Livret A: the French continued to empty their accounts in February

The total amount that the French leave in the Livret A continues to fall. They thus withdrew 740 million euros more than they deposited in February, according to figures published this Tuesday by the Caisse des Dépôts, the organization which manages the majority of sums deposited in savings accounts.

Since the fall and the drop in interest rates on Livrets, the French have been slightly emptying their Livret A, month after month, except in December, in favor of life insurance, which is a little more profitable. This movement is “contrary to the usual trend (…) of the month of February which is generally collecting”, that is to say with more deposits than withdrawals, analyzes Stéphane Magnan, of the Caisse des Dépôts.

In February, savers had 447 billion euros in their Livret A, the remuneration rate for which was further lowered from 1.7% to 1.5% on February 1. They held 165.2 billion euros, as much as in January, on the LDDS (Sustainable and Solidarity Development Booklet), the conditions of which are very similar to the Booklet A.

Inflation could push rates up

As for the Popular Savings Booklet (LEP), reserved for households below a certain income threshold, savers deposited 180 million euros more than they withdrew, due to a more attractive rate of remuneration, which however was also reduced from 2.7% to 2.5% on February 1.

The European Central Bank (ECB) sounded the alarm in March about the growing risk of inflation due to the energy shock caused by the war in the Middle East. This increase in inflation could harm household consumption in favor of savings. It could also, in turn, increase again the rates of return on the booklets linked to it. “If we look at the history of Livret A, it has always been a safe haven in periods of crisis” comments Stéphane Magnan.

The Presidency of the Republic announced at the beginning of March that the savings fund of the Caisse des Dépôts into which the majority of the sums of the savings accounts are transferred will finance up to 60% of the construction of six new EPR2 nuclear reactors, the cost of which is estimated at 72.8 billion euros. This will be done without threatening the financing of social housing, the usual direction of Livret A funds, assured the government and donors.