France’s most popular regulated savings account to lower its interest rate

The interest rate of France’s Livret A savings account will fall by around 0.5% from February, the new finance minister confirmed this morning. 

It means the government-regulated and tax-free account will have an interest rate of around 2.5% (down from a current rate of 3%) although the exact figure will be published in the coming weeks, said minister Eric Lombard in a radio interview on France Inter.

“The Governor of the Banque de France, François Villeroy de Galhau, will make a proposal to the Ministry of Finance, most certainly for a cut,” he said. 

A change to the interest rate on a Livret A savings account - thought to be held by around 57 million people in France - is linked to the level of inflation.

In February 2023 the interest on a Livret A rose to 3% following an increase in the rate of inflation during the Covid pandemic.

Further increases to the account’s interest rate which were scheduled to follow were cancelled by then finance minister Bruno Le Maire, who locked in the 3% rate. 

Interest on the account is calculated on the 1st and 16th of each month, to reach a final amount on December 31 each year. This is then paid either on the final day of the year or the first week of the following year.

Livret A accounts are flexible, allowing for both deposits or withdrawals at any point. 

Read more: Livret A savings: Why are they so popular? How do I open an account?

Interest accumulated is tax-free and does not need to be declared, however there is a maximum deposit limit of €22,950. This sum can accrue interest which can be retained within the account, but additional sums cannot be added.

There is a limit of one Livret A account per person. Children can also have an account in their name, opened by their parents/guardians.