A reader questions whether funds from a La Banque Postale account are less likely to support defense companies compared to a Livret A account. The French government seeks to bolster the defense sector by tapping into private savings, prompting discussions about funding sources like national loans and savings accounts. While Livret A funds primarily finance social housing, banks, including La Banque Postale, also contribute to defense financing. For those wishing to avoid supporting defense companies, ethical banking options like Crédit Coopératif or Hélios may be preferable.
Does Your Bank Postale Account Fund Defense Companies Less Than a Livret A?
This is a question raised by a reader to MoneyVox. To support the growth of the defense industry, the French government is turning to private savings. This raises inquiries about the funding channels available, including national loans, savings accounts, and the Livret A. Ultimately, a new fund is set to be established.
According to Economy Minister Eric Lombard, individuals can become “indirect shareholders of defense sector companies” by investing with a minimum amount of 500 euros. While the details are still being finalized, interested individuals will have the option to invest in this fund through life insurance contracts, retirement savings plans, or securities accounts.
What Purpose Does the Money in a Livret A Serve?
Allocating funds from Livret A accounts directly to defense companies is not in the cards. Currently, the money deposited in Livret A accounts primarily supports social housing and urban development through the Caisse des dépôts, which manages about 60% of the total funds. The remaining 40% is overseen by banks, which generally direct it towards financing small and medium-sized enterprises (SMEs). However, it’s worth noting that banks could choose to finance defense companies using Livret A funds if they opt to do so.
Regarding your concern, you may wonder if your savings would be safer from funding defense companies by keeping them in a checking account at La Banque Postale rather than in a Livret A. It’s challenging to provide a definitive answer. The funds deposited in a current account aren’t just sitting idle.
Banks utilize the money you deposit for medium- or long-term loans to individuals, consumer loans, mortgages, and corporate financing. Therefore, there is a tangible connection between your checking account deposits and the financing of the real economy.
Major Banks and Their Role in Defense Financing
La Banque Postale is one among many that finance companies in the defense sector. Currently, the six largest French banks are providing approximately 37 billion euros to defense companies. The commitment of these banks extends beyond loans and guarantees; they also finance the acquisition of French materials for export, with at least 12 billion euros in loans directed towards clients and partners of French manufacturers. The French Banking Federation (FBF) emphasizes that no significant French export project has been financed without the backing of a French bank.
In light of this, La Banque Postale has published a document titled “Principle of Intervention of La Banque Postale in the Defense Sector.” However, it remains unclear whether any of your money in a checking account is directly involved in funding defense companies or if it comes from other individual or business clients.
Considering this situation, it might be wiser for you to keep your savings in a Livret A, which offers a net return of 2.4%. This is notably better than the interest-free checking account option. If you qualify, you might also explore the popular savings account that allows investments of up to 10,000 euros at a competitive rate of 3.5% net. This offers an excellent risk-free investment opportunity while allowing you access to your funds anytime.
If you want to ensure your money does not contribute to funding defense companies, consider alternative banking options such as Crédit Coopératif or Hélios. With Hélios, for instance, your deposits support ecological transition projects like sustainable agriculture, low-carbon mobility, ecosystem conservation, and waste management. The same principles apply to other green and ethical banks.
Comparing Green, Ethical, and Solidarity Banking Offers