Interest rates of french livret a savings accounts set to fall this summer

LOW INFLATION LEVELS IN FRANCE EXPECTED TO CONTRIBUTE TO A REDUCTION The interest rate of France’s main tax-free, government-regulated savings account is set to fall again in August 2025. 

It will be the second interest rate drop for the Livret A this year following a decrease from 3% to 2.4% in February 2025.  Prior to this a 3% interest rate was in place for 18 months. While

the exact figure is not yet certain, predictions are that it will fall by around 0.7%, to a new level of 1.7% from August 1. Some 57 million people in France hold a Livret A account.  HOW

ARE CALCULATIONS MADE? The interest rates on the account are re-evaluated twice per year, on February 1 and August 1, although the government can exceptionally freeze a certain level in

place, as was the case between August 2023 and February 2025. The re-evaluation of rates is based on a calculation which takes into account household inflation levels in France over the

preceding six months, as well as the interest rates set by the European Central Bank. The rate of inflation fell to around 2% throughout 2024 according to French statistics body Insee. 

Lower inflation has continued into 2025, with predictions that between February and August 2025 inflation will be around 0.8%. This would lead to a reduction in the interest rate applied on

Livret A accounts.  Interest on savings in a Livret A are calculated on a twice-monthly basis (on the 1st and 16th of each month), before being paid at the end of the year.  This means that

for 2025, the 3% interest rate will be applied on account balances in January, then 2.4% from February to July 31, with any revised August rate applied until the end of 2025.  BEWARE OF

INCORRECT INFORMATION AROUND ACCOUNTS  The impending drop in interest rate is considered all but unavoidable due to the lower rate of inflation in France, however certain other information

about the accounts currently circulating is incorrect.  Several social media posts and articles claimed that the current limits to the accounts will be changed.  These allegedly include a

limit on the amount that could be transferred out of the account per week (€500), and an increase in maximum limit (plafond) on funds that could be held in the account to €23,500.  However,

these claims are unfounded, and the government responded by updating its official information page on the Livret A to confirm no changes are taking place.  The current limit to funds that

can be deposited in an individual’s Livret A is €22,950, although interest accumulated on deposits can take an account balance above this. Once this level is reached or exceeded no more

funds can be deposited unless to replace any amounts withdrawn take the balance below the current limit. Funds can be withdrawn or moved to a current account associated with the Livret A at

any point, without a limit on transactions or amount that can be moved.  A minimum of €10 must be kept in the account for it to remain open.