The new interest rate of the traditional fixed term reached 91% TNA, but through a mechanism that gain can be increased up to 141%. How to do it
By Mariano Jaimovich
03/05/2023 – 16,40hs
The new interest rate paid by a traditional fixed term is 91% per year, but few savers know that they can increase that performance up to 141% in 12 months, an income that so far far exceeds the 120% inflation projected by various economists. A strategy that is simple, but requires patience to be able to win more.
To take into account, the key to generating a higher income with a minimum deposit of 30 days is to evaluate that the Central Bank raised the interest offered by this instrument by 10 percentage points until reaching the 91% nominal annual rate (TNA)for placements made by individuals for amounts up to 30 million pesos.
This performance, which is the highest in more than 20 years, is equivalent to earning a monthly income of 7.48%. A figure that is close to the current level of inflation, which in March was 7.7% and which in April various private economists estimate was above 7%.
However, very few savers know that if they establish a specific strategy in their traditional fixed-term placement they can increase their income from 91% TNA to 141% per year.
How to earn 141% with a fixed term
He The mechanism to be able to earn 141% effective annual rate (TEA) with a traditional fixed term consists, first of all, in not withdrawing the interest earned every 30 days, but in reinvesting it together with the rest of the capital already saved.
That is, a 30-day deposit is made, which is the minimum period established by the financial system, and when that position expires a month and the 7.48% rate (91% TNA) is obtained, Instead of extracting that income, the fixed term is renewed again with the initial money plus with that plus obtained.
The traditional fixed term now pays 91% nominal annual rate (TNA), which can be increased to 141% through a strategy.
If this strategy is repeated every month, for a whole year, as the months go by, the accumulated interest earned in each period will be reinvested, so the available funds will increase. In such a way, in those 12 months it will be equivalent to earning an annual rate of 141% (TEA).
A number that far exceeds the expected inflation by private consultants for a whole year, close to 120%.
So, the Theoretical monthly rate that is achieved with this investment for a whole year is 11.75%a level that exceeds the consumer price index (CPI), which is around 7.5% per month.
How much do you earn with $100,000 a year
In case of A saver wishes to place $100,000 in a traditional 30-day fixed term, and renews all the accumulated capital each month (the initial investment plus interest), he will obtain a total capital of $241,000 over a period of one year.
This figure is equivalent to earning a “extra” rent of $141,000 in 12 monthswhich is equivalent to obtaining a monthly notional amount of $11,750.
On the other hand, if $100,000 is placed in a traditional fixed term for only 30 days and the money is withdrawn after waiting that time, $107,480 will be achieved. In other words, they will earn and be able to withdraw 7,480 pesos per month.
Therefore, if you choose to opt for the long term, and wait to obtain the rent for a whole year, at the end of the day you will have earned an “extra” equivalent of $4,270 per month, or a plus of $51,240 more in a year than withdraw the earnings every 30 days.
