Faut-il boycotter l’assurance vie et préférer le Livret A ?

The Livret A rate rose to 2% on August 1. Obviously, it is not much in the face of inflation that now exceeds 6%… But it is still good news for savers, who might hesitate to invest their money in a fund in euros whose average return will reach 1.30% in 2021. He, yes. or not, boycott life insurance in favor of the famous rule book?

As of Monday, August 1, the rate on your Livret A has doubled to 2%, net of all taxes! A return, certainly below the rate of inflation, but that will surely make you hesitate to continue investing your money in the euro fund of your life insurance. So, funds in euros or savings account?

1 – How much do you earn?

Like all French people who invest their money in a savings product, the main factor in this choice is performance. With, on the one hand, 2% on your Livret A or other LDDS and, on average, 1.30% (in 2021) on your guaranteed capital fund of your life insurance contract, the calculation is done quickly! But, for the year 2022, the difference is not so evident.

The Livret A savings account will generate 2% interest from August 1, calculated every two weeks. However, it is useful to remember that between January 1 and February 1 the rate was 0.5% and then 1% until August 1. Which is actually an annual rate… 1.375%.

Your fund in euros generates an average of 1.3% interest throughout the year. A net management fee from which, however, you will have to withdraw 17.2% social contributions.

By depositing 10,000 euros in your savings account at an annual average rate of 1.375%, you will receive 137.50 euros in interest. By depositing this amount in the fund in euros of your life insurance, you will receive 130 euros of interest, of which you withdraw 17.2% (that is, 22.36 euros). You will only have 107.64 euros left in your pocket.

SIMULATOR. Find out the actual 2022 performance of your Livret A (spoiler: it’s mostly negative)

If the Livret A is still more interesting, the difference is not as significant as might be thought at first. The key rate in the savings market is the Livret A rate. The increase in the rate of regulated passbookswhich will continue in 2023, will boost the profitability of life insurance. It will be done little by little to arrive 1.7% or even 1.9%. It will never be as much as the Livret A, but the gap will be reduced, analyzes Cyril Blesson, a partner at the specialized firm PAIR Conseil.

Victory (nearly) for Livret A.

2 – How much money can you deposit?

As you know, Livret A is roof 22950 euros and you can only open one. Therefore, only a maximum of 22,950 euros can be placed, only the interest generated from the moment the ceiling is reached will be added.

In your life insurance contract, you can invest as much money as you want and in as many contracts as you want.

Nobanques: the cheapest offers to control your budget

The increase in the Livret A rate will boost the collection of regulated brochures, but it risks being hampered by the maximum limits, underlines Cyril Blesson.

Life insurance win.

3 – Where can risks and investments be diversified?

The euro fund very often represents only part of your life insurance investments. The latest figures from France Assureurs confirm this. While net inflows of funds in euros fell (-8.8 billion euros in the first six months of the year), unit-linked inflows stood at 20.9 billion. For comparison, Livret’s A accounts recorded net inflows of €16.5 billion during the first half of 2022.

Life insurance: will the profitability of your fund in euros finally increase with the rise in interest rates?

The French, often prodded by insurance companies, are taking on more and more risk for higher returns. Investing in life insurance allows you juggle more easily in the different units of account Y securing capital gains on the euro background. It is difficult, in these conditions, to compare a passbook and life insurance, which is more complex and allows you to take risks for a medium or long-term savings project.

Life insurance win.

4 – Where is your money more accessible?

Whether in your Livret A or in the eurofund of your life insurance contract, you have the possibility of withdrawing your money as soon as you need it. But there remains a difference. When for Livret A, you just have to make a simple transfer that will arrive in an hour to your checking account, for life insurance it’s another couple of sleeves. You will have to request your insurer who will then pay the sums within a period ranging from 2 to 10 days.

5 – Costs: which product is more expensive?

Open, add, withdraw or close your Livret A account: all these operations are free. As for life insurance, this is not the case: affiliation fees, entry or payment fees, management fees, arbitration fees, increase for pilot management, life annuity fees… If these operations are more or less expensive according to your insurer, it is now easy to have access to them in order to negotiate them. To do this, consult the summary table of costs, accessible on dealer sites from June 1.

Result… Why choose?

The rise in the rate of the Livret A and other regulated passbooks, although welcome, is not a sufficient reason to boycott life insurance and in particular the fund in euros. Especially since the fund in euros is only one support among others within a life insurance contract. Contract that has several objectives: preparation for retirement, succession, medium-term savings… While the Livret A remains a means of precautionary savings.

If both have certain advantages, it is best to combine them. And if you have the possibility to put up to 22,950 euros in a Livret A, it means that you don’t need to repatriate this money to your checking account every week… Therefore, it would be convenient to keep part of this savings accessible in your Livret A, but to continue feeding your life insurance (funds in euros or other means) in parallel.

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