Livret A: its rate should drop drastically from August 1

The Banque de France and Economy Minister Éric Lombard are due to decide on Wednesday, July 16, on the new interest rate for the Livret A savings account, which savings experts expect to be around 1.7% from August 1, a sharp drop from the current 2.4%.

This decline, unprecedented in its scale since 2009, would be the second of the year after an initial decrease of 3% to 2.4% on February 1 .

The French have accumulated more than €600 billion in savings in Livret A and LDDS savings accounts, capped at €22,950 and €12,000 respectively. These savings accounts allow them to maintain guaranteed, available, and tax-free savings. The French are particularly fond of them.

The Livret A savings account rate is calculated every six months, mid-January and mid-July, based on the average inflation rate (excluding tobacco) and an average interbank interest rate dependent on European monetary policy, over the past six months. Both of these factors have been falling since the beginning of the year.

The 1.7% estimate was made Friday by Philippe Crevel, director of the Cercle de l'épargne (Savings Circle), and Éric Dor, director of economic studies at the IESEG School of Management. Such a rate would remain higher than June's inflation rate, measured at 1% over one year, according to the latest INSEE publication.

This drop to 1.7% would provide a breath of fresh air for social housing stakeholders, who borrow at the Livret A rate, and for banks, which will have less interest to pay to savers at the end of the year.

Eminently political, the rate of the booklet has been the subject of frequent exceptions in recent years – mainly to the disadvantage of savers.

Will the Governor of the Bank of France, François Villeroy de Galhau, and Éric Lombard, however, give a "boost" to the rate of the Livret d'épargne populaire (LEP), an investment reserved for low-income households, the rate of which is also due to be announced on Wednesday? Its calculation rule would set it at 2.2%, significantly lower than the current 3.5%.

Money invested in Livret A savings accounts and LDDS savings accounts is split between banks (40.5%) and the Caisse des Dépôts et Consignations (59.5%). Banks primarily convert it into loans for SMEs and micro-enterprises.

The Caisse des Dépôts et Consignations (CDC), the financial arm of the French government, is splitting its savings fund in two. One half is dedicated to long-term loans for social housing and urban policy. The other half is invested in debt securities (primarily government-backed) and shares of listed companies.

The CDC has been criticized this year for the opacity of its investments, including some in companies involved in oil production. In response to this criticism, it has said that its exposure to fossil fuels "remains below €5 billion."

Since the end of 2024, money from the Savings Fund has also been channeled, via banks, towards loans dedicated to the energy and ecological transition.

It could also be used to finance the revival of nuclear power in France. And "even if we finance the EPR (nuclear reactors), we will still have enough money to finance social housing or local authorities," explained the new general director of the "Caisse" , Olivier Sichel, on June 19 on franceinfo.