Livret A savings rate rises to 2%

THE INTEREST rate paid on France's top tax-free savings account, the Livret A, will rise next month, the Economy Minister Christine Lagarde has confirmed.

The rate, which can be revised only once every three months, is based on an agreed formula linked to French consumer price inflation.

New official figures from Insee, published this morning, show prices rose in December by 1.8 per cent year on year.

This means the Livret A should be paying out two per cent interest, instead of 1.75 per cent at present.

Finance minister Christine Lagarde made the announcement in an interview with France Inter. It will come into effect on February 1.

About 46 million people in France have a Livret A. 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 at the start of 2009.