The livret A remains the most popular savings product in France. Moreover, it is a banking service distributed by all financial institutions, including online banks. Regulated, this savings account has many characteristics. And its rate is rigorously calculated by the State, in consultation with the Banque de France. Find out how the Livret A account works: opening, payment, withdrawal, rate calculation, ceiling, etc.
A booklet : the presentation
Livret A is a regulated savings account that competes with life insurance or the Housing Savings Plan. However, unlike traditional bank books, financial institutions do not freely dispose of the funds collected on the A savings accounts. A portion of this money is transferred to the Caisse des Dépôts et des Consignations within the Savings Fund. This fund finances social housing and urban renewal. And part of the remaining funds are used to finance small and medium-sized enterprises (SMEs), energy-saving work and social and solidarity economy enterprises. Each year, a report is published to justify the use of the sums collected.
Today, the livret A can be opened with any bank. But until 2008, the savings account was distributed only to Caisse d’Epargne, Banque Postale and Crédit Mutuel (under the name Livret Bleu). This monopoly situation was then deemed illegal by the European Commission.
Any individual, adult or minor, tax resident or not, can benefit from a booklet. Note that it is impossible to open two per person. To open one, all you have to do is deposit at least 10 euros (1.50 euros at La Banque Postale). And the expenses of the booklet A are free (opening, closing, payment, withdrawal).
Because it is not a current account, you do not have a check. However, it is possible to make a transfer to another account.
In terms of taxation, the livret A is advantageous since it is exempt from all taxes and social security contributions. Indeed, the interests of the savings account are exempt from income tax and social security contributions.
You have the possibility of closing a livret A by informing your bank (in branch or by simple mail). On the other hand, you cannot transfer a livret A from one bank to another from 1er January 2012. The transfer was authorized for a short period, from 1er January 2009 to December 31, 2011.
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How to open an A booklet?
First, any person, adult or minor, has the right to hold a booklet A. On the other hand, it is impossible to have several, even in different banks.
You can open a livret A at any financial institution. Indeed, since 2009, all banks offer this savings product. Note, however, that the conditions of access may differ from one establishment to another. A deposit of 10 euros is necessary in all banks to open a livret A, except at the Banque Postale where 1.50 euro is enough.
To know : each bank has the possibility of refusing the opening of a livret A to an individual, except La Banque Postale. Due to its attribution to a mission of accessibility of the passbook A, the establishment is obliged to open this savings product to anyone who requests it.
How payments work
The funds deposited in your livret A are available at any time. Moreover, you can withdraw money from your savings account from the age of 16, unless the legal representative objects.
A deposit transaction must be carried out for an amount exceeding 10 euros (or 1.50 euro at the Banque Postale).
How withdrawals work
A money withdrawal operation on a Livret A account must be carried out for a minimum amount of 10 euros (or 1.50 euros at La Banque Postale). And the livret A must never be a debtor.
To note : with a livret A, you do not have a means of payment (checkbook or bank card).
The pay rate
Until January 31, 2020 (following the decree of November 27, 2017), the interest rate for the Livret A booklet is set at 0.75%. This rate is fixed by the State. In principle, it will remain fixed at 0.75% until January 31, 2020. This blocking was decided by the State to temporarily stabilize the cost of financing social housing.
Booklet A rate: how is it calculated?
The Livret A rate is set by the Ministry of Finance, on the recommendation of the Banque de France. And its calculation is obviously not linked to chance, since it takes inflation into account. In addition, the savings account rate is revised every six months.
Since July 2017, the new rate calculation formula has smoothed the inflation rates over the last six months. This avoids any phenomenon of volatility and stabilizes the rate of the Livret A.
To know : the government has announced a reform of the formula for calculating the rate of the Livret A. This should be effective from 1er February 2020. The savings account rate will now be set as the half-yearly average of the inflation rate and short-term interbank rates. On the other hand, a floor will be introduced so that the passbook A rate can never be less than 0.50%. Finally, the rate will be rounded to the nearest tenth of a point. Currently, it is rounded to the quarter point.
What is the ceiling of the booklet A?
Since 1er January 2013, the ceiling for the payments of the livret A is 22,950 euros (compared to 15,300 euros before 2012). However, the capitalization of interest can bring the balance of the savings account beyond this amount.
There are also two exceptions to this limit. On the one hand, associations can pay up to 76,500 euros on a booklet A. And on the other hand, low-cost housing organizations (HLM) are not subject to any limit.
To know : 45% of savings accounts contain less than 150 euros and only 10% of savings accounts exceed the ceiling thanks to credit interest.
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