In the last days all the banks began to offer more tempting interests for fixed terms in pesos. They thus complied with a new official order of increase rateswhich came after learning that inflation was 7% in Augustjust below the record 7.4% in July.
Since last Thursday, September 15by provision of the Central Bank of the Argentine Republic (BCRA), banks were obliged to reward with a nominal annual rate (TNA) of 75% small savers who immobilize their money for 30 days or more.
It was a jump from 5.5 points with respect to the minimum rate that was in force up to that moment -which was 69.5%- and an improvement of 22 points compared to 53% who paid traditional fixed terms until end of july.
Now, with the new rates,how much money do you have to invest exactly to receive a relevant profit within a month? What is the specific amount of interest that one can collect at the end of the term? And what are the chances that that performance offset inflation?
Traditional fixed terms: how much do they yield now in specific amounts?
According to the Banco Nación online simulator, a fixed term to 30 days is generating a effective yield of 6,16%. In comparison, before the last change, the mandatory monthly effective rate was 5.71%; and in July, 4.35%.
This means, with rounded values, that by example:
- For earn $2,000 in 30 days now you have to deposit $ 32.445 (before, however, $35,012 was required and in July $45,915).
- For win $5,000 in 30 days you have to invest $ 81.112 (before they were $87,530 and in July $114,780).
- For earn $10,000 in 30 days you have to put $ 162.223 (before they were $175,060 and in July $229,560).
Seen another way, with investment amounts determined:
- who deposit $ 20.000 will get $ 21.233 in a month: will have won $ 1.233 (before, instead, the profit was $1,142 and in July it was $871).
- who deposit $ 50.000 you will be able to withdraw $53,082 in one month: you will have earned $ 3.082 (before they were $2,856 and in July $2,178).
- who deposit $ 100.000 will earn $106,164 in a month: you will have earned $ 6.164 (before they were $5,712 and in July $4,356).
On the other hand, in the theoretical case that current rates are maintained and the saver always reinvest everything you charge every 30 days –principal plus interest-, the calculation shows that within one year I would get an amount in pesos 107,05% mayor. If you put in $100,000, you would end up with $207,050 in 365 days.
Do the new fixed-term rates serve as a refuge against inflation?
Traditional fixed term rates are now closer than before of expected inflation. But it is not yet clear whether they would be able to guarantee savers that their money will maintain purchasing powerat least in the short term (which matters most, since people usually make this investment for only 30 days and renew it).
In front of 6.16% monthly cash that is paying a common fixed term, the 38 consultants and study centers surveyed by the BCRA in its latest Survey of Market Expectations (REM), carried out at the end of august, they had foreseen that inflation will end up being 6% in September and of 5.7% in October. If that ends up being fulfilled, the investment will have served as a refuge.
However, after that survey, the official inflation figure for August was higher than expected in the REM. And now many consultants they corrected upwards their forecasts: they already project for September 6% or 6.5% as floorwhich would also be maintained for October and November, just as reported Clarion days ago.
In this framework, many Argentines continue betting on the fixed installments UVAan alternative that does claims to beat inflationthough as a counter it requires leave the money longer.
UVA fixed terms: how is the option that “shields” the purchasing power of the pesos?
UVA fixed terms are those that work with the system of Purchasing Value Units. When constituting them, the weights are converted to the day’s price in UVAs, which are a kind of “anti-inflation” currency whose value adjusts daily according to the CER coefficient, at the rate set by the Inflation index of the INDEC.
The minimum term of this investment is 90 daysinstead of 30. But what is attractive is that, after those three months, the UVAs are converted back to pesos at the price of the moment, which will be greater than the initial.
How much older? Enough for compensate exactly the raises of prices for the quarter and that silver have not lost purchasing power.
The value of the UVA, for example, increased 20% in the last three monthsand likewise updated the money of whoever made a deposit in UVA on June 21 for 90 days, to pick it up right this September 21st. if they were $ 100.000became $ 120.000.
But in addition, the bank assures whoever makes a UVA fixed term a actual profitsince it not only returns the amount adjusted for inflation but also adds a small interest rate.
What is the difference between the common UVA fixed term and the pre-cancellable one, and which one is best?
The most attractive option today is the precancelable because, if the term of 90 daysthe banks must compensate for the inflation of the quarter and a additional fee of at least one 1% annual.
Also, if the saver suddenly needed use the money, from day 30 You have a chance to ask for it back. And in that case, the fixed term will have performed as if it had been done in the traditional way with a TNA of the 71% (4 points lower to the current one).
Choosing the common UVA fixed term, on the other hand, is less convenient today since the money is deposited Yes or yes for 90 days and the additional fee is less. For the minimum term, instead of UVA + 1%many banks offer to add only 0.1%, 0.25% or at most 0.5%, and in some cases nothing (0%).
MDG