Livret A 3% and LEP 6%: this tip to maximize your interests
Bicentennial Rule…
Where does this French specificity come from, which we could do without? Another peculiarity of the tricolor: Livret A. The fortnight rule is actually closely related to the venerable savings account that was created more than 200 years ago. The origin of this rule is ancient, undoubtedly comes from the beginnings of Livret A, confirms Philippe Crevel. For simplicity, a time when there were no computers…
Banks now have computers. They even become a little more every year, technology companies, able to instantly update their customers’ balances or transfer money from one account to another, anywhere in the world, within seconds. However, the age of real-time banking, the ancient method of calculation remains the norm.
This survival is explained first regulatory barriers. The fourteen-day rule for regulated savings accounts is contained in the Monetary and Financial Code: banks cannot deviate from it. This also applies to unregulated savings accounts, these B savings accounts are specific to each bank. Here, too, the fortnightly calculation is included in the general decision (1) concerning the conditions for the acceptance of funds by banks of… May 1969!
…in the interest of the banks
However, the regulatory issue alone does not explain the retention of the fourteen-day rule. Dozens of examples show this: law knows how to adapt to changes, especially those made possible by technological progress.
The problem is elsewhere: no one in France is publicly calling for a change in the calculation method interested in brochures. Especially not banks. The current old system is more in favor of credit institutions, and we understand that they are not rushing to the gate to evolve, notes Marc Tempelman, co-founder of the savings app Cashbee, who continues: In 2000, certain banks (HSBC France, notably with its direct savings account which disappeared in 2012, note) attempted a marketing coup by offering daily paid accounts. That didn’t go very well. It has to be said that the difference is difficult to explain and that the calculation has to be done on large amounts to really make a difference.
The subject is also not a priority for investors. Calculate daily interest? Why not… This would maximize the interest received, announces Jean-Yves Mano, president of CLCV, one of the main consumer associations in France. Pre-qualification: CLCV’s priority today is rather to adjust the formula for calculating the Livret A rate to limit its link to inflation.
Should Livret A really protect you from inflation?