The Livret A remains the preferred savings account of the French – and rightly so, because it is regulated and not taxed. Perfect for storing your precautionary savings. But few savers know exactly how its interest is calculated. Unlike an interest-bearing current account at certain neobanks, money placed in a bank book does not earn money the day after payment: the Caisse des Dépôts applies a fortnightly system.
“The interest on Livret A is calculated every fortnight, i.e. twice a month and 24 times a year »explains Maxime Roussigné, financial investment advisor and moderator of the Reddit forum r/vosfinances. The calculation of the return on a validated fortnight follows a simple formula: the amount placed, multiplied by the annual rate, divided by 24. For example, 10,000 euros placed from July 1 to 15 at the current rate of 1.5% produced 6.25 euros of interest.
The wrong day of the month can cost interest
The exact date of payment changes everything. “A payment made between the 1st and 15th of the month begins to produce interest on the 16th”specifies Maxime Roussigné. “If it is carried out between the 16th and the end of the month, it does not produce interest only from the 1st of the following month. » Concretely, paying 1,000 euros on July 14 allows you to start receiving interest from July 16. Paying the same amount on July 17, on the other hand, amounts to losing two weeks of remuneration: interest will not start until August 1.
And the same principle applies to withdrawals, but in the other direction: a withdrawal made just after the 15th or just after the 30th allows you to retain the interest for the fortnight that has just ended. But be careful, if the money begin to produce interest on the 16th, it must remain there for the entire fortnight for the interest to be validated!
Going back and forth on Livret A is useless
Some savers think they can play with their cash flow by placing and then quickly withdrawing their money from the Livret A on these dates. But this reasoning does not work, warns Maxime Roussigné. “A sum paid on the 2nd, then withdrawn on the 26th does not earn any interest »he explains. “It theoretically begins to produce interest on the 16th, but the withdrawal on the 26th is counted as if it had been made on the 15th. No full fortnight is therefore remunerated. » In other words, whatever the actual duration of the deposit, only the fully validated fortnight counts for the calculation of interest. “There is therefore no point in going back and forth over a month in a bank book”.
Thus, this fortnightly operation is not “not necessarily to the advantage of savers who move back and forth with their cash a lot”he notes. For this situation, there are alternatives: “ monetary funds, accessible via a securities account or via a specialized platform, allow remuneration proportional to the days on which the money is deposited. » There are also interest-bearing current accounts from certain neobanks, such as Trade Republic, Revolut, N26 or even Sumeria.
