What is a fixed term, how much does it pay and how is it invested?

The fixed deadlines have established themselves as one of the safest and most accessible investment options in Argentina, especially in an economic context marked by uncertainty.

As the country faces challenges such as inflation and fluctuations in the dollar, many investors seek refuge in instruments that offer stable and predictable returns.

What is a fixed term?

A fixed term is a savings and investment instrument that consists of depositing an amount of money in a financial institution for a specific period of time. At the end of the term, the bank returns the money plus the interest generated.

Fixed deadlines are a low risk investment alternativesince the profitability that will be obtained is known in advance. The profitability increases depending on the maturity period.

In Argentina, fixed deadlines They can be made in pesos and dollars. There are different types of fixed terms.

Types of Fixed Term

There are different types of fixed terms that adapt to the needs of investors:

• Traditional Fixed Term: This type offers a fixed rate for the entire deposit period. It is ideal for those seeking certainty in their returns.
• UVA Fixed Term: This instrument adjusts capital according to the variation in the Reference Stabilization Coefficient (CER), which can be advantageous in an inflationary environment. At the end of the term, the amount is converted to pesos at the value of the corresponding UVA on that date.
• Precancellable Fixed Term: It allows you to withdraw the money before maturity, although this may imply a penalty on the interest generated. This option is useful for those who may need access to their capital before the agreed deadline.

Despite its low risk, it is essential for investors to consider some factors before opting for a fixed term. Inflation continues to be a worrying issue in Argentina; Therefore, it is essential to evaluate whether expected returns will actually exceed projected inflation.

Furthermore, the choice between a traditional fixed term or one adjusted by UVA will depend on the risk profile and economic expectations of the investor.

How do you open a fixed term?

To invest in a fixed term, the deposit can be made in a bank, both virtually and in the branch. Some entities have different alternatives depending on how the opening is carried out. For example, some pay more if it is done via home banking.

Once the amount to be deposited has been defined, the period for which the money will be retained is chosen. The longer the time, the greater the interest obtained.