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Boost your savings despite the low interest rate

with the exception of the funds of life insurance in euros, guaranteed investments now display yields tiny, less than inflation. What is pushing the French to t

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Boost your savings despite the low interest rate

with the exception of the funds of life insurance in euros, guaranteed investments now display yields tiny, less than inflation. What is pushing the French to take risks on shares and real estate in particular. What solutions savings retain in the era of low interest rates ? Elements of an answer...

paradigm Shift for investors. In continuous decline in recent years, the rates of government bonds have been pushed into the red at the end of the month of June. A situation that is expected to last, according to most economists. The first consequence for the bas de laine of the French : the books of the regulated but also the bank books display pay very low, lower than the price increase (1.1% in July 2019). And it could get worse. With inflation that do quivers still not despite the policy accommodative of the European Central Bank, yields on books savings classic (Booklet A, LEP, CEL, PEL, etc.) could be further reduced as of 1 February 2020. At this date, Bercy will apply a new formula for calculating the rate of Booklet A*, for which the rate could be brought down to its floor of 0.5%.

Diversification of investments

beyond these investments dear to the French because of their favourable tax treatment, individuals wishing to build or grow their wealth have at their disposal many levers.

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With the amount reaching up to 1 750 billion euros, the insurance fund life enthusiasts will still, especially those so-called "euro" which are invested in bonds with guaranteed capital. But with the fall in bond yields, the yields on these materials are reduced like skin of sorrow, about 1.5% today, or nearly three times less than it was ten years ago. Not to mention that some insurers such as Generali or Allianz announces measures to limit the access to it. What darken the future of the euro funds.

Practice >> Learn more about investing in REITS in partnership with Corum

In the context of life insurance, individuals can also invest money in units of account. The potential gain is higher, but the capital is not guaranteed and the volatility of performance, often at the rendezvous, in the light of uncertainties on the markets. It is, therefore, choose the(s) contract(s) on which the money is placed, depending on your goals and your aversion to risk, with the help of a counsellor. It is a good idea to multiply the life insurance contracts (at least two), segmented by level of risk. The idea is to isolate one side of the euro funds, and on the other, the share unit account. In the case of a withdrawal, money will be taken on the contract with the gains lower, so as to mitigate the tax impact of the transaction.

In a logic of dynamic management, it is recommended to perform regularly in arbitrations, when it is not provided automatically in the contract. It is to redistribute the savings within the contract to one or more other materials available, either because your situation has changed or because the context on the underlying asset (stock, bond, real estate) has evolved. Here, too, professional assistance will prove invaluable.

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In the margin of the life insurance, the followers of the speculation will opt for the management of a stock portfolio, through a PEA, or a PEA-SMES, which lets you invest in the not rated.

Bet on real estate

If the low rates generate constraints in the management of your wealth, they are also a source of opportunities. Thanks to the conditions of borrowing outstanding, it is possible to invest in real estate with a savings effort reduced. Law Pinel, deficit, land, Lug or Denormandie, Malraux law... : devices for défiscaliser and build an additional income (for retirement, in particular) are multiple. They provide, moreover, often satisfaction to the investors.

Practice >> Learn more about investing in REITS in partnership with Corum

For those who wish to take advantage of the strengths of the real estate while eliminating the management of a property on a daily basis, the real estate investment trusts (REITS) yield is an attractive solution. This investment allows you to invest indirectly in real estate in the broadest sense (housing, offices, shops, health facilities, long-term care facilities...). The asset portfolio of the REIT is managed by professionals, with a diversification which allows to minimize the risks.

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Another advantage : the entrance ticket in a REIT is generally modest, of the order of a few hundred or a few thousand euros. The unitholder receives regular income, without directly support the costs of park management of the REIT. Regarding to profitability, gross average, and it is located a little more than 4% today. A good lever of diversification for a heritage. And taxation ? The property income of the REIT are taxed at the income tax according to the regime of the microfoncier or property, real, choice, and depending on certain conditions.

Read our complete file

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* The rate of the Booklet A is now set on the basis of the average semi-annual inflation rate and interbank rates in the short term (Eonia), with a rounded to a tenth of a point to the nearest point.

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