The Fixed Term Deposit, Increasingly Questioned: Everything You Need to Know About This Tool

The traditional fixed term deposit remains one of the most well-known alternatives for those looking to invest their savings and obtain a return in a safe and simple way. During August, the differences in rates offered by banks once again highlighted a fundamental issue: not all institutions pay the same for the same type of deposit.

In this scenario, before establishing a deposit, it is not enough to look at what the bank where a person already has an account offers. It is also advisable to review the market, observe the Annual Nominal Rate (TNA), understand the cancellation conditions, and be clear about how long the money can be set aside.

What is a fixed term deposit and how does it work?

A fixed term deposit is a transaction through which a person deposits a certain amount of money in a financial institution for a set period. In exchange for keeping those funds immobilized until maturity, the bank pays interest.

The mechanism is simple: the saver chooses how much money they want to place and for how long. Once the transaction is confirmed, they receive a specific rate for that deposit. Upon reaching the maturity date, they recover the original capital plus the corresponding interest.

The main characteristic of the instrument is, precisely, the immobilization. Once a traditional fixed term deposit is established, the money cannot be withdrawn before the maturity date. Therefore, the first question a person should ask themselves before investing is not how much the bank pays, but if they will need that money during the chosen period.

On the other hand, the TNA is the indicator used by institutions to express the annual return of the operation. However, a TNA of 20%, for example, does not mean that a 30-day deposit will generate a 20% profit. To calculate the return for a short period, one must consider the number of days the money remains deposited.

Is the fixed term deposit right for me?

Before choosing this investment tool, it is essential to review a couple of central points. The convenience of the fixed term deposit depends mainly on the saver's objective. It is not the same to invest money that will be needed within a month as it is to reserve funds for a period of several months.

One of the main attractions of the fixed term deposit is its predictability. When the deposit is established, the saver knows the rate corresponding to that operation and understands that if they keep the money until maturity, they will receive the capital plus the agreed interest. This differentiates it from alternatives whose returns can change daily.

The downside is the lack of liquidity. The money is committed during the agreed term, and therefore, it is not recommended to allocate funds for this investment that are intended for daily expenses, rent, services, installments, or any other commitment that may arise before maturity.

It is also important to consider inflation. A positive rate does not necessarily mean that the saver has gained purchasing power. To determine the real return, it is necessary to compare the profitability obtained with the evolution of prices during the same period. If inflation exceeds the return on the deposit, the capital increases but loses purchasing capacity.

The rates offered by the main banks

The data collected for online deposits for 30 days show significant differences among the main institutions. For customers, the nominal annual rates are as follows:

• Banco Provincia: 19.50%
• Banco Nación: 19%
• Banco Macro: 18.50%
• BBVA: 18.25%
• ICBC: 17.70%
• Banco Galicia: 17.50%
• Banco Credicoop: 17.50%
• Banco Ciudad: 17%
• Banco Santander: 16%
• Banco Patagonia: 16%

The fixed term deposit still has a concrete advantage: it allows knowing in advance the conditions of the deposit, how much will be earned, and keeps the money out of the spending circuit for a while. But that predictability comes at a cost: the lack of liquidity and the possibility that a more profitable alternative may appear while the money remains immobilized.

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