Inflation does not give rest and the task of trying to protect savings from the advance of inflation, or at least moderate the impact of rising prices on your purchasing power, becomes increasingly difficult. Not even the dollar, given the stability of the parallel exchange rates, has managed to be a short-term refuge once morest the rate of increase in the general level of prices. Two of the most widely used retail instruments, the traditional fixed term and UVA fixed term appear as easy-to-use alternatives to receive some kind of income from savings, but they give different results.
The race, right off the bat, appears difficult for the retail saver. The rate paid by traditional fixed terms is today 4% per month, compared to a Consumer Price Index (CPI) for April that reached 6% and would have been around 5% in May. In the case of the fixed term UVA, meanwhile, the expected return given inflation expectations is closer, at 5.9% per month, but its minimum term of 90 days makes it more difficult to adopt.
The question, then, is how much is it worth the trouble of taking the trouble to place a three-month fixed-term UVA term compared to the flexibility of the traditional one.
A financial adviser compared the results of the two types of deposits in the last twelve months to find out, at least so far, which was better.
“The UVA fixed term is taking a wide advantage over the traditional fixed term. In the last 3 months, the UVA fixed term yielded 17.1% versus 11.9% of the traditional fixed term”, Salvador Di Stéfano pointed out in a report.
To calculate the results, the analyst reviewed the recent evolution of the minimum interest rate set by the Central Bank for traditional 30-day fixed terms. Due to the commitment with the IMF and the acceleration of inflation, the entity raised the rates 5 times during this year, which means that the yield of the fixed term has not been the same every month.
“In the last 3 months the UVA fixed term yielded 17.1% versus 11.9% of the traditional fixed term”
The fixed term rate, in the last 12 monthshad the following evolution:
– It was located in 37% annual, from May 31, 2021 to January 5, 2022.
– On that date he went to 39% annual, this value was modified on February 17, 2022, which rose to 41.5% annual.
– Later, it increased once more on March 22, 2022 and rose to 43,5% Yearly.
– On April 13, 2022 increased to 46% Yearly.
– The last modification was on May 12th which increased to 48% Yearly.
“In the best scenario and capitalizing interest, if a year ago you made a 30-day fixed term, the result was a rate of 48.9% versus an inflation that we estimate at 61% per yearDiStefano wrote.
“If you made a 90-day UVA fixed term and renewed it every 3 months, capitalizing interest, the result gave you 55.9% per year, also below inflation of 61%.since the fixed term UVA takes inflation fortnightly and, therefore, forwards, it has a premium when inflation begins to fall”, calculated the specialist.
According to the analyst’s data, the UVA fixed term yielded 10.7% in the June-August 2021 quarter, very similar to what the traditional fixed term paid. The same thing happened in the following quarter, September-November 2021, in which the UVA fixed term yielded 9.5%, and in the December-February quarter, in which the UVA fixed term yielded 9.9%.
“The big difference we experienced in the last quarter where the UVA fixed term yielded 17.1%, taking a wide advantage over the traditional fixed term, which in three months yielded 11.9%”, he commented.
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