This Friday the 31st the deadline to withdraw 100% of the CTS expires

After eight months of the possibility of withdrawing up to 100% of the Compensation for Time of Services (CTS), this Friday, December 31, the deadline to have this fund that supports formal workers expires.

It should be remembered that with Law 31171, approved at the insistence by the Congress of the Republic last March, it was provided that 4 million workers can access all of their funds, a measure that came into force since May 5 after the regulation of the Ministry of Labor and Employment Promotion (MTPE).

However, after this period of free disposal; that is, as of January 1, 2022, workers may withdraw only the excess of six gross salaries, or in the event of resignation, dismissal or retirement.

¿Remove the no?

Specialists consulted by this newspaper agreed that the first recommendation is not to withdraw the CTS, since its main function is to be a contingency fund in case of unemployment.

“In the first place, the CTS is something like unemployment insurance, whoever has CTS is because they are working. And while the economic situation has affected everyone, the first recommendation is not to withdraw. And if they withdraw it, it must be for emergencies or expenses to be covered urgently, if not, it does not merit for consumption or for the purchase of goods, “he said. Arturo Garcia, Professor of Finance at ESAN.

For its part, Jorge Luis Ojeda placeholder image, a professor at the EPE Business School of the UPC, emphasized that the CTS is deposited in special accounts that have higher rates than others in the financial system. “It is way above that a fixed-term deposit. Taking the money out of an account that is paying you 6%, for example, to transfer it to an account that is going to pay you 2% to 3% is not a good business to say, “he said.

Alternatives to invest

However, if the worker has already decided to withdraw this money, the specialists provided investment alternatives to give them a better return on their savings.

Garcia pointed out that one option is to invest in mutual funds, which could start with a conservative or moderate fund. He explained that the longer the term, the higher the yield, so he recommended investing in at least 1 to 3 years. “The returns are variable, it depends on the type of fund, a conservative one can give from 4% to 5% per year, and a fund with a higher yield can even yield up to 10% ”, he said.

Regarding alternatives in the financial system, he recalled that although the type of CTS account gives greater profitability, if the user wants to transfer their savings to another type of account, a good choice is to deposit it in microfinance institutions, which have higher rates than banks .

Meanwhile, Ojeda pointed out that another option is to resort to non-pension funds from the AFP, whose annual returns are generally between 7% and 8%, although it will depend on the type of fund. In these savings you can make up to 2 or 3 withdrawals a year.

What steps to follow to request withdrawal?

The worker can approach the financial institution in which he has his CTS account, be it a bank or a microfinance institution, to request the total or partial withdrawal of his savings, including the interest generated to date.

You can also use the digital channel. In this option, the user requests the financial institution to make the disbursement, by transfer, to the account indicated by the worker. This must be completed within a maximum period of two business days.

Or in some banks the option of immediate transfer from the CTS account to another account of the worker in the same bank is enabled. This can be done from the mobile applications of financial institutions.

The data

Fintech. Regarding the possibility of investing in fintech, the specialists suggested to be cautious, since these digital platforms are not yet regulated by the SBSThey also do not have a deposit insurance fund like banks and microfinance institutions. However, they indicated that it is an option for credits.