How and where do I deposit my CTS to grow my money?

When a person works in any workplace they receive Compensation for Times of Service (CTS). This amount is used so that the worker can have money when he becomes unemployed, or to be able to make necessary expenses such as the payment of outstanding debts, the acquisition of goods and services, among other motivations. In times of the COVID-19 pandemic, growing the CTS has become an urgent need, and in the coming weeks this amount will be received by 4 million people in Peru.

What is and when do they deposit the CTS?

Compensation for Time of Services (CTS) is a labor law that works as unemployment insurance. That is, a fund that is intended to be used while the person can return to work. The maximum date to make the payment for this second period is November 15. If the company exceeds this period, it may receive a differentiated fine, depending on the case, considered a serious offense.

Is it advisable to withdraw my CTS?

According to finance specialist Jorge Carrillo told RPP, it is advisable for the moment not to withdraw the money, only when this action is necessaryHe also asked the user to consider the CTS account that pays better interest rates, compared to a time deposit or a savings account.

The Superintendency of Banking, Insurance and AFP (SBS) reported on its official website that the Annual Effective Rates of Return (TREA) of these accounts are between 0.25% and 6.9% on average, as of November 3.

In that sense, if you are thinking of withdrawing the money but not to use it to pay urgent debts, have other savings and investment alternatives at hand, which we detail below:

• Savings in a financial institution
• Term deposit in cooperatives
• Investing in the stock market
• Investment in the initial of a property, among others.

How much can I withdraw from my CTS?

Remember that, normally it is allowed to withdraw the excess of four gross salaries, but due to law No. 31171, exceptionally, up to 100% of the savings can be withdrawn from your CTS until December 31 of this year. After that date, the restriction of withdrawing only the excess of four salaries will continue to apply.

How to invest my CTS?

1) Deposits in savings accounts

With these accounts, capital can always be kept available, being able to manage it in the best way.

2) Mutual funds

Here your money is invested in financial operations and is given according to the policy of the mutual fund that is chosen.

3) Fixed-term deposits in municipal savings banks

In these savings banks the interests are higher than those of the banks, and the deposit can be converted into guarantee of a loan; so you don’t spend your savings.

Which entities pay more interest for depositing my CTS?

The finance companies, savings banks and banks that offer the most interest for depositing CTS are the following:

Financial

Financial Proempresa has an annual effective yield rate (TREA) of 6.9%, while Financiera Credinka has a rate of 6.25%, being the highest within the financial sector.

Boxes

The Root box has an annual effective rate of return (TREA) of 6%. Meanwhile, the Prymera box offers a rate of 5.8% and the Sullana box offers 5.65%. They are considered the highest when it comes to boxes.

Banks

The banks of Comercio and Pichincha are those that present a higher yield than the CTS with 5%, and those that offer the least interest are Banco Falabella, Scotiabank, Banco de Crédito (BCP), Interbank and BBVA.

How can I transfer my CTS to another bank or financial institution?

The steps to follow are those:

• Send one transfer request from CTS to the employer.
• The employer informs the transfer of the worker’s CTS account to the previous entity and requests the transfer of funds to the new institution, all eight working days after the worker’s request is received.
• Finally, the bank or financial depositary of the CTS, within 15 business days, carry out the transfer to his replacement.