Livret A struggling in March

The Livret A savings account continues its sluggish start to the year, weighed down by the drop in its rate announced in mid-January, marking the worst March in nine years, according to data published Wednesday, April 23, by the Caisse des Dépôts (CDC).

Deposits exceeded withdrawals by only €400 million on the French people's favorite regulated savings product last month, a low level not seen since 2016.

As in January, this "net collection" is lower than that of the Sustainable and Solidarity Development Booklet (LDDS), which has a lower ceiling, and was recorded at 610 million euros in March.

The total of the two products collected by the banks last month, 1,02 billion euros, is also the lowest in nine years, as is the total collection of the two passbooks over the quarter (3,53 billion euros, also almost three times less than the 9,08 billion euros of the first quarter of 2024).

Livret A and LDDS savings accounts are being weighed down by the drop in the interest rate announced in mid-January and effective since February 1, from 3% to 2,4%, and are suffering from competition from another savings product also with guaranteed capital: life insurance euro funds.

A further reduction in the Livret A interest rate, to around 1,7%, is "likely on August 1st," warned Philippe Crevel, president of the Cercle de l'épargne, in a note.

The two components of the calculation of the formula for this rate, also valid for the LDDS, inflation and an interbank interest rate dependent on the European Central Bank (ECB), have both been falling in recent months.

However, outstanding amounts in Livret A and LDDS savings accounts reached record levels as of March 31: 444,2 billion euros for the former and 162,4 billion euros for the latter, or 606,6 billion euros in total.

The popular savings account (LEP), reserved for modest savers, also had a difficult month of March.

In January, it posted low net inflows of 140 million euros, for a total outstanding amount of 82,8 billion euros.

The BPCE group, which includes the Banques Populaires and Caisses d'Epargne, also began marketing a competing savings product this month, the Plan d'Epargne Avenir Climat (Peac).

This is a first in France for this plan intended to direct the savings of those under 21 towards financing the ecological transition.