The hemorrhage of savings accounts continues

The French continued to dip into their Livret A savings accounts in April, preferring other more profitable savings products, so that the outstanding amount fell by 1,28 billion euros, marking the fourth consecutive month of decline, the Caisse des dépôts (CDC) announced on Friday, May 22.

This is the worst April for the Livret A savings account since the CDC began collecting this data in 2009.

The total amount deposited in the approximately 58 million Livret A accounts remains substantial, at 445,2 billion euros.

Sustainable and Solidarity Development Savings Accounts (LDDS), with the same interest rate as the Livret A (1,5% since February), saw withdrawals exceed deposits by €250 million. The outstanding balance at the end of April was €165 billion.

In total, nearly five billion euros have evaporated from these two regulated savings products since the beginning of the year, the largest amount in 18 years.

They suffer mainly from the weakness of their remuneration rate, which has been halved in barely a year.

This decline benefits life insurance, a competing product marketed by banks and insurance companies.

The sums deposited in Livret A and LDDS accounts are intended for financing social housing and urban policy.

But the diversification of investments promoted by the Caisse des dépôts, for example to finance the upcoming six new nuclear reactors, is a subject of debate.

"This use of regulated savings (...) would inevitably be carried out at the expense of the financing of social housing and its insulation," several organizations, including the Right to Housing (DAL), Greenpeace France and the parties Les Écologistes and La France insoumise, disapproved on Monday.

Although there is currently a lack of interest in the Livret A savings account, it could regain popularity in the summer thanks to a likely increase in its rate, driven by inflation.

The decision will be made in mid-July by the Minister of the Economy, Roland Lescure, and the former Secretary General of the Elysée, Emmanuel Moulin, who on Wednesday received the green light from parliamentarians to become the next Governor of the Bank of France.

The Livret d'épargne populaire (LEP), accessible under means conditions and yielding 2,5%, also did not unleash the crowds in April, the Caisse des dépôts also specified on Friday.

Savers withdrew 320 million euros more than they deposited into their LEP accounts.