Livret A: here’s how much you’ll lose with an interest rate locked in at 3%

Freezing the Livret A course, a godsend? Setting up a preferred French savings account at 3% until 31 January 2025 has an advantage: it gives savers unprecedented insight into what their investment will earn them for more than a year. However, with the level of inflation remaining high despite its gradual decline, Livret A continues to cause its holders to lose money. And this has been the case since the beginning of the return of inflation. This year, the Livret A rate has been below price growth every month, including October, according to the final results for last month provided by INSEE on Wednesday 15 November.

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Over the year, inflation excluding tobacco reached 3.9% in October after 4.8% in September and August. For the whole year 2023, the Banque de France expects inflation of 5.8%. The loss is therefore severe for the 55 million Livret A holders who see prices continue to rise faster than the return on their savings. On August 1, when the rate was held at 3%, they could have hoped for a return of 4.1% using the Bank of France’s calculation formula strictly. This takes into account, on the one hand, the average annual inflation measured over the last six months and, on the other hand, the average interbank rates (€STR rates at which banks lend) for the same period.

Livret A rate of 4.1% if revised on February 1st

As of July 1, the average annual inflation excluding tobacco is exactly 4.43%. If we stick to the forecasts of INSEE and Banque de France, inflation should be between 4.2% and 4.5% in the last two months of the year. As for the average interbank rate, it is 3.7% as of July 1.


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Result: if the Livret A rate were revised on 1 February based on the available data, a strict application of the calculation rule would give a rate rounded to 4.1%. However, as a reminder, it will still remain fixed at 3% until February 1, 2025! Compared to the interest that savers receive, the difference will not be negligible. Because with this reduced rate, a Livret A holder with an average debt amount of 5,800 euros will receive 174 euros in interest per year. This is 63.80 euros less than he would earn at a rate of 4.1% (237.80 euros). However, the biggest losers will be savers who have reached the €22,950 cap: their capital is subject to interest of €688.50 per year at a 3% yield, while they would get back €940.95 at a rate of 4.1%. Or 252.45 euros lost. I can’t wait for the thaw!


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