Livret A: Tax-free and risk-free 1.5 p.c curiosity | EUROtoday

When it involves threat aversion when investing, the French should not far behind the Germans. The willingness to spend money on actual property is considerably greater. It isn’t unusual for French folks to purchase their first condo when they’re nonetheless college students – financed by means of actual property loans with phrases of often 20 years or extra.

According to figures from the French Banking Association, greater than 60 p.c of personal households’ property are in actual property, whereas in Germany and the European common it’s considerably much less.

But skepticism about shares can also be sturdy in France. In addition to life insurance coverage, financial savings accounts are the strategy of selection, particularly Livret A. It is by far the most well-liked funding. In 1818 by King Louis XVIII. launched to cowl the prices of the Napoleonic wars, in response to the newest figures there are a minimum of 439.7 billion euros on the now 57 million Livrets A.

Together with the associated financial savings merchandise Livret de Développement Durable et Solidaire (LDDS), Plan d’Épargne Logement (PEL) and Livret d’Épargne Populaire (LEP), the funding sum even quantities to greater than 900 billion euros. The financial savings are collected centrally by the state funding firm Caisse des Dépôts et consignations and circulation primarily into social housing.

The reputation of the Livret A has continued to develop in recent times. The causes: Not solely are you able to simply deposit as much as 22,950 euros on it and withdraw it at any time, however the capital positive factors are additionally fully exempt from taxes. This additionally applies to the social safety contributions in any other case due in France on capital positive factors. Thanks to the state assure, there isn’t any threat of capital loss – except the French state goes bankrupt.

In addition to the Livret A, as much as 12,000 euros may be deposited within the LDDS, the cash from which flows into sustainable tasks. In whole, every non-public particular person can make investments nearly 35,000 euros tax-free and risk-free. And anybody on a low earnings pays a further as much as 10,000 euros into the LEP; The PEL, nevertheless, is designed considerably otherwise as a financial savings product for constructing and buying actual property.

Another huge benefit: the rates of interest of the Livret A, LDDS and LEP are set by the federal government twice a 12 months and are universally legitimate after the French central financial institution makes a suggestion primarily based on the inflation price. Most of the time the federal government follows this. Until 2009, the provide was reserved for financial savings banks and Banque Postale.

Since then, you may open the Livret A at virtually any French financial institution. The setting of rates of interest is intently adopted by the French public. It has additionally more and more grow to be a political difficulty in recent times as a result of the federal government desires to convey the LEP extra broadly to the folks.

On Thursday, French Finance and Economy Minister Roland Lescure introduced that the rate of interest for the Livret A will fall from the present 1.7 to 1.5 p.c on February 1st. This additionally applies to the LDDS. For the LEP, the rate of interest drops from 2.7 to 2.5 p.c.

Compared to January 2025, when the Livret A and LDDS nonetheless had a formidable three p.c rate of interest, the present return now appears modest. But the inflation price in France is considerably decrease.

On Thursday, the nationwide statistics workplace Insee reported a decline to 0.9 p.c in 2025 as an entire primarily based on closing knowledge – after it was two p.c in 2024. Energy costs have fallen notably considerably. According to Insee, the inflation price was solely 0.8 p.c in December. In comparability, the curiosity on widespread financial savings accounts stays comparatively good.

Opening financial savings accounts isn’t linked to French citizenship and is usually additionally open to foreigners. However, in apply, opening an account with out a residence in France can show tough. Opening a number of Livrets A isn’t permitted.