Faced with an escalation in the price of the dollar in its “free” versions (MEP, blue and CCL), the BCRA decided to increase the interest rate
By Ian Muñoz Pederzoli
21/04/2023 – 19,45hs
In a few days, the dollar it shot up more than $40, generating great fear among savers. Given this scenario, the BCRA automatically exited to raise the interest rate to prevent savers from disarming their positions in the fixed term.
Traditional fixed term vs. dollar: which is better?
In the last days the dollar rose sharply, raising its price by more than $40 for the blue listing and nearly $40 for the MEP exchange rate. This fact aroused fear among savers who wonder if it is time to bet on the dollar or continue the fixed term.
For this, the first thing is to analyze the new fixed term interest rate. By raising the nominal annual rate to 81%, it generates a monthly nominal interest of 6.75%. In this way, taking an exchange rate of $440, the dollar should rise to $470, a difficult number to reach in the short term, but not impossible considering that the exchange rates are “backward”, according to specialists.
On the other hand, if we take into account the “historical” data, the fixed term was the winner in recent months, April being, for the moment, one of the few months in which the dollar ranked above this type of placement.
Banco Ciudad fixed term: how much can you earn by investing $200,000?
If $200,000 is deposited in the city Bank at 30 days, it will generate a return of about $13,500 in interest, which added to the original principal of $200,000 gives a total of $213,500. However, it is important to take into account the inflation I devaluation of the period to make an accurate assessment.
In order to obtain real profitability, inflation for the period must be discounted.
If you consider the inflation, assuming it is 7% in April, the real interest rate would be negative (-0.25%). In other words, you would lose $500 in actual purchasing power, as the amount earned in interest would not cover the increased cost of living.
If the money is reinvested every 30 days and the interest rate, you can get a effective annual rate of around 119.4%. In this way, an average monthly return of approximately 9.95% can be obtained, which would result in a total of $438,800 at the end of the period. This return would include interest earned on the original principal of $200,000 and interest earned on $238,800.
Step by step: how to make a fixed term at Banco Ciudad
To do a fixed term in it city Bank a series of simple and easy steps must be followed:
- Enter home banking with username and password
- Go to the main menu and select the “Investments” option, enter the “Fixed term” section and click on the “Incorporate” button
- Enter the amount to invest. In this case, it would be $200,000 that must be deposited in the account at the time of making the operation.
- Select the period of time in which the investment is to be made and the type of fixed term. In this case it would be the “traditional” fixed term and a period of 30 days. It is important to remember that, in the event that you are willing to leave the money for a longer term, at this time it is not convenient to do so for a longer period, since the interest at 30, 60, 90 days and even one year is the same. In this way, compound interest would not be applied, that is, the rate of 119.4% mentioned above, so it is convenient to do it every 30 days and constantly renew it.
- Enter the account number from which the $200,000 will be debited
- Finally, you must click on “Confirm” and you will be investing your money
