Current account: this bad habit could cost you dearly from 2023

modified: 2022-12-30 18:10:02

Keeping huge sums in a checking account can be very expensive during a period of inflation. We explain to you.

  Current account: this bad habit could cost you dearly from 2023

This year again, the French have stored large sums in their current account . A bad habit we must change at all costs , because in the end, it is the customer who comes out the loser.

Current account limits

Keeping your money in your current account does not bring in anything. Despite this, many French continue to accumulate large sums .

Last October, more than 528 billion euros were, in fact, placed on all current accounts. What makes on average 17,600 euros per household or 9,430 euros per individual .

If storing money in these accounts prevents risks, in this period of inflation, it's not necessarily the right thing to do .

Depositing in a current account is, in fact, more penalizing since inflation has been raging in France. Due to soaring prices, waive the 0.5% of the Livret A became synonymous with big losses.

The reason is that in one year, consumer prices soared 6.2% . Those who deposited money in a current account during this period therefore lost the equivalent of this rate .

The explanation is simple. A product basket that cost 1000 euro before inflation now costs 1062 euros. However, your 1000 euros which were in a current account did not move and remained 1000 euros. Within 12 months, you have therefore lost 62 euros of purchasing power .

Note that 24 months ago, storing money in a current account was not as penalizing. Only after the prices began to rise sharply that everything went into a spin.

The reason, according to specialists, is the current level of inflation, which is very critical. In fact, this level is a record that has only been achieved on rare occasions s in recent decades.

The alternative to the current account

If the current account is so used by the French , it is because of its main asset: its great availability. Indeed, thanks to the account, you can have your money at your fingertips. And make withdrawals without go through endless procedures .

In addition, the money deposited there is secure, and subject to a deposit guarantee of up to 100,000 euros .

However, the current account does not only have advantages. Although many praise its safety, it also has some flaws . Fraud, for example, is a very real threat to these accounts. They can, if crafted ingeniously, cause you to lose the sum you have stored .

Besides its vulnerability, the current account is also unprofitable . Why ? Because the amount kept there does not change. Which, in case of inflation, loses a lot of purchasing power .

Thus, in this time of crisis, it is preferable to turn to other solutions . In particular, towards the regulated booklets. These booklets allow grow your savings in addition to having the same advantages than the current account.

Note that in this year 2022 the remuneration of regulated savings accounts has improved significantly . Today, the booklet A and the LDDS record an interest rate of 2% . As for LEP, its rate is 4.6%.

Some tips

As you will have understood, in this period of inflation, it is better not to use the current account . Instead, opt for regulated booklets and take advantage of their advantages.

As explained by experts, no more than 'one month's salary' should be stored in a checking account. Otherwise, we lose purchasing power and it is very penalizing when the amount that is stored is quite substantial.

'In a period of inflation, having a lot of money in your current account means you have less purchasing power,' said Maxime Chipoy, president of MoneyVox in an interview with TF1info.

All this to say that the current account should only be used for daily expenses . Do not store too large sums in it, because it could penalize you .

what you must do, it is to place the important amounts on a booklet A . Thus, you will continue to have the same advantages, without losing purchasing power.

Source : Moneyvox