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Remunerated accounts offered by virtual wallets have become increasingly popular in recent years, serving as a safe haven to protect savings and everyday transactions from inflation. Their performance, often linked to mutual fund returns, has fluctuated significantly in recent weeks, making it beneficial to compare the leading providers to understand their yields.
A report from the consulting firm Adila Fin & Pay showcases a simple, recent test. They deposited 10,000 pesos between June 18 and 27 into wallets like Mercado Pago, n1u, Naranja X, Personal Pay, Prex, and Ualá to gauge their performance over that 10-day period.
The app that performed best in that period was Naranja X, paying 103.49 pesos in interest. It was followed by Ualá with 101.55 pesos, Personal Pay with 89.06 pesos, n1u with 85.47 pesos, Mercado Pago with 77.58 pesos, and Prex with 74.88 pesos.
It’s worth noting that Naranja X offers a nominal interest rate of 42% per year for balances deposited in its account up to $400,000. In other cases, the remuneration fluctuates daily, linked to the performance of a mutual investment fund (FCI), with no limit on the funds deposited.
Generally, the FCI’s performance is lower than the rate offered by fixed terms, but it provides the advantage of immediate liquidity. The money is always available, even when the balance is remunerated.
As explained by Adila Fin & Pay, “This survey highlights the importance of understanding the capabilities of each app where users can invest. It demonstrates once again that in the fintech world, it’s not just about the performance of each investment but also about the complete user experience when making these financial investments.”
They also elaborated on the different ways each virtual wallet presents information to the user. “The Ualá and Naranja X apps not only recorded returns daily, including weekends, but also on holidays that took place during the test. This transparency and usefulness for users provide them with greater control and information about their placements, even on dates when banks traditionally don’t show daily returns, but rather a cumulative return on the following business day,” the consultancy firm pointed out.
The yield of the FCI is usually below the rate paid by fixed terms but with the advantage of immediate liquidity.
With the Central Bank’s sharp reduction in retail rates, interest-bearing accounts have become a more enticing option. A 30-day fixed-term deposit yields around 2.8%, with the inability to access the funds whenever desired. Apps, on the other hand, always allow access to those savings, even with a slightly lower yield.
According to data from the Central Bank’s Retail Payments Report, “last April, 16.7 million payment accounts were registered with a balance of 493.5 billion pesos, while balances invested in money market deposits reached 1.9 trillion pesos. Both concepts, considered together, represent 4.85% of the total private sector deposits, which amounted to $48.8 trillion in the mentioned month.”
Virtual Wallets: Where Your Money Earns Interest While Remaining Accessible
The surge in popularity of remunerated accounts offered by virtual wallets is a testament to their appeal as a safe haven for savings and everyday transactions in the face of rising inflation. These digital platforms, increasingly intertwined with the performance of mutual funds, have experienced significant fluctuations in their returns in recent weeks. Therefore, comparing the leading contenders is crucial for understanding their potential returns.
Adila Fin & Pay’s Performance Test: Unveiling the Leaders
A recent report by Adila Fin & Pay provides valuable insights through a simple yet informative test. The firm deposited 10,000 pesos between June 18th and 27th into six popular virtual wallets – Mercado Pago, n1u, Naranja X, Personal Pay, Prex, and Ualá – to measure their performance over a 10-day period.
The results revealed Naranja X as the top performer, generating 103.49 pesos in interest. Close behind was Ualá with 101.55 pesos, followed by Personal Pay (89.06 pesos), n1u (85.47 pesos), Mercado Pago (77.58 pesos), and Prex (74.88 pesos).
Dissecting Naranja X’s High Yield
It’s noteworthy that Naranja X offers a nominal annual interest rate of 42% for balances deposited in its account up to $400,000. For balances exceeding this threshold, the remuneration aligns with the daily performance of a mutual investment fund (FCI), with no limit on the deposited funds.
FCI Performance: Striking a Balance Between Yield and Liquidity
Generally, the performance of FCI typically falls below the interest rates offered by fixed-term deposits. However, they excel in providing immediate liquidity, as the remunerated funds remain readily accessible.
Adila Fin & Pay highlights the paramount importance of understanding the capabilities of each app. Their analysis underscores that in the dynamic world of fintech, investment performance isn’t the sole determining factor; the overall user experience when engaging in financial investments is equally crucial.
Transparency and User Control: A Differentiator
Adila Fin & Pay’s report sheds light on the unique features offered by Ualá and Naranja X. These apps go beyond simply tracking returns; they provide daily updates, including weekends and holidays. This transparency empowers users with comprehensive control and insights into their investments, even on days when traditional banks typically only present cumulative returns on the following business day.
Fixed Term vs. Virtual Wallets: A Comparative Analysis
With the Central Bank aggressively lowering retail rates, interest-bearing accounts have emerged as a more attractive option. While a 30-day fixed-term deposit currently yields around 2.8%, users are restricted from accessing their funds until the maturity date. Virtual wallets, on the other hand, provide constant access to savings, albeit with slightly lower yields.
A Growing Trend: The Rise of Digital Financial Services
Data from the Central Bank’s Retail Payments Report reveals a significant shift in consumer preferences. As of April, 16.7 million payment accounts were registered, holding a combined balance of 493.5 billion pesos, while money market deposit investments reached 1.9 trillion pesos. Together, these represent 4.85% of total private sector deposits, which amounted to $48.8 trillion in the same month.
The Future of Financial Management: Digital Wallets Leading the Way
The rapid growth in digital payment accounts and investments underscores the increasing reliance on virtual wallets for financial management. These platforms offer a blend of accessibility, convenience, and potential returns, making them an increasingly popular choice for consumers seeking greater financial control and flexibility.