Saturday, December 03, 2022

UVA Fixed Term: how much is the strategy of a specialist making a “carousel” of deposits that pays the yield every month

UVA Fixed Term: how much is the strategy of a specialist making a "carousel" of deposits that pays the yield every month

Banks Are Obliged To Offer Uva Fixed Terms Cancelable At 1% Per Annum To Individuals (Adrian Eskander)
Banks are obliged to offer UVA fixed terms cancelable at 1% per annum to individuals (Adrian Eskander)

loss fixed time frame Growth adjusted for inflation until stabilizing below $400,000 million to accumulate 135% increase so far this year. The surge in these placements coincided with the acceleration of inflation, which, at the start of the first quarter, surprised with monthly data well above private estimates and made hedging against prices an option that became increasingly desirable in times of uncertainty. Is.

Peak in August, in growth Fixed Installments UVA -The index designed to accommodate mortgage loans- stabilized after a strong cycle of raising rates by the Central Bank in a very short period, leading to traditional fixed term up to 30 days with your performance 75% annual nominal and 107.50% annual cash.

fixed conditions UVA They have a minimum period of 90 days to pay inflation adjustments. This is the main drawback of the instrument in the eyes of savers accustomed to the one-month tenor of the traditional fixed term. However, after months when inflation expectations were systematically below the records that were finally verified, there are still arguments for choosing the UVA fixed term over the traditional one or supplement.

There is no single type of UVA fixed duration. are pre-cancellable, which allow individuals to pay inflation plus 1% by regulation of the central bank and, in the event that the saver decides to withdraw his deposit before completing 90 days – something called To be avoided-, they pay at the rate of 71 percent per annum instead of adjusting for inflation. On the other hand, dry UVA fixed terms which pay 0.25% per annum and which cannot be canceled before the agreed period. There is no point in choosing the latter (lower rate, less flexibility).

First, taking the financial analyst salvador distefano It was suggested months ago for the retail saver to take full advantage of the equipment in a friendly manner and reduce the problem of very long term.

For example, Started with an investment of $300,000 and described the following steps,

1) Install pre-cancellable UVA fixed duration in 90 days $100,000. of

2) Create another UVA fixed duration up to 120 days $100,000

3) Finally, create a third UVA fixed term up to 150 days $100,000

“It is true that we have no expiration during the first 89 days, but, As of day 90, the first fixed period begins to expire, which we will renew in 90 days”, he explained on his personal website.

Growth In Uva Fixed Deposit Stocks Halted Due To Hike In Rates Suffered By Traditional Fixed Deposits
Growth in UVA Fixed Deposit stocks halted due to hike in rates suffered by traditional fixed deposits

,The second fixed period expires on the 120th day, which we will also renew in 90 days”, he elaborated and added: “Finally, on day 150, the third fixed period expires, which we will renew in 90 days.,

“That’s how we put together a happy round every 30 days, ending a certain period, adjusted for inflation, with the accumulated inflation of the agreed period. If we capitalize the interest it gives us an inflation rate. You will get a higher rate.” To redeem interest, in jargon, is to reinvest both the initial capital—in this case $100,000 of each deposit amount—and the interest earned at each maturity.

If Di Stefano’s calculations are updated to today’s market prices, with the expected inflation rate for The top-10 best forecasters of the Central Bank’s latest survey of Market Expectations forecast 100.30% over the next 12 months, indicating a quarterly inflation rate of 25.07%. If you calculate the interest, you will get a return of more than 128 percent in a year,

For the financial advisor, the interesting thing about the “carousel” is that after the completion of the first 90-day period, the saver will have maturity every 30 days. In the first phase, you will get interest equal to 90 days, 120 days and 150 days of accumulated inflation and from the fourth month, interest equal to 90 days of inflation. And to all this we have to add the 1% rate that the Central Bank needs to offer the banks.

One thing to note is that banks do not promote the specific conditions of UVA at all. Although they are obliged to offer them, and to make them available at the same time as the traditional fixed term in their home banking, they are not convenient deposits for entities: someone lending that money on UVA adjustments. No, nobody takes that credit in terms of current inflation. They only provide them to individuals, not companies, by the regulation of the Central Bank.

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