While they reached almost 544 billion euros in July 2022, demand deposits of individuals fell back to 502 billion euros a year later, in July 2023, according to the latest figures published by the Banque de France.
The end of the hoard? Figures from the Banque de France show that French households no longer leave as much money as before in their bank account. Thus, demand deposits from individuals represent 502 billion euros in July 2023, compared to 544 billion a year earlier, in July 2022.
This represents, on average, 16,737 euros on the current accounts of each of the 30 million French households, compared to less than 7,000 euros 15 years ago. In September 2022, this figure was 18,430 euros on average.
A switch to savings products, but also more difficulties
How can this drop in the dormant amount on current accounts be explained? At first glance, one might think that the French are redirecting themselves towards savings products, in particular thanks to the rise in the Livret A rate, set at 3%. “Over the first six months of the year 2023, the Livret A has experienced a historic collection of 25.84 billion euros. The previous record dated back to 2009 (21.36 billion euros)”, noted the economist Philippe Crevel, director of the Circle of Savings, to MoneyVox at the end of July.
Thus, over the first 6 months of 2023, Livret A had drained almost as much money as over the whole of 2022, which was already exceptional. To a lesser extent, the success of the Sustainable and Solidarity Development Booklet (LDDS) was also confirmed, in June (+0.83 billion) as in July (+0.97 billion). In total, the Livret A and LDDS accounts have swelled by 37.67 billion euros (+7.4%) since the start of the year, unheard of.
Livret A collection (in billions of euros)
Source of data: monthly releases from Caisse des Dépôts on the flows and outstandings of Livret A and LDD.
“French households continue to favor precautionary savings and in particular the Livret A, the LDDS and the LEP, drawing in particular on their current accounts”
“French households continue to favor precautionary savings and in particular regulated products such as the Livret A, the Livret de développement durable et solidaire (LDDS) and the Livret d’épargne populaire (LEP) by drawing on their accounts current accounts, the outstanding amount of which has been falling sharply since last September, confirms Philippe Crevel in a press release from the Cercle de l’Épargne published on August 22. These products offer a remuneration considered attractive even if it does not completely compensate for inflation (with the exception of the LEP). These products meet the expectations of French people in terms of security, liquidity and taxation. »
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If we are therefore witnessing a shift from dormant money in current accounts to savings products, in particular passbooks, more and more households may also face financial difficulties with the rise in the price of food or energy.
Overdrawn bank account: should you dip into your Livret A to get out of the red?
Why so much money in current accounts?
Important detail: this average of 16,737 euros on the current accounts of each French household is obviously inflated by certain very well stocked bank accounts… and it is an average per household, therefore by adding the balance of different accounts within a couple, even counting those of the children.