For the first time in 10 years, the French have not paid back the money taken from their tax-free savings products.
The reduction of the capital held in Livret A savings continues. For the ninth consecutive month, the holders of a Livret A drew on their savings. They performed more withdrawals than deposits in January, worth a total of €850 million, according to data released Monday, February 23 by the Bank of France.
Similar to the UK’s Post Office bank accounts (which largely ended up just being a way for British parents to teach their children the value of money) a Livret A is largely based around giving an investment to children.
Historically the Livret A has only been available through ‘La Poste’ and ‘Caisse d’Epargne’ but since 1st January 2009 has been available through all banks in France. It is a very popular savings account, with over 40 million accounts held in France.
The deposit limit is small, with a maximum of €1,500 in total and the current rate of interest is 1.00% calculated every 15 days. The rate can be changed by up to four times a year, depending on the level of inflation and monetary conditions.
In January 2014, saving held in Livret A’s totaled 1.6 billion euros, but it is obvious that the French consider the current rate of 1% to be attractive enough, even despite the fact that inflation is either zero or negative.