Savings: between Livret A and life insurance, which should you choose?– Get a quote in 3 minutes

In 1981, Livret A earned more than 8.5% interest, but a few weeks ago it dropped to 0.5%. However, it remains the most popular savings solution for French people despite this sharp decline over the years. A drop in rates explained by the government as being “investment diversification policy”, Inviting the French to turn to other means of savings such as life insurance for example. So what should you choose? Unissur takes stock for you.

Booklet A, the favorite savings solution for the French?

Booklet A was created in 1818 under the name of “savings account”, That is more than 200 years ago. However, all these years later, it remains the most popular savings solution for French people who continue to invest in this booklet. Held by around 8 out of 10 French people, the Livret A represented more than 300 billion euros in 2019. And since the arrival of Covid-19 in France, a climate of uncertainty has set in, thus motivating the population to save more. If we look at the figures for March 2020, we can easily see this. In fact, approximately 3.8 billion euros were deposited, which is 50% more compared to the same period of the previous year. More than a savings account, the livret A is today for a majority of people a kind of second current account. With its ceiling set at € 22,950, 60% of accounts have a savings amount of less than € 1,500, and 40% do not even reach € 150.

We then wonder why, with such low rates and relatively low sums saved, the French continue to remain loyal to him? The success of A booklet can be explained in particular by its accessibility. Indeed, a deposit of 10 euros is enough to open the account. In addition, the amount of the payments, as well as their frequency, is free, and withdrawals can be made at any time. But one of the most important points is that the latter is tax exempt, so the interest obtained is not taxable! Booklet A is therefore a savings solution useful for avoiding difficult times if you put around the equivalent of twice your salary.

Life insurance: an alternative to grow your capital

When you want to put your money, there are many other solutions than putting it on a passbook A. One of these solutions is none other than taking out life insurance. And this is one of the best solutions since it allows each person to choose a tailor-made savings method thanks to the investment in euro funds or in units of account. More than 80% of life insurance corresponding to the euro fund, the other preferred means of savings for the French population. Not very profitable (1.6% on average), it nevertheless offers more security. It is still important to keep in mind that its costs remain high and that it is not exempt from tax, unlike booklet A.

In terms of life insurance in units of account, it can be a solution to consider if you want to diversify your heritage. Its main advantage? It offers a very good return if it is possible for us to project ourselves in the long term and if we are ready to face various hazards in the short term.