What February interest rises for regulated savings accounts in France?

Interest rates for regulated savings accounts in France, such as the Livret A, are expected to rise from February 1. We look at the accounts that the revaluation will affect.

The change will also result in rises for the Livret de développement durable et solidaire (LDDS) and the Livret d'épargne populaire (LEP) saving accounts.

These special accounts are not subject to tax or social charges on interest nor fees.

The interest rate for Livret A accounts is predicted to rise to 3.3%, reports Le Parisien. This has not been officially confirmed but is considered highly likely. The new rate will be revealed around January 15.

It comes after a rise from 0.5% to 1% on February 1, 2022, and from 1% to 2% in August last year.

Click here to see who can qualify for one of these state regulated accounts.

The interest rate is revalued twice a year. It is calculated by taking the average rate of inflation (excluding tobacco) over the past six months, and the average interbank rate (the rate at which banks exchange money in the short-term).

Inflation reached 6.1% in the second half of 2022 while the interbank rate was 0.537% (as of December 30). As a result, this calculation equals 3.3%.

The rate could even be set a little higher.

The Banque de France can override the calculation if “exceptional circumstances” justify it, or if the result of the calculation means that “the overall purchasing power of savers” would be compromised.

The predicted effects are:

Up to almost €300 more per year on a Livret A

For a Livret A filled to the maximum of €22,950, a rate of 3.3% would generate up to €757.35 in annual interest. This is €298.35 more than today with a rate of 2%.

For €10,000, the annual interest would be €330, which is €130 more than with a rate of 2%.

For the average saving sum of €5,800, the annual interest will be €191.40, compared to €116 with a rate of 2%.

Up to €156 more per year on a LDDS

This increase in the Livret A rate will automatically lead to an increase in the rate of other regulated savings products from February 1, 2023.

Namely, the rate on the Livret de Développement Durable et Solidaire (LDDS), which is aligned with the Livret A, will also rise to the same percentage rate.

This would mean an annual return of €168.30 for an average balance of €5,100, compared with €102 with a rate of 2%. For an LDDS at the €12,000 limit, the return over 12 months will rise from €240 to €396.

Up to €115.50 more per year on a LEP

The Livret d'Epargne Populaire (LEP) aligns with the rate of return of the Livret A, plus 0.50%, or the average annual inflation rate over the last six months if it is higher (which it currently is).

This revaluation will therefore allow a saver with a full LEP (there is a €7,700 limit) to see their return rise from €354.20 to €469.70 (an annual gain of €115.50).

LEP accounts appear to be a source of untapped potential saving power in France. A total of 18.6 million French people are eligible for an LEP savings account, the Banque de France has said. However, only 6.9 million LEP accounts were open at the end of 2021, it added.

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