Current account: why is it necessary to move your money quickly?

modified: 2023-01-31 14:16:02

Given the current inflation, leaving large sums of money in the current account is counterproductive. Where should they be put then?

  Current account: why is it necessary to move your money quickly?

Many French people leave a large sum of money lying around in their current account . While some do this out of precaution or fear, others do it out of sheer negligence. However, in France, unlike the savings accounts , the majority of current accounts does not generate returns . Therefore, letting large sums of money sleep in a current account represents a shortfall . Why shouldn't money be left in a checking account? Where to invest money and when? All these interpretations we will answer you in the rest of this article .

Why should you avoid leaving money in a checking account?

It is true that a current account has several advantages . The account is free and you can make transactions immediately. On the other hand, current accounts are not remunerated. That is to say, the money available immediately on this type of account does not generate returns .

Faced with the many remunerated accounts, there is no point in keeping a large sum in a checking account. This is counterproductive. Relayed by TF1 INFO, published on October 4, 2022, an expert to give his opinion on the subject:

“Of course, it is strongly recommended to keep security savings available in your current account to cope with expenses and the vagaries of everyday life, but be careful, leaving too much money there is counterproductive! '. Indicates Anne Cocagne, senior consultant of La Centrale des SCPI (Civil Real Estate Investment Company).

The expert is more than right given the current price increase . The Presse-citron information site, published on January 27, 2023, reports the INSEE statistics:

“The cost of living, which increased by 5.2% on average in 2022, penalizes the savings of the French”.

Taking this inflation into account, our colleagues from Presse-citron said letting money sit in a checking account “is getting poorer” . Better yet, to avoid bank account scams, it is best to keep money somewhere other than a checking account . How to invest money and get rich with it?

3% return for a Livret A

To encourage the French to save, the government raised the interest rate of the Livret A . During the pandemic, this booklet was remunerated at 0.75% net. In August 2022, the yield rose to 2% net. Even better, this year, from February 1, the remuneration of the Livret A passes to 3% .

According to the Minister of the Economy, this revaluation would benefit the 55 million French people holding this savings account. Instead of letting money sleep in your current account, earn 3% per year of your capital in a Livret A. This account is completely secure . It is fully guaranteed by the state.

The only constraint is that a person can only have a Livret A . The maximum deposit limit is 22,950 euros. Once this amount is reached, you can transfer the excess to the LDDS. To avoid keeping money in a current account, you can make other investments other than the Livret A . Here are some examples :

  • Fortuneo which currently offers an annual gross rate of 3%
  • BforBank which is currently offering 3% annually as well
  • A Livret Bourso+ which pays 2% gross annually

Nevertheless, we would like to point out that these booklets are not regulated . That is to say, they are not insured by the state. It does not matter, because renowned banks like Crédit Mutuel Arkea are behind it.

Preferably, make your deposits before February 1st in a booklet

If you decide to withdraw your money from a current account and place it in a savings account, do this before February 1st. Most savings accounts calculate interest twice a month .

The first calculation is made on the first of the month and the second on the 16th. So, if you make money transfers before February 1st, interest will apply from February 1 . On the other hand, if you deposit money on the 2nd, you have to wait until the 16th of that month for the interest to be added to it.

There you go, you now know that keeping a large sum in a checking account is “counterproductive”. Savings books are great ways to store money for the long term .

Source : Presse-citron