Livret A, LEP: what to do if your savings account reaches the ceiling?

With the capitalization of end-of-year interest, it is not uncommon for the balance of your Livret A or LEP to exceed the authorized ceiling. Should we keep this surplus in a savings account whose rate will fall or consider potentially more profitable investments?

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This is a welcome end-of-year bonus for savers. At the beginning of January, holders of regulated savings accounts (Livret A, LEP, LDDS, etc.) received their annual interest from their bank. And for some perhaps a surprise: seeing their balance reach or exceed the authorized payment limit. Nothing abnormal, rest assured. Indeed, as recalled in article R221-2 of the Monetary and Financial Code: “The capitalization of interest can bring the balance of Livret A beyond this ceiling.” In other words, if you cannot make a payment beyond the authorized ceiling (22,950 euros for a Livret A, 10,000 euros for a LEP), the interest generated can be added beyond this limit.

This situation may arise for many savers this January. Indeed, regulated savings accounts have experienced a strong influx of liquidity over the last two years. With a rate of 3% net of taxation in force since August 1, 2023 – and therefore throughout 2024 -, Livret A posted record net collection in 2023 (28.68 billion euros), to which were added 11.87 billion euros over the first 11 months of 2024. Thus, in 2023, the Banque de France observed, for example, that more than half of LEPs (55% ) exceeded the payment ceiling. Certainly, only 12.7% of Livret A holders were in the same situation, but their proportion must have increased at the end of last year.

The rate of your savings accounts will drop on February 1st

But if it is indeed possible to exceed the ceiling using your interests, is it still a good strategy? After two years of attractive remuneration on risk-free savings, the time has come to drop out: on February 1, taking into account the decline in inflation, the Livret A rate should in principle fall from 3% to 2.5 %, and that of LEP from 4% to 3%. So is it in your interest to keep this surplus in your savings accounts, or to invest it in potentially more profitable investments?

It really depends on your savings goals for 2025. Keeping this money in your savings accounts has two advantages. First, these savings remain available at any time, in the event of an emergency (repairs, work, etc.) or to finance short-term projects (vacation, large purchase, family project, etc.). But above all, the interest acquired each year itself produces interest in subsequent years. A “snowball” effect which allows interest to be generated on a larger amount each year.

Finally, it will remain difficult at the start of the year to find an equally profitable alternative to regulated passbooks without taking more risk. To benefit – as on your Livret A or LEP – from an absolute capital guarantee, you will have to turn to life insurance in euro funds. Certainly, certain contracts will show higher yields than Livret A this year (up to 4% expected for the best rates in 2024), but you will then have to agree to immobilize your savings for the longer term. Indeed, if your capital remains available at all times, you will have to wait 8 years to benefit from reduced taxation, while your interest remains completely tax-free on your savings account.