Bank of France Proposes Alternative Savings Solution as Livret A Rate Drops to 1.7%

The Livret A savings rate will fall to 1.7% starting August 1, 2025, impacting 58 million French account holders. This reduction follows a regulatory formula tied to inflation and monetary rates, despite current inflation standing at just 0.9%.

In response, the Banque de France is pushing for wider adoption of the Livret d'Épargne Populaire (LEP), a higher-yielding but underutilized savings product. The MOVE highlights growing tensions between secure savings vehicles and the need for competitive returns in a low-rate environment.

The rate cut decision, confirmed by Caisse des Dépôts CEO Éric Lombard, comes as French savers face diminishing returns on traditional instruments. Central bankers now face the dual challenge of maintaining financial stability while addressing public dissatisfaction with shrinking yields.