Do the French have a problem with cash?

By the end of 2023, the amount of idle cash in French citizens’ checking accounts had reached 568 billion euros, significantly exceeding the combined balances of Livret A savings accounts and Livret de développement durable et solidaire (LDDS) accounts during the same period.
 

The Banque de France reported that the funds available in French households' checking accounts have declined once again, according to its quarterly report on household savings and financial assets.
 

Despite this decline, the amount of money sitting idle in checking accounts—which, with a few exceptions, banks generally do not pay interest on—remains substantial. 
 

Valued at 568 billion euros at the end of last year, it exceeds the combined holdings of Livret A and LDDS accounts during the same period, which offer a net interest rate of 3%. According to preliminary data, the Central Bank notes “a resumption of the outflow from demand deposits” between October and December, with a decrease of 17.2 billion euros. So-called “demand deposits,” which are available at any time, make up standard bank accounts.
 

This outflow can be attributed primarily to two factors: household spending, driven by inflation and the year-end shopping season, as well as competition from investment products offering more attractive interest rates, such as regulated savings accounts (Livret A, LDDS, etc.) and term deposit accounts (which are locked in for a specified period with a fixed return determined in advance). These two types of investments recorded growth of 12.8 billion euros and 11.1 billion euros, respectively, in the fourth quarter of 2023.
 

According to the latest data available from the Banque de France, the financial assets of French citizens totaled 6,000 billion euros at the end of September. This colossal sum, which is difficult to grasp, is more than twice the size of the public debt and more than twice the total market capitalization of CAC 40 companies. Life insurance remains the largest investment by value, followed by unlisted shares and other equity interests (related to individual entrepreneurial activities or investments), as well as regulated savings as a whole.