On August 1, 2025, the rate of Livret A, a popular savings product in France, will decrease to 1.7%. This move was made by the government and is primarily aimed at reducing returns for savers.
The Decrease of Livret A Rate: What Happened?
The drop in the Livret A rate from 2.4% to 1.7% was confirmed on July 16 by CEO of Caisse des Dépôts, Éric Lombard. This change is the result of applying the legal indexation formula that takes into account inflation and interest rates. While inflation was reported at 0.9% in the first half of 2025, the new Livret A rate effectively results in a zero real yield. It is notable that the next rate review will not occur until February 1, 2026.
The Alternative to Livret A: Livret d’Épargne Populaire
The Banque de France advocates for the Livret d’Épargne Populaire (LEP) as a more favorable alternative. With an offered rate of 2.7% until February 1, 2026, and its secure, tax-exempt characteristics, the LEP has significant advantages. Nevertheless, it has low uptake; currently, 12 million LEPs are open, whereas 19 million French citizens meet eligibility criteria despite clear benefits of this product.
Issues of Financial Accessibility and Awareness
The decrease in rates raises questions about the accessibility of financial instruments and their understanding among the populace. The Banque de France aims to enhance awareness of the LEP; however, factors such as psychological barriers and lack of banking information hinder savers' transition to more favorable savings options.
The reduction of the Livret A rate to 1.7% has significant implications for 83% of French savers. While the Livret d’Épargne Populaire offers better conditions, the integration of this information into bank and advisor recommendations is critically important.
