Tax Free Bank Savings Rate Increases

Largely dormant for several years due to their lean interest rates, the regulated tax-free savings accounts in France have once again sprung into life with recently announced increases in the rates.

Both the Livret A and the Livret de développement durable et solidaire (LDD) savings accounts now pay 3% interest, whilst the means-tested Livret d’Epargne Populaire (LEP) pays a mouth-watering 6.1%.

Although the main rates are below inflation, currently running at 5.2% in France, they are unquestionably an indispensable product for savers.

The party is spoilt somewhat by the limits on the amounts that can be paid into these accounts, but as a couple can potentially put upwards of €80,000 into them (excluding interest) earning up to around €2,500 interest in the year, free of tax and risk, it's a no-brainer to make use of them.

Strictly speaking, using the formula in place, the main rate should have increased to 3.3%, but when the results of the equation do not suit the government, they have a tendency to change the parameters.

Market analysts forecast a further increase when the next review takes place in October, perhaps up to 4% for the Livret A and LDD.

Read more about the rules that apply to these accounts at Guide to Regulated Savings Accounts.