Anticipated changes to the Livret A rate in 2025 include a potential decrease from 3% to 2.5% in February, with further reductions possible in August. This could lead to significant interest losses for savers, with average earnings dropping from €212 to €179.9 for a typical balance. If the rate falls to 2% by summer, the average yield could decrease to around 2.33%, resulting in even lower returns for higher balances, despite inflation remaining positive.
Anticipated Adjustments to Livret A Rate in 2025
In the coming months, significant changes are expected for the Livret A rate, with a potential decrease of 0.5 points in February, followed by another drop on August 1st. This situation raises concerns about the interest losses for savers in 2025.
According to Eric Lombard, the Minister of Economy, the Livret A rate is likely to drop from 3% to approximately 2.5% due to a decline in inflation. This adjustment is anticipated to be confirmed shortly after the release of December’s inflation figures, which recorded a year-on-year increase of 1.3%.
Given this inflation backdrop, the proposed 2.5% rate for the Livret A on February 1st appears highly probable. Consequently, the yield on this popular savings account will also see a decline.
Projected Interest Loss Over the Year
Taking into consideration an average Livret A balance of €7,077, as reported by the Banque de France, the annual interest earned over the past year was €212, with the rate fixed at 3% during 2024.
What can savers expect in 2025? If the Livret A rate remains at 2.5% throughout the year, the total interest accrued would amount to €179.9, representing a reduction of €32.41 compared to the previous year’s earnings. The average rate for the Livret A would then be 2.54% for 2025.
For those with the maximum balance of €22,950, the interest earned would amount to €583.39, indicating a shortfall of €105.11 compared to last year.
Further Rate Declines to Consider
It is crucial to note that the losses may be even greater. The calculation of the Livret A rate is influenced by two key factors: the price fluctuations over the previous six months and a bank exchange rate known as the Ester. Economist Philippe Crevel suggests that “the Livret A rate could see another decrease on August 1st.” Such a scenario would be driven by the monetary rate component, which is affected by reductions in the European Central Bank’s key rates.
Should the Livret A rate fall to 2% this summer, the average rate for 2025 would then be approximately 2.33% for the entire year. In this case, an average balance of €7,077 would yield only €164.9, reflecting a decrease of €47.41 compared to 2024.
For those with the maximum balance of €22,950, the interest would be €534.73, which is €144.77 less than the previous year. Furthermore, individuals with balances exceeding €22,950 could experience even greater losses due to interest capitalization.
It’s important to understand how interest is calculated if your Livret A balance exceeds the ceiling.
Despite the expected rate reductions, the real yield of the Livret A is projected to remain positive, as inflation for 2025 is estimated to be around 1.6%. Therefore, the real yield should hover around one point at least until August 1st.