Fixed-term deposits lose to inflation: what investment alternatives do savers have?

Fixed-term deposits in Argentina are currently failing to keep pace with inflation, diminishing the real value of savers' capital. Historically a simple and accessible investment, these deposits now offer returns that are significantly lower than the country's high inflation rate, forcing individuals to seek alternative strategies.

“

Currently, Argentina is going through a period where inflation is exceeding interest rates.

Analysts Sergio González and Martín Mejía from Cohen Aliados Financieros explained that Argentina is experiencing a period where inflation outpaces interest rates. For rates to become positive again, either inflation must decelerate faster than interest rate cuts, or rates must catch up to inflation. They noted that this phenomenon was observed in 2024 when inflation slowed, allowing rates to turn positive.

“

Faced with current inflation levels, a traditional fixed-term deposit yields below inflation and consequently slowly deteriorates the purchasing power of savings.

The average annual nominal rate (TNA) for fixed-term deposits, as calculated by the Central Bank (BCRA), hovers between 21% and 22%. This translates to a monthly effective rate (TEM) of approximately 1.95%. However, with current inflation levels, this return falls short of covering price increases, leading to a gradual erosion of purchasing power. Projections for June's inflation stand at 2.1% for the month, with an estimated annual inflation of 30.5% for 2026, further highlighting the inadequacy of traditional fixed-term deposit yields.

“

Those who choose this option are already losing in real terms.

Given this scenario, financial experts recommend alternatives for conservative investors prioritizing real returns and liquidity. Financial analyst Christian Buteler suggests UVA fixed-term deposits, which are indexed to inflation, ensuring capital grows in line with price increases. However, he cautions that these require funds to be immobilized for at least 90 days, and sometimes up to 180 days, depending on the bank.

“

It is advisable to use UVA fixed-term deposits, as this is an investment instrument that adjusts according to the inflation index, so the capital grows in the same proportion as the price increase.