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THE REGULATED AND TAX-FREE ACCOUNT HAS NOT SEEN SUCH A LARGE FALL IN RATES SINCE 2009 The interest rate of the Livret A savings account will drop from 3% to 2.4% on February 1, 2025.  No

other changes to the government-regulated and tax free savings account will be made meaning the maximum deposit threshold will still be €22,950 (although interest can be accrued and added

annually for amounts above this).  The Livret d'épargne populaire (LEP) for low-income households will see its interest level drop from 4% to 3.5% at the same time. The finance ministry

adopted the new rates – long expected after inflation in France slowed following a peak during the Covid pandemic – following recommendation from the Banque de France. Interest rates are

paid out by the banks and national investment fund the Caisse des Dépôts (CDC). The drop in interest rates naturally means less payout and the extra funds will be used to invest in social

housing projects, said its former head and current Finance Minister Éric Lombard.  Around 57 million Livret A accounts exist in France – they are limited to one per person, but can be opened

in a child’s name on their behalf. They are also available to non-resident second-home owners.  They are on offer at all major French banks. Interest is paid out at the end of the year or

the beginning of the following year. Read more: French resident loses €28,000 as savings account is inexplicably shut HISTORIC DROP IN LEVEL  It is the first time since 2020 that the

interest rate on Livret A accounts has fallen.  The scale of the drop is sharp too – it is not since 2009, following the economic crash of 2008, that a drop of 0.6% in interest levels has

been implemented. Interest levels for the Livret A are usually revised twice a year by the government, and are calculated based on inflation levels.  However, the government does have the

power to adapt this timeframe and the calculation.  The 3% interest rate for the savings account has been in place since February 1, 2023, so will have remained at this level for two years

before the change.  Former Finance Minister Bruno Le Maire ‘locked in’ the 3% interest rate over this time, although based on historic inflation levels, rates should have risen to over 4%. 

Legal challenges against the minister were rejected by the French courts last year. Read more: Is French Livret A account interest taxable in UK?