In times of high inflation, the minimum expected from a investment in pesos is that when withdrawing the money the profit obtained **at least compensate** price increases for the period. That is **the paste** or -ideally- beat inflation.

The **traditional fixed term**For much of the past year, **failed to comply** that requirement since people made a deposit; Y **30 days** Later, when he recovered his capital plus interest, with all that money he managed to **buy less** products and services than before.

Even though the rates increased month after month, inflation climbed even more and the same saver lost purchasing power. Recently, however, **the equation changed**and this popular investment offered by banks began to **recover attractiveness**.

What happened? That **monthly inflation**although it continues at alarming levels, **descended some steps** with respect to the peaks of **7,4%** y **7%** it had reached in July and August 2022. In November the Consumer Price Index advanced **4,9%** and in December, according to the experts, it would have been close to 5.5%.

But the **interest rates** of the fixed terms, for the moment, they did not accompany that slowdown. **Still as high as September **and now they are clearly above expected inflation, at least for the **first two months** of 2023.

## Traditional fixed terms: what is the going rate and how much do they pay in concrete amounts?

Since **September 2022**for provision of the Central Bank of the Argentine Republic (BCRA), banks are obliged to reward with a **nominal annual rate **(TNA) of **75%** small savers to immobilize their money for **30 days** or more.

In specific amounts, according to the online simulator of Banco Nación, a fixed term at **30 days** is generating a **effective yield** of **6,16%**(last July, on the other hand, the effective monthly rate was 4.35%).

This means, with rounded values, that for **example**:

- who deposits
**$ 20.000**will get**$ 21.233**in a month: he will have won**$ 1.233**. - who deposits
**$ 50.000**may withdraw**$ 53.082**in a month: he will have won**$ 3.082**. - who deposits
**$ 100.000**Bill to**$ 106.164**in a month: he will have won**$ 6.164**.

Viewed another way, with **performance goals** determined:

- For
**win $2,000**in 30 days you have to deposit**$ 32.445**. - For
**win $5,000**in 30 days you have to invest**$ 81.112**. - For
**win $10,000**in 30 days you have to put**$ 162.223**.

## How much could fixed terms beat inflation, according to economists?

As people usually make this investment for only **30 days** and renews it each time -if it suits you-, the key is to compare the **monthly profit** of the fixed term with inflation. But not past inflation but with **the future**: what is expected for him **short term**, for the following month.

And what do they say? **latest predictions**? The 38 consultants, banks and study centers surveyed by the BCRA in its latest Survey of Market Expectations (REM), carried out **end of december**they calculated that inflation closed at 5.5% that monthand they foresaw that it will be **5.6% in January** and of the **5.7% in February**.

So, if there are no surprises and that ends up being met, a fixed term established now and withdrawn within a month effectively **would serve as a “refuge”**since it will yield a **6,16%** monthly. Almost half a point more.

“Today, taking into account the drop in inflation, the rates of the common fixed term **they are attractive**”, considered the economist **Sebastian Menescaldi**director of the consulting firm EcoGo, where they project that for **January and February** the inflation rate will have a “**5% floor**“, and that only in March would it be a little higher.

“With a horizon of** short term**now **it suits more** the common fixed term than other investments with returns tied to inflation, such as the UVA fixed term. It was like that in the last two months and we estimate that **this month will be too**added Menescaldi.

## Fixed terms UVA: what is the alternative that guarantees maintaining purchasing power?

Now, for those who distrust these forecasts and fear that inflation could hit a **unexpected jump** During the summer, an available alternative is to bet on the UVA fixed terms, which **they claim to win** **slightly** to inflation, no matter how much it ends up being. Although they require leaving the money **more time**.

The UVA fixed terms are those that work with the **Purchasing Value Units**. When constituting them, the weights **are converted** at the price of the day 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** It is **90 days**instead of 30. And after those three months, the UVAs are converted back to pesos at the current price, which will be **greater than the initial**.

How much older? Enough for **exactly offset the increases** of prices of the quarter and that the silver **have not lost** purchasing power.

The value of the grape, for example, increased **19,18%** in the **last three months**and also updated the money of those who made a deposit in UVA last **October 9** for 90 days, to withdraw it just this **January 9th**. if they were **$ 100.000**they became **$ 119.180**.

But in addition, the bank assures whoever makes a UVA fixed term a **actual profit**since 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 precancellable one, and which one is appropriate?

The most attractive option today is the **precancelable** because, if the deadline is met **90 days**the banks must compensate the inflation of the quarter and a **additional fee** of at least one **1% annual**.

Furthermore, 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 paid as if it had been done in the traditional way with a TNA of **71%** (**4 points less** 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 lower. 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*