The Central Bank (BCRA) announced the decision to lower the interest rate for deposits fixed term from 133% to 110% annual nominal (9% monthly), which implies that is no longer attractive for savers, as it will lose heavily against inflation that only has a floor of 20% in December. However, the monetary entity is promoting that banks continue offering the UVA fixed term.
Invest safely and that also offers a return in line with the evolution of inflation It is a priority for many savers. The UVA Fixed Term (Purchasing Value Unit) is then presented as an attractive option that adapts to these criteria.
What does a UVA Fixed Term entail and how to access it?
To begin with, setting it up is simple and accessible through the user’s homebanking. This investment modality allows the capital to be adjusted according to the Reference Stabilization Coefficient (CER), thus reflecting the evolution of inflation.
Flexibility is one of the most notable advantages of this option. Thus, the saver can choose the amount and term that best suits your financial needs. Minimum investment amounts start from $1,000 and terms range between 90 and 365 days, giving you the freedom to adapt your investment according to your convenience.
At the expiration of the term, the updated amount of the UVA constituted is received along with the established interest rate, offering a return adjusted to the inflation of the period.
What are the requirements to access this type of investment?
You must be over 18 years old, be a client of the bank and eventually, documentation may be required to justify the origin of the fundsto guarantee transparency in the operation.
- A practical example: If a UVA Fixed Term is created for $100,000 when the UVA value is 19.51, with a rate expressed in 5.125 UVAs, At the expiration of 180 days, if the UVA value is 21.20, the amount to be collected will be $108,650.
He UVA Fixed Term offers an investment opportunity that seeks to protect the user’s capital and obtain a return that adjusts to inflationary dynamics, ensuring growth in line with the country’s economic variations.}
In fact, The UVA fixed term remained the only fixed term that pays a positive real rate, since The Central Bank lowered the traditional fixed-term interest rate by 23 points.
The UVA fixed terms are fixed terms that adjust for inflation, through the formula UVA+1%. It is a deposit in pesos for at least 90 days up to 365 days that adjusts the rise in inflation plus a rate of 1% annually.
There are two formats, the traditional one and the pre-cancellable one. Within this second option what changes is that the BCRA decided eliminate the minimum pre-payment rate for UVA fixed-term loans, which means that the conditions will now depend on the banks.
Furthermore, the UVA fixed term follow the evolution of price increases. When establishing the fixed term, it is done in Purchasing Value Units updateable by “CER” (UVA), so, at the end of the term, The amount of UVA is paid at the current value plus a small interest of around 1%.
The UVA value is updated daily and its value can be consulted on the website of the Central Bank of the Argentine Republic (BCRA).
Source: Ambito
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