The current account is a banking device allowing the customer of a bank to pay for his purchases, to make his withdrawals and his daily deposits. It is therefore used to collect salaries and supply means of payment. This is why it is the most used banking product in France: 99% of French people have at least one, according to the French Banking Federation. Although very popular, the current account is also the least profitable banking product.
In July 2022, the amount of sight deposits accumulated by the French in their current accounts amounted to 544 billion euros, according to the Caisse des dépôts, reports Money Vox. A record number. By comparison, the Livret A and the Livret de Développement Durable et Solidaire (LDDS), two other popular investments, totaled 491.8 billion euros. Savings dormant in current accounts represent around 18,430 euros per household. A colossal sum knowing that the return on the current account is 0%.
The only beneficiary of these savings is the bank since the bank uses this capital to finance its activities without paying interest to the account holder. Moreover, in the context of inflation in recent months, holders of a full current account are gradually losing purchasing power. High inflation reduces the value of savings. Indeed, with the same amount of money it is no longer possible to buy as many goods as a few months earlier, savings have therefore lost value over time. So what should be done? How not to lose money and protect your savings?
In order to optimize your savings, it is necessary to transfer the money from your current account to a more profitable savings product such as, for example, a Livret A or a Livret de Développement Durable et Solidaire (LDDS). These are two savings investments regulated by the State which provide a net remuneration of 3% per year since February 1, 2023, according to Service-Public. Although lower than the level of inflation (5.8% over one year in May 2023, according to INSEE), this rate of 3% is much more advantageous than the zero rate of the current account.
In addition, these investments are risk-free, since they are guaranteed by the French State, and the savings deposited can be recovered without delay and at no cost. On the other hand, they are capped: at 22,950 euros for the Livret A and at 12,000 euros for the LDDS. However, to maximize your savings, the date of transfer of your money to a Livret A or an LDDS is important. Why do you need to empty your checking account before the end of June?
Before placing your money on a Livret A, you must be attentive to the specificity of the rule of fortnights. In France, interest on regulated savings accounts is calculated every two weeks and paid once a year (December 31). However, a fortnight begins on the 1st or 16th of the month. This means that if money is deposited between the 1st and the 15th, the interest on this sum will only be taken into account from the 16th.
So, to optimize your investment, you must deposit your money before the end of a fortnight and withdraw it after the start of another fortnight. For example, if money is deposited before June 30, interest will be calculated from July 1 and the account holder will then benefit from 15 days of additional interest. It is therefore more advantageous to empty your current account before the end of June.