French Savers Return to the Livret A Account
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The Livret A, a widely used French savings account, has seen a return of interest from savers. In July, the account received 80 million euros more in deposits than before. This came after months during which many people had stopped adding money to it.
The main reason for this change is an expected rise in the account's interest rate. The rate is set to increase to 1.7%. Savers appear to have anticipated this rise and decided to deposit money before the increase took effect, which is a common pattern with this type of account.
France has another similar savings product called the LDDS, which also offers a government-set rate. According to reports, the recent change in the rate did not have the same effect on the LDDS. Deposits into that account were not significantly affected by the rate increase.
Both the Livret A and the LDDS are considered safe and simple ways for French people to save money, since they are backed by the state and offer tax-free interest. Millions of people in France hold at least one of these accounts, making changes in their popularity a notable sign of how ordinary savers react to shifts in interest rates.
Vocabulary10 words
- Livret A
- a well-known French savings account used by many people
- deposits
- amounts of money added into a bank account
- interest rate
- the percentage a bank pays you for keeping money there
- LDDS
- another French savings account, similar to the Livret A
- anticipated
- expected something to happen before it does
- tax-free
- not needing to pay tax on it
- state
- the government of a country
- savers
- people who keep money in a bank instead of spending it
- significant
- big enough to notice or matter
- pattern
- a way something usually happens, seen again and again
Quiz
Answer key
1. They rose by 80 million euros 2. Because the interest rate was going to rise 3. No, it did not significantly affect deposits
Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
The Livret A, a widely used French savings account, has seen a return of _____ from savers. In July, the account received 80 million euros more in deposits than before. This came after months during which many people had stopped _____ money to it.
The main reason for this change is an expected rise in the account's interest rate. The rate is set to increase to _____%. Savers appear to have _____ this rise and decided to deposit money before the increase took effect, which is a common _____ with this type of account.
France has another similar savings product called the LDDS, which also offers a government-set rate. According to reports, the recent change in the rate did not have the same effect on the LDDS. Deposits into that account were not _____ affected by the rate increase.
Both the Livret A and the LDDS are considered safe and simple ways for French people to save money, since they are backed by the _____ and offer tax-free interest. Millions of people in France hold at least one of these accounts, making changes in their popularity a notable sign of how ordinary savers react to shifts in interest _____.
Discussion questions
- Why do you think people wait for a rate rise before saving more money?
- Do you have a savings account? What features are important to you when choosing one?
- Why might a government-backed savings account be attractive to ordinary people?
- Can you think of similar savings products in your own country?