The invisible inflation: how low yields quietly erode French corporate cash

French companies are currently holding record levels of cash — more than €600 billion according to Banque de France data. Yet most of this liquidity sits idle on non-remunerated or ultra-low-yield accounts, earning close to 0 %.

Meanwhile, inflation in France remains around 2.5 %, which means that every euro left inactive loses purchasing power every single day.
This is what we call invisible inflation: a silent erosion that destroys value without companies even noticing it.

The gap between inflation and deposit yields has never been wider

Most corporate bank accounts in France still pay:

• 0 % on current accounts
• 1–2 % on term deposits (with lock-up)
• 1.7 % on Livret-type savings (for individuals, not companies)

But inflation sits between 2 and 3 %, creating a negative real return.

This gap results in:

• reduced working capital power
• lower investment capacity
• erosion of margins
• weakened long-term financial resilience

For SMEs especially, this is not a theoretical risk — it translates into lost competitiveness.

Why companies still leave cash idle

Three reasons explain this paradox:

1. Banking habits are hard to change

Many French SMEs are used to traditional accounts and have not explored modern cash solutions.

2. Treasury management is often manual

Spreadsheets and fragmented banking tools make optimisation difficult.

3. Misconception: “investing is risky”

In reality, money-market ETFs like Smart Overnight carry very low risk and offer daily liquidity, while still tracking the ECB deposit rate.

The real cost of invisible inflation

Let’s consider a company holding €2 million in cash on a non-yielding account.
At 2.5 % inflation, the loss of purchasing power is:

→ €50,000 per year evaporating silently.
→ The equivalent of a salary, new equipment, or a marketing budget — gone.

Invisible inflation is not just an economic concept.
It is a direct operational loss.

Smarter corporate treasury: liquidity + yield

Smart Overnight – liquidity with real income

• Tracks euro money-market rates
• Linked to the ECB deposit facility
• Daily interest accrual
• Full liquidity, no lock-up

Perfect for operational cash or buffer reserves.

Amundi High Yield ESG – yield for excess cash

• ESG-screened European corporate bonds
• Benefits when interest rates fall
• Ideal for cash that can be allocated for 6–18 months

Together, they allow companies to beat invisible inflation and recover purchasing power.

How Velesios makes optimisation simple

The greatest barrier to better cash management has historically been complexity.
Velesios removes it.

• Online onboarding directly on the Velesios platform
• Corporate or individual securities account
• Execution and custody through Interactive Brokers
• Lower costs thanks to order aggregation
• A clean dashboard to monitor liquidity, yield, and allocation

Corporate treasury becomes efficient, transparent, and modern — without administrative burden.

Conclusion

Invisible inflation is one of the biggest silent destroyers of corporate value in France.
By replacing non-yielding accounts with smart, flexible instruments such as Smart Overnight and High Yield ESG, companies can protect their liquidity, rebuild purchasing power, and strengthen financial resilience.

In 2025 and beyond, the best treasury strategy is simple:
don’t let inflation eat your cash. Make it work.

FAQ: inflation and corporate liquidity

Is inflation really a risk if cash is not invested?
Yes — inflation is a guaranteed loss of value if returns are below price increases.

Are money-market ETFs safe?
They follow conservative instruments and offer daily liquidity. Risk is minimal.

Can small businesses use these solutions?
Absolutely. Through Velesios, SMEs get access to institutional-grade tools.

How quickly can cash be accessed?
Smart Overnight provides daily redemption — almost like a bank account, but with yield.

Sources & references

• Banque de France – Deposits of non-financial corporations
• Service-Public – Livret A rate update (1.7 %)
• European Central Bank – Deposit facility rate
• Amundi – EUR High Yield Corporate Bond ESG UCITS ETF Factsheet