Livret A below inflation: outflows and after-tax comparisons
At 1.7% interest and 3.4% inflation over the same hypothetical year, a Livret A balance would lose about 1.64% of purchasing power.INSEE
The 1.7% rate is current; the 3.4% CPI figure measures the year to October 2026 and is provisional. INSEE This is an illustration, not a realised return or a forecast.
Withdrawals coincided with this gap; the flow data do not establish savers’ motives. Net withdrawals from the Livret A and the LDDS reached €8.53bn from January to September 2026. France’s 31.4% flat tax changes the comparison: 2.48% gross is needed to match the Livret A’s 1.7%. Compare what each option pays after tax and inflation, alongside eligibility, access and risks.
Key takeaways
The Livret A has paid less than inflation since March 2026. At 1.7% against 3.4% consumer price inflation in October (provisional), the real rate is about -1.6%.
The outflows are real but small. The €8.53bn withdrawn in nine months is about 1.4% of the €615.2bn held at the end of 2025.
Tax changes the comparison. A taxable product must pay 2.48% gross to match 1.7% tax-free, and none of the modelled 12-month examples exceeds 3.4% inflation under the stated tax assumptions.
The Livret A rate was cut three times in a year: from 3.0% to 2.4% in February 2025, to 1.7% in August 2025 and to 1.5% in February 2026. It returned to 1.7% on 1 August 2026. Over the same months, French inflation turned up, driven by energy. INSEE's provisional estimate for October 2026 is 3.4% for consumer prices and 3.8% on the harmonised index used in the chart. INSEE
Comparing today's rate with inflation over the past twelve months gives a real rate of about -1.6%. That is a snapshot, not a realised return. The picture was different before: the Livret A paid 3.0% through 2024 against 2.0% average inflation, and about 2.2% in 2025 against 0.9%. The negative real rate is a 2026 development, which began in March.
Why the formula lags
The Banque de France’s July 2026 release explains the semiannual calculation from inflation excluding tobacco and €STR. Banque de France The Banque de France calculates it on 15 January and 15 July, and new rates normally apply on 1 February and 1 August.
The July 2026 calculation used average inflation of 1.52% and an average €STR of 1.95% for January to June, according to the Banque de France. Inflation accelerated after that. The rate in force until 31 January 2027 therefore reflects spring prices, not autumn prices. The government can also depart from the formula: in February 2026 it rounded a calculated 1.4% up to 1.5%.
The next revision
The rate for 1 February 2027 had not been announced on 4 November 2026. Press projections published in October 2026 range from 2.4% to 2.6% (MoneyVox, JeChange). They are estimates, and the January calculation or the government's decision can differ.
Tax-free, a hypothetical 2.5% Livret A would be worth about 3.64% gross to someone paying the 31.4% flat tax. That matters for comparisons made today: an offer that beats the Livret A in November may not in February. It does not mean the Livret A will again beat inflation. That depends on prices over the coming months.
What the outflows show
Net flows into the Livret A and the LDDS combined were negative in seven of the first nine months of 2026, for a total of -€8.53bn according to the Caisse des Dépôts. The Livret A alone accounted for -€6.92bn. September brought the second-largest outflow of the year, after January’s -€2.27bn, at -€2.22bn, while July and August were slightly positive.
The outflows are small relative to the stock. Balances stood at €606.7bn at the end of September 2026, close to the €606.8bn of a year earlier, because interest credited each December (€12.64bn in 2025) offsets withdrawals. The flows also do not show where the money went.
Banque de France data for the first quarter of 2026 give partial clues. Regulated savings lost €10.4bn, while term deposits and ordinary savings accounts gained €4.5bn and euro-denominated life insurance and retirement savings €13.4bn. French households held only €29.3bn directly in money market funds at the end of March, against €938.8bn in regulated savings. Money market funds remain a niche choice for households.
Tax-free matters more than the headline rate
Interest on the Livret A, the LDDS and the LEP is exempt from income tax and social contributions. From 2026, interest on ordinary savings accounts and term deposits, and gains on money market funds held in a securities account, are taxed at a flat 31.4%: 12.8% income tax and 18.6% social contributions (service-public.fr). A taxable rate must therefore reach 2.48% gross to match the Livret A's 1.7%.
New clients, current account required; opening 19 October–3 December 2026; rate cap €300,000; deposit protection €100,000 per person and bank.
Most permanent rates sit below the 2.48% break-even. Some promotional rates exceed it, but usually for three to six months and under conditions such as opening a current account. Households that can opt for the progressive income-tax scale at a 0% marginal rate pay only the 18.6% social contributions, which lowers the break-even to 2.09%.
The LEP exception
For eligible households, the LEP pays 2.5% tax-free on up to €10,000, with income eligibility and a variable regulated rate. Eligibility depends on reference tax income: in 2026, up to €23,028 for one tax share in mainland France, plus €6,149 for each additional half share. The Banque de France says more than 12 million people hold one, and the formula alone would have given 2.2%.
