Will the return rate on the Popular Savings Certificate (Livret d'épargne populaire) be below 1% on August 1st?
Saying Goodbye to High Gains? The Popular Savings Book's Yield Might Take a Dive 🏦 💰
(Credit: Thibaut Lamy, Head of service (Employment, retirement, taxes, investments) at oursite.fr)
The spotlight is on the Popular Savings Book (LEP) once again, as it prepares for a potential yield plummet on August 1st. But what does the future hold for this savings favorite?
Inflation's continued decrease has set the stage for a significant drop in the LEP's yield. The rate has been dangling at 3.5% since February 1st, 2025, but it seems that better days may be behind us. As the latest INSEE statistics show, the rate of inflation, excluding tobacco, hovered around 0.8% for April, with the expectation of similar figures for the following months. If these trends continue, the average could settle at approximately 0.85% for the first six months of the year.
But fear not, LEP owners. Your savings aren't about to suffer a four-fold decrease, dropping from 3.5% to a mere 0.9%. There's a guaranteed safety net in place!
Protected by the Livret A
You can rejoice if you're one of the 12.5 million LEP holders. The law states that the LEP's interest rate cannot fall below the Livret A rate "plus a half-point." With the Livret A interest rate expected to remain above 1.70% on August 1st, the LEP's remuneration will logically stay above the 2.20% threshold (1.7% + 0.5%).
Moreover, the Governor of the Bank of France, François Villeroy de Galhau, and the Minister of the Economy and Finance, Eric Lombard, retain the authority to deviate from the LEP's interest rate calculation formula. They have already exercised this power earlier this year to maintain the purchasing power of low-income households, delaying the expected yield decrease from 4% to 2.9%. It's likely that they will choose to support the LEP again this summer.
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- LEP
- Livret A
- Inflation
- Yield
- Interest rate
- The potential decrease in inflation rates may lead to a significant drop in the yield of the Popular Savings Book (LEP) from August 1st.
- Despite the potential drop, LEP owners are protected, as the LEP's interest rate cannot fall below the Livret A rate plus a half-point.
- With the Livret A interest rate expected to remain above 1.70% on August 1st, the LEP's remuneration will logically stay above the 2.20% threshold (1.7% + 0.5%).
- The authority to deviate from the LEP's interest rate calculation formula remains with the Governor of the Bank of France and the Minister of the Economy and Finance, who may choose tosupport the LEP again this summer to maintain the purchasing power of low-income households.
