Livret A Rate Drops 43% to 1.7% August 1 2025

The Livret A rate will decrease to 1.7% starting from August 1, 2025, affecting 58 million French savers. This decision, based on the legal indexation formula, comes despite moderate inflation at 0.9%. The Banque de France has recommended the Livret d’Épargne Populaire (LEP) as a more advantageous alternative, highlighting its benefits such as tax exemption, security, liquidity, and a higher interest rate of 2.7% until February 1, 2026. However, the LEP remains underutilized, with only 12 million accounts open despite 19 million French people meeting the eligibility criteria. The Banque de France attributes this to psychological factors, lack of banking information, and insufficient proactivity from banks. The decrease in the Livret A rate raises concerns about the accessibility of fair and efficient savings options for the French population.

The decrease in the Livret A rate to 1.7% as of August 1, 2025, confirmed by the CEO of Caisse des Dépôts, Éric Lombard, marks a significant change for millions of savers. This reduction is based on the legal indexation formula, which combines inflation and monetary rates. The yield of Livret A has nearly halved in a few months, from 3% in January 2025 to the current rate. The Banque de France emphasizes that they are strictly applying the formula provided by law, but the consequences for savers are immediate. With inflation at 0.9% in the first half of 2025, the new Livret A rate offers an almost zero real yield. The next rate adjustment is not expected until February 1, 2026, extending the period of low remuneration. The Livret A remains capped at €22,950, but this does not compensate for its reduced yield, making it less attractive compared to other banking solutions. For modest savers who rely on Livret A as their main savings tool, the loss of income is significant.

In response to the decrease in the Livret A rate, the Banque de France has highlighted the Livret d’Épargne Populaire (LEP) as a more advantageous alternative. During a press conference, François Villeroy de Galhau, governor of the Banque de France, described the LEP as the most advantageous regulated savings product currently available. Both the LEP and Livret A are tax-exempt, secure, and liquid, but the LEP offers a higher interest rate of 2.7% until February 1, 2026. Despite clear eligibility conditions—an annual income below €22,823 for a single person or €35,012 for a couple—the LEP remains underutilized. Only 12 million LEPs are currently open, while 19 million French people meet the eligibility criteria and have the capacity to save. The Banque de France acknowledges progress in increasing the number of LEPs opened between 2021 and 2024, but warns that 7 million eligible French people have not yet opened an LEP, even though some of them already hold a Livret A. The lower deposit ceiling of the LEP, €10,000 compared to €22,950 for the Livret A, does not justify this disaffection. Instead, psychological factors, gaps in banking information, and lack of proactivity from banks are cited as reasons for the slow transition to the more favorable LEP account.

Beyond the LEP, savers looking to diversify their portfolios in a context of declining rates have other options. Cryptocurrencies, particularly bitcoin, are seen by some as a potential solution for preserving value or achieving long-term returns. However, investing in cryptocurrencies requires a thorough understanding of the mechanisms, volatility risks, preservation, and tax issues. It is not a universal alternative but a lever that can be considered with caution, provided its foundations are well studied before any commitment decision. The situation raises questions about how financial information is disseminated and the fairness of access to performing savings. The Banque de France seems willing to accelerate in this area, but the impact will remain limited as long as banks, advisors, and simulation tools do not fully integrate this solution into their recommendations to eligible households.