With the intention of seducing savers, the Government raised the interest rate paid by bank deposits, in a framework where inflation shows increasingly higher data. Therefore, the debate that is opening up among investors is to know if now it is better to carry out a traditional fixed term or if it is preferable to set up a UVA fixed termwhich is the one that adjusts for the prices of the economy.
It should be remembered that, in mid-September, the Central Bank raised the income of traditional deposits 5.5 percentage points to the current 75% annual (TNA)whose minimum reserve period is 30 days.
Therefore, traditional fixed terms grant a benefit of 6.25% per month.
Meanwhile, the UV placements they offer a return similar to the inflation registered from the previous 45 days, and the minimum stay to obtain that profit is 90 days.
In this sense, the rise in prices registered in July was 7.4% and in August it was 7%. And according to the latest Survey of Market Expectations (REM), carried out by the BCRA, an inflation of 6% is expected for September as a floor and 5.7% is expected for October..
Under this scenario, for analysts the traditional fixed term begins to gain ground, although everything will depend on the progress of prices in the economy for the coming months.
The projected yields for traditional fixed terms and UVA vary from “winner” month to month.
Traditional fixed term vs UVA fixed term
With the new rise in yields on fixed rate deposits, savers are now wondering if it is more profitable to put their money in a traditional 30-day fixed term or if it is better to turn to an adjustable placement by UVA.
“The yield of a constitution rises to 6.37% per month for the months of 31 days, such as October and December. In this context, the data for September are conclusive on the advantages of the UVA fixed term, given that its yield of 7 .08% in the month will exceed the new minimum rate by some margin”iProfessional graphics Andres Mendez, director of AMF Economy.
In fact, investors who placed a traditional fixed term before mid-September, they will receive the previous monthly rate of 5.79%. And those who have constituted it later, will earn 6.25%.
The question that this analyst poses is what will happen next month, especially if the market expectations of a reduction in inflation.
“The outlook will be different as of October if the expectations of a slight deceleration of the high inflationary levels registered in July and August come true. Under this assumption, the UVA fixed term would provide an income of ‘only’ 6% next December. Even from October it could already be around 7% per month, and then, starting in November, it would begin to fall,” summarizes Méndez.
What is the best fixed term for the coming months
For those savers who plan to make a deposit in October to generate income in the last quarter of the year, they should know that the result of the winner between a fixed term UVA and a traditional fixed term will be “fought”.
In the last three months of the year, it is calculated that both the traditional fixed term and the UVA fixed term will accumulate a similar gain of 20%.
“October will be for the UVA fixed term and December for the traditional one, with a virtual tie in November”, projects Méndez as the final marker of this “fight”.
When it comes to knowing which of the two options will be the winner in the entire last quarter, for this analyst, “practically, we would have to talk about a tiealthough by a few tenths the UVA fixed term will win over the traditional one”.
That is, with a Placement that pays based on the UVA price, an income of 20.5% would be obtained throughout the last quarter of the year, while with a fixed-rate deposit, 19.9% would be obtained in the same period.
Consequently, the debate that opens based on this result is the time required to immobilize the funds in a placement tied to inflation, where the money must remain embedded for 90 days in order to collect said yield.
“The underlying question is whether, given the short-termism of the domestic investor, it makes sense to bet on immobility for three months of the UVA fixed term. Or, failing that, the classic traditional renovation in 30 days tones up from this virtual drawsince this strengthens this short required period”, asks Méndez.
It is necessary to remember that, although the fixed term UVA has a repentance button after 30 days to be able to get out of it, in this case their performance is “penalized” with a lower monthly remuneration than that offered by a traditional fixed term. In other words, if a UVA placement is canceled in advance, only 5.92% per month (71% per year). On the other hand, a regular fixed term grants 6.25% monthly.
“If these forecasts are confirmed, the The recent rise in yields on traditional fixed-term deposits regains competitiveness in this last part of the year, after having lost by ‘goleada’ against UVA fixed-term deposits in what happened in 2022. In fact, a saver who made a traditional placement every 30 days from the beginning of 2022 to the present accumulated a relative loss of 10% compared to those who, successively, renewed their UVA constitution every 90 days,” concludes Méndez.