Livret A savings stuck at 1.25%

NEARLY 50 million savers in France will be stuck with 1.25% interest on their Livret A account until at least May.

The government has decided to keep the savings rate at its lowest-ever level for another three months. It can be revised four times a year - in February, May, August and November.

Finance Minister Christine Lagarde said that in the current climate, 1.25% was "reasonable".

If the inflation formula used to calculate the rate were strictly applied, it would have dropped further to 1%, but Ms Lagarde pledged last summer not to cut the rate any further.

The Livret A is the most popular savings account in France - with more than 46 million customers - but it has had its rate slashed by more than two-thirds in the past year.
Last February it fell from 4% to 2.5%, then 1.75% in May and a record low of 1.25% in August, where it remains today.

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 last year.