Three ways to earn closer to the ECB rate
The ECB deposit facility rate has been 2.50% since 16 September 2026, and the €STR was 2.445% on 3 November. €STR Three types of product can pay close to that rate while keeping money accessible. Each has a different guarantee, tax treatment and risk, set out in the other articles in this series.
Savings accounts and broker cash interest. Some banks and brokers pass on most of the ECB rate; many do not. Deposits are guaranteed up to €100,000 per bank. See savings accounts and ECB rate pass-through.
Money market funds and overnight ETFs. They track the €STR less fees and can usually be sold within days, but they are not deposits and lost money in the negative-rate years. See money market funds and ETFs.
Euro-hedged US Treasury bills. US rates are higher, but the currency hedge costs roughly the rate gap. The issuer NAV examples for the year to 30 September 2026 were below compounded €STR. See hedged US Treasury bills.
None of the modelled 12-month examples exceeds the latest trailing inflation rate under the stated tax assumptions. This is a dated, non-exhaustive comparison, not a forecast. Cash can help meet near-term expenses; its real long-term return depends on rates, inflation, costs and taxes.
Long-term capital needs a separate plan that accounts for its own risks.
The same pattern in Germany
German savers have no tax-free equivalent of the Livret A. The average rate on all household overnight deposits in Germany was 0.52% in September 2026, a figure that includes current accounts paying nothing. MIR Consumer prices rose 2.8% in October (flash estimate). Destatis The sampled non-promotional offers pay about 2.5% to 2.6%, roughly 1.84% to 1.91% after the 26.375% flat tax and solidarity surcharge.
Who offers what
The Livret A, LDDS and LEP pay the same regulated rate at every bank. For taxable alternatives, a few examples checked on 4 November 2026 follow. Rates are variable and promotions are limited to new clients.
In France
BforBank: 3.50% for 12 months, then 1.50%. New clients, current account required; opening 19 October–3 December 2026; rate cap €300,000; deposit protection €100,000 per person and bank.
Distingo: 4.5% for 3 months, then 2.25%. First opening; rate cap €200,000. Apply by 30 November 2026, 16:00 Paris; complete file and first payment by 11 December, 16:00; account open on 31 March 2027. Deposit protection €100,000 per person and bank.
Ramify: 4.05% for 6 months, then 2.05%. New subscriptions through 15 December 2026; rate cap €200,000. CFCAL-Banque deposit with a shared €100,000 protection limit; no CFCAL livret promotion in the previous 12 months through any distributor.
Scalable Capital: 2.60%. Variable rate, no cap; without PRIME+, all cash may be in money market funds, with capital risk and no deposit guarantee on that portion.
Trade Republic: Advertised 3%. New clients up to €50,000; promotion duration and standard French rate not verified. Cash may include liquidity funds, with capital risk and no deposit guarantee on that portion.
Fixed-term deposits at EU banks through Raisin: up to 3.27% for 12 months, locked until maturity.
In Germany
Trade Republic: 2.50%. Variable rate, no cap; cash may include money market funds, with capital risk and no deposit guarantee on that portion.
Scalable Capital: 2.60%. Variable rate, no cap; without PRIME+, cash may be in money market funds, with capital risk and no deposit guarantee on that portion.
Instant-access accounts at EU banks through Raisin: leading offers between 2.46% and 2.60%.
Separate money you may need within a year from long-term capital.
Compare rates after tax: multiply a taxable gross rate by 0.686 before comparing it with the Livret A.
For a promotional rate, work out the 12-month average including the rate after the promotion ends.
Check LEP eligibility as one of the conditions in the comparison.
Check the guarantee: deposits are covered up to €100,000 per bank; fund units are not deposits.
Recheck the comparison after 1 February 2027, when the Livret A rate changes.
Sources and method
Rates, ceilings and tax exemption: service-public.fr pages for the Livret A, LDDS and LEP; Banque de France releases of 15 January 2026 and 15 July 2026.
Flows and balances: Caisse des Dépôts monthly release for September 2026, published 22 October 2026. Net flows exclude capitalised interest.
Inflation: INSEE provisional estimate for October 2026, published 30 October 2026. The chart uses Eurostat's harmonised index, using its 2026 annual-rate dataset and earlier ECB observations, through September 2026.
It depends on what the money is for. The Livret A pays 1.7% tax-free, can be withdrawn at any time and carries a State guarantee. A taxable account needs 2.48% gross to pay the same after France's 31.4% flat tax. In November 2026 few permanent offers reach that level, none of the modelled 12-month examples exceeds 3.4% inflation under the stated tax assumptions.
When will the Livret A rate change?
The Banque de France calculates the rate on 15 January and 15 July, and new rates normally apply on 1 February and 1 August. The rate for 1 February 2027 had not been announced on 4 November 2026. Press projections published in October 2026 range from 2.4% to 2.6%. They are estimates, and the government can depart from the formula.
Who can open a LEP?
In 2026, households in mainland France whose reference tax income is at most €23,028 for one tax share, plus €6,149 for each additional half share. The LEP pays 2.5% tax-free on up to €10,000. Banks check eligibility annually; exceeding the income ceiling for two consecutive years requires closure.
