Have banks’ euro funds bottomed out?

It decreases, again and again: the communication of the large banking networks about the profitability of the funds in euros of their life insurance It sounded like a chorus in years past. If, in general, the trend continues, the banks now seem to be reluctant to lower salary further of these funds appreciated by savers for their capital guarantee.

On average, the market served 1.3%, according to France Assureurs. At the bottom of the pack in terms of performance, La Banque Postale certainly made a further drop in 2021. Its consumer contract, Vivaccio, fell from 0.70% in 2020 to 0.65% last year. These rates are net of fees, but support 17.2% of social security contributions, so the return net of deductions will be only 0.54%. And that is not the worst rate on the campus: the Solésio Vie contract only reported 0.50%.

Also read: Life insurance: socially responsible investment is on the rise

Another player in decline: the Caisse d’Epargne. Its Millevie Essentielle life insurance registered a rate of 0.75% compared to 0.80% in 2020. For the others, on the other hand, the trend is rather towards stabilization, or even towards an increase in the rates paid thanks to bonuses – rate increases for savers who meet certain criteria.

Some players have also boosted their bonus policy in 2021, such as Société Générale. Until now, this bank offered a higher return on contracts of 76,200 euros. From now on, this bonus is doubled with another, linked to the participation of the account units subscribed in the contract: the basic return can be increased by 50% if the proportion of these risk investment vehicles exceeds 50%. As a result, the 2021 red and black bank returns make all the difference. From 0.75% to 1.84%, for example, in the Sequoia contract.

damaged old products

Also at Crédit Agricole, rates now vary according to policyholders’ inclination for risk. Below 25% units of account, the return of the fund in euros is limited to 0.65%, but rises to 1.05% with 30% to 50% risk supports. And it reaches 1.45% if the client owns more than 50% of the units of account. Same observation for LCL products. The LCL Vie contract has a base rate of 0.65% (for management fees of 1%) that can rise to 1.45% for policyholders with 50% or more units of account.

One player has opted for a slightly different strategy: BNP Paribas. If the bank also offers a bonus to its customers favoring units of account, you want to report average returns without including bonuses. It fits, he says, in a logic “convergence of the rates served regardless of the products and distribution channels” and specifies that 90% of its contracts have a net rate of 1.10%. As a result, BNP Paribas contracts are among the best non-bonus rates in the banking world.

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