Reinvigorated by inflation, the popular savings account finally takes off

The livret A is not the only investment to appeal to savers looking for good returns. The popular savings account (LEP), reserved for French people with modest incomes, but with now attractive remuneration (6.1% since February 1), has also seen its collection jump in recent months. The number of LEPs rose from 8.2 million to 9.6 million between November 2022 and last March, according to the Banque de France. The popular savings account "is finally taking off", welcomed the Governor of the Banque de France, François Villeroy de Galhau, this Wednesday, on the occasion of the publication of the annual report of the Prudential Supervisory Authority and resolution (ACPR). From November to the end of March, nearly 300,000 passbooks were opened each month in financial institutions. A high pace. "I invite the banks to continue this progress," said François Villeroy de Galhau.

This old investment, born in 1982, has long been neglected. It regains some of its luster with the rise in interest rates. And for good reason. It is currently the only regulated savings product to outperform inflation (5.9% in April 2023 over one year). In fact, the remuneration of this booklet is directly linked to the price increase. As a result, it has only increased in recent months (2.1% in February 2022, 4.6% in August 2022, then 6.1% now).

But that's not all. Like the livret A, it is a liquid, guaranteed, cost-free and totally tax-free investment. “The French who are eligible for it are not stupid. They see that this placement is unbeatable. This is what explains the renewed collection. It’s common sense,” argues Cyril Chartier-Kastler, founder of the specialized site Good Value For Money. The progress of this product has been constant for two years. The number of LEPs opened increased from 6.9 million at the end of December 2021 to 8.3 million at the end of December 2022, then to 9.6 million at the end of March 2023. Outstandings went from 41.2 billion in March 2022 to 55.14 billion euros in March 2023. The next collection figures are expected on June 6. "I hope this trend will continue," said François Villeroy de Galhau.

Eighteen million French people today meet the LEP income criteria (21,893 euros per year for a single person, 32,818 euros for a couple). “The potential for progress seems significant to me. It is the best product for protecting the savings of French people who are less fortunate in the face of inflation,” said the Governor of the Banque de France. Moreover, the tax administration has spared no effort in recent months to inform taxpayers of the existence of this savings product. An information campaign was launched last year, and millions of emails were sent to eligible French people to raise awareness. The last one took place last February. The conditions for opening an LEP have also been simplified since 2020. It is no longer necessary to present a tax notice when opening an account or to justify compliance with the income ceilings. This makes it even easier to adopt.