The current accounts of the French and non-financial companies are slowly but surely emptying in favor of more controlled investments. Since the beginning of the year and up to the end of July, households and non-financial companies have thus withdrawn nearly 160 billion euros – in cumulative flows – from their sight deposits, i.e. i.e. traditional bank accounts, according to data from the Banque de France.
In detail, between June and July, sight deposits fell by 20.2 billion euros, to stand at 1,355 billion euros. But where does this money go? For Philippe Crevel, director of Cercle de l’Epargne, “part of household demand deposits is allocated to consumption”. Another part also benefits “time deposits”. “If they have the possibility, households prefer not to let their money sleep in their current account. They are rational. The observed phenomenon is in fact a set of communicating vessels to other products,” the Banque de France explains to Le Figaro. Short-term accounts, less than two years old, thus recorded an increase of 11.8 billion euros in July, in addition to the 10.2 billion for the month of June, underlines the institution.
As for non-financial companies, “they have also – and even more reactively than households – have arbitrated sight deposits towards remunerated investments. The difference is that they do not have access to regulated savings, notes the Banque de France, they have massively transferred their cash to term accounts and collective investment bodies.
Regulated booklets are also popular with savers, like the Livret A or the Livret de développement durable et solidaire (LDDS), as the Caisse des dépôts (CDC) announced last week. The difference between deposits and withdrawals (net inflows) last month of these two flagship regulated savings products amounted to 3.13 billion euros, a record for a month of July, to reach outstanding total of 547.4 billion euros, unheard of here too. This time it was the LDDS which drove net inflows upwards, recording a record month of July (0.97 billion euros).
The People’s Savings Book (LEP) is also doing well. While it was in decline before its rate of return equaled 6%, it has seen its collection jump in recent months. The number of LEPs thus fell from 8.2 million to 9.6 million between November 2022 and last March, according to the Banque de France. The French are therefore far from “dissaving” assures Philippe Crevel and “even building up a kitty” while inflation has melted part of their savings since the war in Ukraine.