Fixed Term Deposits: why is it the best savings option despite the current situation?

In a economy Subject to different social factors, both local and international, low-risk financial instruments are increasingly in demand. The Fixed Term Deposit (DPF) is one of the safest ways for money to generate the best profits. “This product allows you to not worry when there are complicated contexts and guarantees an interesting return on investment”explains Ricardo Kanna, manager of Products and Means of Payment at Banco Pichincha.

how does a Fixed deposit? Earnings depend on the amount to be deposited and the time period of the contract. Rates are set in advance and profitability will depend on time; the longer the money is in the bank, the better.

Another characteristic to take into account is that the money deposited will not be available during the period of time agreed with the entity. However, it is possible to pay penalties that have been provided in the contract, in order to make a partial or total withdrawal before the date.

”With other financial instruments, although the profit rates –on paper– may be larger and withdrawals can be made at any time, there is also the risk that minimal profits will be generated if a crisis context occurs. ”, details Kanna from Pichincha. A clear example of this was the arrival of the pandemic, a situation that caused many investments to end up generating losses for their clients, as happened with the AFPs.

Why is it the best savings option despite the current situation?

• Because it provides an invariable investment growth rate, which does not depend on the changing situation and its ups and downs.
• The percentage of interest offered by the financial institution It depends on the amount that is deposited and the withdrawal period that is agreed. Thus, the higher amounts and terms, the better rates.
• This investment proposal is ideal for large investments in medium and long-term plans, such as the first car, a property, or study plans.

Which entities offer the best interest rates?

In the Peruvian market, there are various financial entities that offer Fixed Term Depositsattention should be paid to the campaigns that are the ones that offer the best Annual Effective Rates of Return (TREA).

For example, there is Caja Piura, which offers a rate of 9.25% for a term of 1,080 days for savings from S/500. ANDThis promotion will be available until March 31, 2023 or until the entity reaches its recruitment goal.

Then there is Caja Huancayo, which offers 8.75% of the TREA for deposits from S/500 to 720 days.

Banco Pichincha also stands out, which offers one of the highest rates with up to 8.25%. The opening of a DPF in this bank can be done with a minimum balance of S/500 and you can choose a term that goes from 30 to 1,080 days.