War in Ukraine: how to protect your savings?

The sanctions imposed on Russia in the context of the Ukraine war pose a risk to France’s economic growth and should amplify inflation in the short term. The challenge of being able to secure your savings as well as possible is therefore absolutely necessary. There are several solutions.

War in Ukraine, how to protect your savings? /iStock-bymuratdeniz

Life insurance, a solid savings vehicle

For several years now, life insurance has ranked first on the podium of the French’s favorite investments, having raised more than 1,800 million euros in 2020. It must be said that it is an advantageous savings product , because the The average profitability of fund-type contracts in euros is around 2% and that of unit-linked contracts can exceed 5% depending on the case. In any case, the level of profitability remains above that of inflation. In addition, the taxation of life insurance is attractive because it only taxes the interest and not the capital. Fund-type life insurance contracts in euros have the advantage of total security of the invested capital, so the saver does not run any risk. Unit-linked contracts, on the other hand, offer a potentially high annual return because the invested sums are placed in the financial markets. The risk of loss of capital is in fact higher than the euro fund type contracts, but the arbitrage carried out by the bank adviser makes it possible to limit this risk as much as possible. In addition, to reconcile capital security and a potentially high annual return, there is another possibility: allocate part of the invested capital to funds in euros and another to units of account. And in the event of a stock market crash, many observers recommend waiting as long as possible and not immediately selling your units of account.

Savings accounts, an always interesting solution

Between the LDDS – sustainable development and solidarity passbook -, the CSL – passbook account -, the Livret A and other LEP – popular savings passbook -, there is no shortage of solutions to protect your savings in traditional passbooks. They all have the advantages of total security of savings, great ease of operation and liquidity in all circumstances. The Livret A has the great advantage of being completely tax-free, as interest is not subject to payment of income tax or social security contributions. Other strong points: the ceiling of Livret A is high, €22,950, and the annual return has just risen, from 0.5% to 1%. With the same level of annual remuneration, the LDDS allows you to save up to a limit of €12,000. The interest is also totally exempt from taxes. It is also possible to save on the CSL – book account. The annual rate of return depends on what each bank practices, but the CSL offers the advantage of guaranteeing the capital invested and not having a limit. Finally, the LEP -popular savings account- has a return of 2.2% and a payment ceiling of €7,700, which makes it another interesting savings product. Between life insurance contracts in euros or unit-linked funds and the different passbooks, the possibilities of protecting savings remain attractive despite the possible economic turmoil ahead.

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