Savings: this improbable investment which massively seduces the French – archyde

The product on which the French have saved the most since the start of the year is neither the Livret A nor life insurance… but the current account. The amounts and explanations around this craze.

By MoneyVox,

For the second year in a row, the current account steals the show at A booklet and life insurance with a record level of fundraising. With the Covid-19 crisis and the postponement of purchases, some French people have over-saved, without however placing this money on real savings vehicles. What are the advantages and limits of the current account? How much do the French keep in their checking account?

The current account breaks a record for inflows and outstandings in 2021

The Banque de France takes stock of French savings at the end of each quarter. Thanks to the last published report, it is possible to shed light on the trends during the first 9 months of 2021. And the French penchant for the current account is particularly marked. Between January and September, it is thus 58 billion additional euros which came to inflate the pot accumulated by the French on their checking accounts. A piggy bank that was already well filled. At the end of 2019, the nest egg stood at 614 billion euros, against 757 billion at the end of the third quarter of 2021.

With such sums displayed, the current account not only breaks its own records of outstandings and collections, but also those of other investments. Even the very famous Livret A and life insurance cannot compete. During the first three quarters of the year, life insurance thus posted an inflow of 16 billion euros, down slightly compared to the Livret A and its 20 billion euros in inflows.

Why has the current account become the preferred investment of the French?

On paper, the current account is not the best medium for investing your savings. For Philippe Crevel, economist and director of the Cercle de l’Epargne, it is even a “non-investment”. Indeed, the money sleeping in a current account is not remunerated, unlike a Livret A or life insurance. Over the months, this sum is even eroded by inflation, causing the holder to lose purchasing power. But the current account has three major advantages: its great availability, like the Livret A, its security, an advantage shared by the Livret A and euro funds for life insurance, and its ease of use, no need to open an additional account and to make transfers. In addition, the return on the Livret A, and even most euro funds, is no longer sufficient to protect against rising prices.

So many arguments that explain the notoriety of the current account in times of uncertainty. However, not all French people are in the same boat. While the average amount accumulated by each saver in his checking account reached 17,200 euros this year, the gaps are widening against the backdrop of the health crisis and economic difficulties. Thus, it would only be a quarter of French people who have been able to over-save since March 2020 and the start of the pandemic, in particular thanks to the postponement or cancellation of certain purchases. Depending on the lifting of health restrictions, the economic recovery and the evolution of the job market, this money accumulated over the months, also called “Covid savings”, could be spent by 2023 according to economists of the Banque de France. In the meantime, thinking about other supports, even with low returns, can be relevant to limit the effects of inflation and make your capital grow.