Livret A rate improves again

THE INTEREST rate on France's most popular tax-free savings account, the Livret A, is set to rise to 2.25% next month, to account for growing inflation.

The rise, from the current 2%, has been confirmed today by the Banque de France and comes into force on August 1.

The rate paid on the account has steadily improved in the past 12 months, from a low of 1.25% last summer - the worst rate in the account's 193-year history.

There are 60 million active Livret A accounts in France. The savings scheme has existed since 1818 and allows people to save up to €15,300, with interest paid tax-free.

It used to be offered only by the Caisse d’Epargne and Banque Postale but was opened up to other banks in 2010.

The interest rate is set nationally and revised twice a year to take into account retail price inflation.