3000€ Maximum on Livret A: DeFi for Better Investments!

The Livret A, a true pillar of savings in France, has long been the preferred solution for protecting one’s money from economic uncertainties. With a total outstanding amount of nearly 400 billion euros, it continues to attract a large part of the French population. However, financial advisors are sounding the alarm: do not exceed €3000 on your Livret A! But why this recommendation? And above all, what alternatives are available to you to obtain more interesting returns? Let’s explore this crucial question for your finances together.

A pillar that falters in the face of inflation

Created in 1818, the Livret A is deeply rooted in French financial culture. Exempt from taxes and social contributions, it naturally attracts savers who are security-conscious.

However, despite its popularity, this investment has a major weakness: its interest rate of 3%, calculated on the 1st and 16th of each month, is no longer sufficient to compensate for the rampant inflation, which stood at 4.9% in 2023.

In other words, the savings placed in a Livret A lose their value in terms of purchasing power.

In concrete terms, this means that your 100 euros deposited at the beginning of the year will indeed earn you 3 euros in interest, but their real value will be lower than it was initially.

A paradox for a savings product supposed to protect your capital! This erosion of purchasing power explains why financial advisors recommend not exceeding €3000 on a Livret A, as this amount represents a sufficient security cushion in case of emergency, but no more.

Why limit your savings on the Livret A?

Why €3000 and not more? This amount generally corresponds to one month’s salary for a large part of the French population, making it a suitable amount to cope with unexpected events. Beyond this amount, experts suggest diversifying your investments to avoid suffering the decline in value caused by inflation.

The Livret A, although tax-exempt, offers a return well below other solutions available on the market. It is therefore crucial to rethink the savings strategy beyond this amount.

Products like the Livret d’épargne populaire (LEP) offer far more attractive rates, reaching 6% in 2023, for a cap of 10,000 euros. The growing success of the LEP, whose number of holders increased by 30% in 2023, shows that savers are beginning to realize this reality.

DeFi: a modern alternative to boost your returns

So, where to place your money beyond the €3000 on the Livret A? The answer might lie in decentralized finance, or DeFi, which offers far more attractive rates.

DeFi allows bypassing traditional intermediaries (banks, brokers) by using blockchain technology to offer financial services. DeFi protocols, such as lending platforms or liquidity pools, offer returns that can far exceed those of traditional savings products.

For example, by participating in liquidity pools on DeFi platforms, you can obtain returns ranging from 5% to over 20%, depending on the risk and strategy chosen. Additionally, DeFi allows greater flexibility, with the ability to withdraw your funds at any time, without the constraints of regulated savings products.

However, it is important to note that DeFi, while innovative, carries risks.

The fluctuations of crypto markets, potential security flaws, and the complexity of products require a good understanding before getting started.

For savvy investors, however, DeFi represents a unique opportunity to maximize their returns at a time when traditional solutions struggle to keep up with inflation.

In conclusion, the Livret A remains a safe savings solution but is limited in the face of current inflation. By limiting your savings to €3000 on this product, you ensure a security cushion while avoiding the erosion of your purchasing power.

For the rest of your savings, it’s time to look beyond and explore alternatives such as DeFi, which, despite its risks, can offer much more interesting returns.