December offers an excellent opportunity to find competitive term accounts with interest rates up to 3%. Despite recent rate cuts by the European Central Bank, yields remain high, averaging 3.51% for accounts under two years. While some banks have lowered rates, Distingo Bank maintains a fixed 3% rate. Term accounts provide stability with fixed interest over periods of 3 months to 5 years, making them ideal for savers looking to maximize returns on their investments.
Discover the Best Term Accounts for December
The Black Friday season brings an abundance of promotions, making it an excellent opportunity to secure exceptional savings deals. Certain financial institutions are offering term accounts with interest rates that can reach up to 3% by year-end. Let’s explore the top term accounts available this December.
Current Trends in Term Account Rates
As we approach the year’s conclusion, you still have time to seize fantastic savings opportunities. Amidst the flood of promotions in retail and online marketplaces, there are also valuable options for growing your savings. Despite the three interest rate cuts from the European Central Bank since June, the yields on term accounts remain impressively high. The Bank of France’s latest study on savings remuneration, released on October 31, reveals that term accounts with durations of 2 years or less provided an average yield of 3.51% in September, maintaining the same rate as the previous month, while the average for September 2023 was slightly lower at 3.31%.
However, it is important to note that over the past few weeks, the rates for new term accounts have seen a slight decline. Our recent research indicates that the most attractive rates now fall below this average. For instance, BoursoBank’s 6-month term account has decreased from 3.10% to 2.80%, while Younited’s 12-month account has dropped from 3% to 2.75%.
On a positive note, Distingo Bank, a subsidiary of Banque Stellantis, continues to offer a competitive term account with a fixed rate of 3%. It’s essential to keep in mind that these rates are gross yields, and unlike regulated savings options such as Livret A, the interest earned is subject to taxation.
When considering a term account with a 3% rate, the net yield after applying the 30% flat tax (PFU) is 2.10%. This figure can be compared to the net rate of 3% from the Livret A, which is expected to decrease to 2.5% on February 1st. Furthermore, depending on inflation trends, another reduction could occur on August 1st.
One significant advantage of term accounts is their fixed remuneration throughout the investment period, which typically ranges from 3 months to 5 years. This stability contrasts sharply with traditional savings accounts, which can have their rates adjusted at any time by banks. According to the Bank of France, the average yield for these savings accounts was only 0.93% in September. In comparison, “super-savings accounts” offered by online banks or specialized credit institutions had an average gross rate of 1.94% in November, excluding promotional offers.
For savers whose regulated savings accounts like Livret A and LDDS are at their limits and who do not plan to access their precautionary savings shortly, a term account that guarantees a fixed rate throughout its duration is a smart choice. However, be cautious, as early withdrawals may incur penalties.
Additionally, traditional banks are showcasing competitive rates on their term accounts. For example, the BPCE group has introduced a green savings initiative with term accounts like CATVair1 at Banque Populaire and CATVert2 at Caisse d’Epargne, offering rates between 2.80% and 3.05% gross for terms of one to five years.
Moreover, CIC provides an Evolving Account with a progressive rate that is automatically renewable for a total of five years. Initially, the rate is 1.80%, increasing to 3.80% by the end of the five-year term, resulting in an average gross annual yield of 2.80%. A similar option is available through the online bank Monabanq with its five-year term account.
In conclusion, it is essential to compare the best term accounts available and choose the one that aligns with your financial goals.