Raising the savings book rate to 2% paradoxically caused a reaction from all financial intermediaries who did not offer the preferred savings account of the French. At this rate, livery A should attract savers to a large extent. The downside of its negative real return due to inflation above 2% is not a necessity, since the 2% return without the slightest financial risk, accessible to all, fully guaranteed by the state, with full liquidity remains unsurpassed. .
Livret A at 2%, good for your savings
Victor Trokoudes, managing director and co-founder of Plum, reacts to the Livret A rate hike to 2%: “The increase in the passbook A rate from 1% to 2% is not a surprise in the current environment. This came as inflation reached 6.1% in July 2022 in one year, the highest level since July 1985, and the European Central Bank decided on 21 July to raise its key rates by 50 basis points for the first time since 2011. . However, despite quadrupling to 2% over the past year, the Livret A book continues to offer a negative real return of 4.1% compared to inflation. As a result, Livret A should continue to rise, with a further increase likely on February 1, 2023. However, economists expect Livret A deposits to increase this year as households have historically been prone to tax oversavings. interest rates on free savings accounts are rising. However, we know that the most difficult aspect of savings has to do with the inertia of regularly saving money, which also explains the dormant €776.5 billion in checking accounts in 2021, according to the Banque de France.“The only problem is that Plum doesn’t offer Livret A or even LEP, whose 4.6% rate will surely suit most of its users.
Drain, automatic saving
That’s why Plum makes saving automatic so its users don’t have to do anything to start and continue saving. Thanks Sliva, In total, French users managed to save about 176 euros in June 2022.an increase of 11% compared to the previous month and 32% compared to January 2022.
Force yourself to save
Plum helps savers who cannot save on their own. At regular intervals, Plum makes calculations to transfer the ideal amount to your Plum account. Gradually, the saved amount becomes more and more important. Whether you’re saving for a vacation, your first home, or just to be on the safe side, Plum will help you reach your goals faster without giving up on your habits.
Cut your expenses
In order to maintain control over your finances in an inflationary environment, it is important to keep track of your income and expenses and budget. It can be helpful to “clean up” your expenses by cutting back on basic expenses (internet, phone, electricity), opting for a cheaper contract, or simply deleting unnecessary and forgotten subscriptions that burden your bank account by a few dozen. euro per month.
This trend is already visible to French Plum users as Plum sees a 35% drop in current bills (electricity, internet, telephony) in June compared to January 2022. Users have also significantly reduced their costs, with 47% reduction in restaurant visits (to an average of 231 euros per month in June)a 42.2% reduction in clothing costs (average €43 in June) and a 25% drop in transport (€66 per month) compared to January. The same applies to spending on entertainment: they fell by 43% and reached an average of 16.49 euros in June.
Plum, no savings investment is offered?
If Plum offers to automatically invest the money saved in this way in stocks, then this is obviously only an offer. It’s unfortunate that offering an investment with the risk of financial loss on capital saved as a precautionary measure doesn’t really make sense. What Plum lacks is savings investment offerings without the risk of capital loss, like Livret A, LEP and other banking books.