The Livret A Loses Momentum: Worst January Since 2016

A Slow Start to the Year for French Savings

At the start of 2025, the French significantly reduced their deposits into the Livret A. According to data published by the Caisse des Dépôts (CDC), the net inflow of this favorite savings product reached its lowest level for a January since 2016.

Deposits barely exceeded withdrawals, with a positive balance of just €350 million. Notably, the inflow for the Sustainable and Solidarity Development Savings Account (LDDS) was even higher during the same period, reaching €460 million. Altogether, the combined net inflows of both accounts amounted to €810 million — the lowest level in nine years.

Rising Competition from Alternative Savings Products

This drop in attractiveness is partly due to competition from euro-denominated life insurance funds, which offer appealing returns, sometimes exceeding 3%. In comparison, the Livret A rate was reduced from 3% to 2.4% on February 1, 2025, following the strict application of the calculation formula by the Ministry of Economy.

However, the Livret A retains a significant advantage: its rate is tax-free, unlike euro funds, which can be taxed up to 30% depending on the contract’s duration.

A Rebound Effect After a Record-Breaking December

January’s decline can also be attributed to a rebound effect: in December 2024, the French heavily funded their accounts, likely depositing end-of-year bonuses and holiday gifts earlier than usual.

Despite the sluggish start, Livret A and LDDS balances remain at record highs: €442.9 billion for the Livret A and €161 billion for the LDDS, totaling an impressive €603.9 billion.

A Tough Start to the Year for the Popular Savings Account (LEP)

The LEP, designed for low-income households, also faced a challenging start. Its net inflow amounted to just €110 million, with a total balance of €82.3 billion as of January 31.

Between increased competition, rising consumer spending, and persistent inflation, traditional savings products now need to find new ways to win back savers. It remains to be seen what surprises 2025 will bring!