Hide summary
It's official, Livret A savers will see the rate of return drop in February 2025. This announcement, carried by Eric Lombard, the new Minister of the Economyhas already caused a lot of ink to flow.
If you have a Booklet A, you will probably want to read the following, because the situation may change, and not in a good way. Here's what you need to know about the reduction in the Livret A rate and what it means for your savings.
The Livret A, a savings product undergoing rapid change
The Livret A is a bit of a favorite of the French when it comes to savings. It is the first choice for those who want a stable investment. This is explained in particular by its guaranteed security and his non-taxable interest.
However, this image could well be shattered. The new Minister of the Economy, Eric Lombard, recently announced changes. And they risk destabilizing those who counted on this savings account to preserve their savings.
To have
Livret A or LEP: here is the one which will be the most profitable in 2025 with the drop in rates
The Livret A is used not only to save securely, but also to finance public interest projectslike social housing. This dual role has made this product an essential savings tool in France. But with this new announcement, Livret A holders will probably have to revise their expectations.
What will happen with this Booklet?
The bad news for savers comes with the announcement of the reduction in the Livret A rate. Currently, this rate is 3%, and has been since August 2023. But from February 1, 2025, it will drop to 2.5%. This means that your interests will decrease.
To illustrate the shortfall, let's take this example of Econostrum. According to the media, if you had placed €5,000 in your Livret A during the year 2025, your interest earnings would go from €150 to €127.
LDDS (Sustainable and Solidarity Development Booklet)a product similar to Livret A, will also experience the same rate revision.
Eric Lombard, during an interview on Classical Radioclarified that the rate revision was in line with economic forecasts. She also follows the evolution of financial indices. Indeed, if inflation stabilizes, the Livret A rate follows this trend.
To have
Saving on your Livret A no longer makes sense, find out the reasons
Other reasons behind this rate cut?
Behind this decision there are broader economic considerations. By lowering the Livret A rate, the government is also seeking to reduce the cost of financing public projects. In particular that of the construction of social housing.
It's a difficult arbitration between preserving the purchasing power of savers and the need to finance projects of public interest. Eric Lombard, former boss of Caisse des Dépôts, knows well the challenges of this type of decision.
But the consequences for small savers are not to be taken lightly. The Livret A has long been a preferred product for those seeking to secure their savings without taking risks.
This drop in the rate, although inevitable from an economic point of view, risks tarnishing the image of this savings product. And the reaction of the French was not long in coming. Discontent, concerns, and even a questioning of the usefulness of this tool in the face of declining profitability…
