If the best investment is the one that pays, the Livret A is the worst. Not only is its return derisory, but it is also negative in this context of high inflation. There are many better investment alternatives. But you need expert help to optimise your finances according to your investor profile.

1- A short-term investment with very low returns

The Livret A is used to keep money for urgent or unexpected expenses (a recent purchase, a car repair that breaks down). It is not, therefore, an investment designed to finance life or major projects.
It is true that this short-term investment is enhanced by a return. But that certainly doesn't make it a high-yield investment.

Even though the interest rate on Livret A passbook savings accounts has been 2% since 1 August 2022, this represents just €20 a month for a Livret A filled to its maximum (i.e. up to €22,950).
This is a far cry from the higher returns offered by property or stock market asset management.

2- Even at 2%, the derisory returns on Livret A passbook savings accounts do not compensate for rising prices

Current inflation of 5.9% over 1 year is drying up returns on this already derisory investment. As a result, despite the quadrupling of its rate to 2%, the return on Livret A savings accounts remains negative. Livret A investments are therefore being penalised in terms of real returns.

The Livret A is therefore a very liquid account and has the advantage of guaranteeing capital. However, it offers little or no return in times of inflation.

3- In times of inflation, investing in Livret A savings accounts = loss of purchasing power

As we know, the value of money falls as consumer prices rise. This leads to a loss of purchasing power. And since prices are rising by 5.9%, investing money in a Livret A at 2% means losing purchasing power. So it's an absurd investment, especially if you want your money to grow.

From this point of view, investing in the stock market or in property is a better choice. These investments are more resilient to inflation. And for profiles with long-term investment horizons, the returns can be very attractive. Admittedly, these investment options can require a degree of dexterity. However, this difficulty is easily overcome with an asset manager. An asset manager can be useful for anyone who does not feel capable of managing their own assets, or who prefers to do something other than constantly monitor their investments.

4- Forget Livret A savings accounts! Favour investments in robust equities with stable returns!

Just because stagnant inflation combined with the threat of recession is creating a climate of caution, doesn't mean that letting your money lie idle is the solution. The Livret A is clearly a poor option compared with the opportunities that exist to boost your capital. Among these opportunities, so-called safe investments can be a natural investment choice, while remaining reasonable and profitable. For example, you might prefer to invest in companies with a solid business model and strong financial results. For example, buying Coca-Cola shares is an excellent choice for dividend stocks. Even in times of inflation, Coca-Cola prices remain fairly stable. What's more, its high-yield dividend is one of the most reliable on the market.

Your objectives may be to diversify your investment portfolio or optimise your tax position... The best thing is to take advantage of expert investment advice. This will ensure that you make the best investment for your profile and investment horizon.