Livret A, LDDS: in August, the French again saved massively

Month after month, the French's ant tendency does not weaken. While inflation continues to weigh on household budgets, the government's latest announcements on the livret A seem to have pushed those who can to put it aside, reveal the latest figures from the Caisse des Dépôts.

Published this Thursday, they highlight that in August, the French's favorite savings product once again recorded a massive collection. Last month, 2.3 billion euros were deposited into the A booklet, and 700 million euros into the sustainable and solidarity development booklet (LDDS). This is the fourth best collection in August for this first savings product, behind the 2022 vintages - 4.5 billion euros - and 2011 - 2.9 billion euros, according to figures from the Caisse des deposits. Last year, as a reminder, collection was particularly favored by the increase in the Livret A rate, which then reached 2%.

At the end of August, the outstanding amount of Livret A reached 405 billion euros, while that of the LDDS was close to 145 billion euros. Over the first eight months of the year, the cumulative net collection of Livret A and LDDS reached 40.69 billion euros, compared to less than 28 billion euros over the same period a year earlier. At the current rate, unless there is a massive outflow in the last four months of the year, 2023 is therefore likely to be among the best net collections since 2009, or even reach second place, behind 49.16 billion euros of 2012.

Also read With a rate set at 3% until 2025, is the Livret A still a good investment?

This remarkable trend is caused in particular by inflation, which pushes those who can to build up a nest egg in anticipation of better days. The tripling of the rate of return between February 2022 and February 2023 also played a role. Net collection has not been negative since October 2022.

Likewise, recent executive announcements may explain, at least in part, the powerful August collection. In mid-July, Bruno Le Maire announced that the rate of return would be maintained at 3%, although it could, theoretically, have increased to 4.1% last month. “The higher the Livret A rate, the more expensive the loans are. I do not want to jeopardize the construction of tens of thousands of homes or the development of thousands of small businesses,” explained the Minister of the Economy and Finance. In return, the rate will remain fixed at this level until February 2025, even if inflation falls.

Households therefore know that this already popular product will maintain a fixed income, certainly lower than inflation, for several months. In addition, it still benefits from its well-known qualities, including guaranteed investments, without taxation, and without risk of loss of capital. So many elements that can encourage you to fill your booklet as quickly as possible.

Last month's figures are also part of a long-term trend, the pandemic having reinforced the “ant” side of the French. In its latest macroeconomic projections, published this month, the Banque de France even noted a “surprisingly high savings rate in the second quarter of 2023”, which can in particular be explained by “precautionary savings” in the face of 'uncertainty. “An equally possible hypothesis would be the sensitivity of households to the so-called real cash balance effect, which would push them to maintain a high flow of savings to compensate for the erosion by inflation of their existing savings stock,” added the experts. In the longer term, the savings rate would remain fixed at “16.6%” at the end of 2025, a high level, “much higher” than in the pre-Covid era.

Same observation on the INSEE side. In their latest economic report published at the beginning of September, national statisticians noted a “propensity to save which remains high” among our fellow citizens. “The household savings rate rose to 18.8% in the spring, almost 4 points above its 2019 level,” they added. The outstanding amount of Livret A is therefore not about to decrease.