He saver faces a dilemma to protect its income, because the constant drop in the interest rate affects the yield of the traditional fixed termwhile the monthly decrease in inflation also generates lower profitability in the UVA fixed term. Therefore, the comparison made by the investor is which of the two instruments will be the winner in the coming months.
It is worth remembering that in recent times the downward trend in the consumer price index (CPI) was very abrupt, as was the decline in the reference interest rate, which was modified by the Central Bank about four times from the beginning of March until now.
Therefore, the estimates made on how much a UVA fixed term can yield versus a traditional fixed term in the coming months, It adjusts to the current situation. Although, of course, with the accelerated variations of the different variables, it is likely to change in the coming weeks.
It is worth remembering that On the first Thursday of May, the BCRA lowered the reference rate again by about 10 percentage points. Therefore, today a traditional fixed term is paying an average annual nominal rate (TNA) of 40% for retail constitutions of natural persons for amounts placed less than $10 million.
In this way, the income offered by a placement is 3.29% at 30 dayswhich is the minimum reserve period required by the financial system for this type of placements.
Instead, a fixed term UVA adjusts its profitability based on inflation records, but the big drawback is that it requests to immobilize the deposit made for a period of 180 days. A huge time in this changing Argentina.
The plus point is that it is the investment that yields the most throughout 2024because in less than 5 months it accumulates an increase of almost the 100% in said period.
The comparison of the UVA fixed term versus the traditional fixed term indicates that the option that adjusts for inflation continues to win widely.
UVA fixed term versus traditional fixed term
When comparing what will happen with the traditional fixed term and with the UVA fixed term in the next six monthsbased on the x-ray with the current variables on the table, the projections indicate that the investment option that adjusts for inflation more than doubles the pre-established rate.
It is that a pTraditional fixed bond provides around 3.40% interest in the 31 days of May, while a UVA placement will provide an estimated income of 10% for the month.
Meanwhile, for Junewith the version of a placement 30 days you will get 3.29%while it is projected that the UVA will grant 8.29% in that period.
And with the trend of decreasing inflation for the coming months, it is estimated that the UVA fixed term will begin to progressively decrease its performance. Thus, in Octoberafter 6 months of fitting, it would be achieved around 5.9%.
“The holding of pesos is exposed to a singular liquefaction in this first part of 2024, and despite being paid with interest, the traditional fixed term is no exception. The case of the UVA fixed term expressed in UVA is different, which captures the evolution of internal prices with a 45-day delay. Its strength is that since there are decreasing inflation expectations month by month, and capturing past inflation, it becomes profitable in the face of the evolution of internal prices,” he details to iProfesional. Andres Mendezdirector of AMF Economía.
This phenomenon began to be noticed last February, and it is observed that By progressively lowering inflation, the income granted by the UVA fixed term is higher to the advance of prices in the economy, because it adjusts late.
“In this way, and drawing a forecast for May and the coming months, it can be noted that, while the UVA fixed-term holders will improve their future capacity To acquire a certain basket of goods and services through savings, investors positioned in traditional fixed-term investors will face a real deterioration of their holdings”, Mendez emphasizes.
He positive point what does he have traditional fixed term is liquiditybecause the lace is only 30 days.
“Instead, To obtain the benefits of the UVA you must maintain the certificate for 6 monthsan alternative that allows pre-cancellation after the first 30 days, although in that case early cancellation is significantly penalized, in order to charge a much lower rate than that received for the traditional option,” warns Méndez.
Ultimately, the UVA fixed term provides a much higher profit the traditional version and even beats inflation. The big drawback it has is that you have to wait 180 days for it, an eternal time in such a changing Argentina. Due to this extension and implicit risk, it is an investment that hardly choose less than 5% of the incumbents of time deposits.-
