Wednesday, December 21, 2016

Livret A and LDD, two reforms that passed almost unnoticed for investors – The World

The LDD becomes ” solidarity “, the calculation of the rate of the Booklet Has evolved. Changes to the margin for these booklets regulated shunned in recent months.

The rate of the Booklet A should be maintained at 0.75 % until August 2017.

For the second consecutive month, investors have drawn in their Booklet A and LDD (Livret développement durable). They have removed a total of 1.55 billion euros on the single month of October, according to figures from the Caisse des dépôts. Thus bringing it back to the bare minimum – € 140 million – the net revenue recorded since the beginning of the year. If this movement continues, the two booklets, the regulated will in 2016 a third consecutive year of décollecte.

also Read : Livret A, LDD : six French banks seize the european court

It must be said that their rate of pay to 0.75 % of the net tax per year, only motivates more individuals, who tend to hoard, leaving their economies on their current account. Result : more than 400 billion euros are currently sleeping on demand deposits, a level increase of 25 billion on the first nine months of the year, says the Bank of France. And these are not the two recent reforms of the modalities of these two booklets, which should upset this gives.

New formula for the liner

on The side of the Booklet A, a modification of the method of calculating the rates has been presented by the government in early November. And the new formula is less generous than the old one. Up here, one is based on the average interbank rates (Eonia and 3-month Euribor) and the level of inflation (change over the past twelve months known). Or inflation plus 0.25 percentage points, when this calculation proved to be much more favorable.

Now, this increase of 0.25 point will only be achieved if the level of inflation does not exceed a quarter of a point the interest rates. Another novelty : inflation and Eonia, the two indices used in the new calculation of the rate of the Booklet Has (the Euribor is no longer taken into account), are smoothed over six months. For inflation for example, it is now the average semi-annual variation over the past twelve months-known account.

This smoothing half-year was officially the goal of ” to prevent any sudden change “. A change that occurs, strangely, just when inflation is expected to accelerate, if only by taking into account the evolution of prices of raw materials…

Read also : The reform of the Livret A is completed

With this new formula, the nominal rate of the Booklet A would be 0.25 %, but the government is already committed to maintain the 0.75% of until the 1st August 2017. Beyond that, it will always be, as before, the possibility of derogating from the formula for liberty to fix the rate.

The DDL wins an ” S ” in 2017

The LDD also comes to see his changed behavior. Integrated in the law Fir 2, adopted by the Parliament on 8 November, this reform will, however, still more unnoticed to investors. If the name is changing to the 1st January, 2017, for the Libretto of sustainable and inclusive development (LDDS), will not change anything, or almost, in the facts since the rate of compensation remains the same as in the Booklet and that the ceiling of payment is maintained at 12 000 euros.

The difference : banks will propose each year to the holders of the give part of the money of their LDDS to businesses or associations in the sector of social and solidarity economy. In return, they will benefit from the traditional tax reductions related to donations.

Read also : rising rates should have little impact on the investments of the French


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