The French have accumulated 544 billion euros in their current accounts and they are wrong. Indeed, this placement does not bring them anything at all: if the banks use it to generate interest by placing them, individuals will not, however, receive any remuneration on their money.
Rather than letting your savings lie dormant in your current account, it is therefore better to move your capital to a secure savings account that will make it grow. This is the case for example of the Livret A (and the LDDS) which brings in 3% net per year since February 1st.
This investment, which is guaranteed by the State, is as liquid as a current account. In a few seconds, you can deposit or withdraw funds there, without any fees. Apart from the neo-banks, almost all French banks provide customers with a Livret A or an LDDS. All you have to do is deposit 10 euros to activate it.
16 billion euros to be won for banks
The 544 billion euros sleeping in a current account are a delight for depositary banks. The latter can invest these sums to profit from them without having to remunerate the true owners of the capital.
By applying the 3% net of the Livret A for example, this represents no less than 16 billion euros in interest. This is as much loss of earnings for French individuals who leave their money in their current account rather than putting it in a Livret A.
According to figures from the Banque de France, the average French household has around 18,430 euros in their current account, compared to less than 10,000 euros 15 years ago. If we relate it to the Livret A rate, it is therefore around 550 euros in interest that passes under their noses each year. With inflation reaching 6.2% in February 2023 according to INSEE, leaving money in the current account is even more of a shame.
If 7% of Livret A have reached the ceiling, a large majority of French people have not filled in this savings account. If you are one of those who leave their capital in the current account rather than filling your Livret A (and the LDDS) as much as possible, you should review your money management strategy. In a few clicks, via a traditional bank or an online bank, you will be able to start making your money work passively. With a net rate of 3%, which could even drop to 4% next August according to rumours, the Livret A is one of the most attractive investments of the moment.
How to optimize your current account?
Of course, you should not empty your current account to deposit the money in the Livret A (or another secure savings investment). That said, we must try to reduce the amount left in this account as much as possible to keep only the bare minimum for daily expenses.
In general, it is advisable to keep about a month’s salary in the current account in order to deal with unforeseen events, in addition to current consumption. In all cases, the capital of the Livret A is available at any time and the withdrawal is free. It is different for term accounts, such as the one offered by Boursorama Banque, which blocks savings over a year. That said, it allows for a higher return than a standard unregulated booklet.
