Livrets A and LDD

[CeeJay]

I have taken out both Livret A and LDD, does anyone know if the interest is annual or is it compounded?

[NormanH]

I have both and as neither are at the limit the interest this year was paid back into the account, so I presume it is compound with interest paid next year on that which has just been paid in.

I keep two not because I am rich, but I keep my meagre savings in one and  make monthly payments into the other in anticipation of various bills (utilities and tax), since if you touch one of these accounts the interest stops  for a period (one or two months but I am not really sure how long)

[Clair]

Norman,

I'm not sure I understand what you mean by "the interest this year was paid back into the account".

I have a Livret A and a LDD.

Until the recent change, they were both at max deposit, and the interest has always been added to the capital.

In other words, you can deposit into the account up to the ceiling, after which only the interest can be added.

For info: http://www.cbanque.com/placement/livret-epargne.php

[suein56]

[quote user="NormanH"]I keep two not because I am rich, but I keep my meagre savings in one and  make monthly payments into the other ... since if you touch one of these accounts the interest stops  for a period (one or two months but I am not really sure how long) [/quote]

That is not what I was told when I opened our accounts at LaPoste and asked if we could use them just like ordinary savings accounts ie taking out money monthly to pay bills with no loss of interest other than the default fortnight loss.

Sue

[NormanH]

So we are all saying the same thing. The interest goes back into the account and itself gains interest..i.e compound interest.

I may be wrong about how long the interest is frozen (as I said I am not really sure) but it is enough for me to prefer to have one I don't touch and the other on a lower level where the loss of interest doesn’t matter.

[Doodle]

Sue,

We were told the same as you at LBP ie think of making withdrawals on the Livret A account on the 2nd or the 16th of the month to benefit completely from the remuneration for your Savings account. Off now to check the paperwork!

Chris

[tinabee]

[quote user="CeeJay"]I have taken out both Livret A and LDD, does anyone know if the interest is annual or is it compounded?
[/quote]

The interest is paid annually, but it is calculated twice per month (par quinzaine) - if you want to know how is it calculated, there is an article here

http://www.francetransactions.com/epargne/calcul-interet-livret-quinzaine.html

For each addition or withdrawal of funds, the interest is recalculated at the subsequent 'quinzaine' (either the 1st or 15th of the month), so this is why some banks recommend you make withdrawals on the 2nd or 16th so that your interest will have been allocated before the withdrawal.