06 – Basic Savings Instruments: How to Make the Most of Them

Instrumentos básicos de ahorro

Contents

06 – Basic Savings Instruments: How to Make the Most of Them

In this lesson, we'll cover all the basic investment instruments. You're probably familiar with them, but we'll go into more detail so you can fully understand them: savings accounts, fixed-term deposits, checking accounts, and interest-bearing accounts. Let's take a look at them!

Course index:

  1. Basic Concepts of Money and Personal Finance
    Introduction to the value of money, the importance of saving, and spending control.
  2. Budgeting and Financial Planning
    Create a personal budget, manage income and expenses, and set financial goals.
  3. Inflation and Purchasing Power
    Explanation of how inflation affects the value of money over time.
  4. Interest Rates and Time in Finance
    Differences between simple and compound interest rates and their importance in investments.
  5. How to defend your savings
    How to protect your money from the scams that abound today.
  6. Basic Savings Instruments <<<<<<<<<<<
    Explanation of savings accounts, term deposits, and how they work.
  7. Introduction to the Stock Market
    Basic concepts of the stock market and its role in the global economy.
  8. Actions: What They Are and How They Work
    Explanation of stocks, types (common and preferred), and how to invest in them.
  9. Bonds: What They Are and How They Work
    Differences between corporate and government bonds, and their importance in diversification.
  10. Risk vs. Return on Investments
    Concept of risk and how it affects investment choices.
  11. Diversification and Creation of Basic Portfolios
    Basic diversification principles to reduce risk in an investment portfolio.
  12. What is an ETF and How Does it Work?
    Introduction to ETFs (exchange-traded funds) and how they track market indices.
  13. Introduction to Mutual Funds
    An explanation of mutual funds and their benefits for beginners.
  14. Financial education for the family.
  15. Economic Cycle and its Impact on Investments
    How the stages of expansion and contraction in the economy affect investments.
  16. Growth Stocks vs. Value Stocks
    Differences between these types of actions and when each is appropriate.
  17. Fundamental Analysis of Stocks
    Explanation of how to analyze a company's value based on its fundamentals.
  18. Basic Technical Analysis: Charts and Patterns
    Introduction to basic technical analysis tools, such as trend lines and candlestick patterns.
  19. Options: What They Are and How They Work
    Basic concepts of call and put options and their uses in investments.
  20. Futures: What They Are and How They Work
    Introduction to futures contracts and their application in investment and speculation.
  21. Introduction to Cryptocurrencies
    What is digital money, how it was created, and the characteristics of Bitcoin and other cryptocurrencies.
  22. Blockchain and its Importance in Finance
    How the technology behind cryptocurrencies works and their applications in finance.
  23. Risks in Cryptocurrency Trading
    Volatility, fraud, and regulations in the cryptocurrency market.
  24. Leverage Principles and its Risk
    What it means to trade with leverage and the associated risks.
  25. Investor Psychology and Emotion Management
    How emotions influence investment decisions and tips for managing them.
  26. What is Algorithmic Trading
    Basic explanation of the use of algorithms to perform operations in the financial market.
  27. Financial Analysis of Companies
    Introduction to basic financial statements and their interpretation for valuing companies.
  28. Investing in Commodities: Gold, Oil, and Other Goods
    How commodity investments work and their role in diversification.
  29. Advanced Investment Strategies: Hedging and Derivatives
    Introduction to strategies for managing risks through financial derivatives.
  30. Creating and Managing a Complete Portfolio
    Practical application of prior knowledge to build and manage a diversified portfolio.

Basic savings instruments in Argentina: Savings accounts, current accounts, remunerated accounts, and fixed-term deposits

Saving is one of the fundamental keys to maintaining financial stability and achieving economic goals. In Argentina, there are various savings instruments that allow you to safeguard your money and, in some cases, generate returns. Among the most common are: savings bank, the current account, he traditional fixed term and the UVA fixed termIn this article, we'll take an in-depth look at each of these options, their advantages and disadvantages, and which one might be the best choice based on each individual's needs.

1. Savings bank

The savings bank It is the most basic and common option for managing money in a bank. It is a bank account in which you can make deposits, withdrawals and transfers, generally without maintenance costs.

Advantages of the savings bank

  • FreeIn Argentina, banks must offer a basic savings account with no opening or maintenance fees.
  • Ease of access: It can be operated from ATMs, home banking or banking apps.
  • Security: Allows you to keep your money in the bank instead of handling cash.
  • Allows you to receive payments: You can receive transfers, salary credits, and payments from clients.

Disadvantages of the savings bank

  • Does not generate interest: Deposited money does not produce returns, so it loses value against inflation.
  • Extraction limitsSome savings accounts may have restrictions on daily ATM withdrawal amounts.
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2. Current account

The current account It is a bank account that, in addition to allowing the same operations as a savings account, offers the possibility of issue checks and have a bank overdraft, that is, the possibility of spending more money than you have deposited (with prior agreement with the bank).

Advantages of the current account

  • Commercial use: Ideal for companies and professionals who need to issue checks.
  • Access to overdrafts: Allows access to additional funds through an overdraft limit pre-agreed with the bank.
  • Greater flexibility: It does not usually have strict limits on withdrawals or transfers like a savings account.

Disadvantages of the current account

  • Maintenance costUnlike a savings account, it usually has associated monthly costs.
  • Additional expenses: Checks issued can incur fees, and overdraft interest is often high.
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3. Traditional fixed term

He traditional fixed term It is one of the most widely used tools by Argentine savers seeking a secure return on their money. It consists of deposit an amount of money in the bank for a certain period of time, in exchange for a fixed interest rate.

How the traditional fixed term works

  • A minimum amount is deposited in the bank (the minimum is usually $1,000 or more depending on the bank).
  • A period is chosen (generally, a minimum of 30 days).
  • At maturity, the bank returns the invested capital along with the interest generated.

Advantages of the traditional fixed term

  • Safe investment: The capital is protected, and the interest rate is fixed and guaranteed.
  • Easy to operate: It can be set up from home banking in just a few minutes.
  • Availability of options in pesos and dollars: A fixed term deposit can be made in local or foreign currency.

Disadvantages of traditional fixed-term deposits

  • Cannot be withdrawn before maturity: During the agreed term, the money remains immobilized.
  • Fixed returnIn high inflation contexts, the rate may fall below the price increase.
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4. UVA fixed term

He UVA fixed term It is a variant of the traditional fixed term that adjusts its capital according to the evolution of inflation, through the Purchasing Power Units (UVA).

How the UVA fixed-term deposit works

  • The money is deposited in the bank and becomes Grapes, which are updated daily according to inflation measured by INDEC.
  • The minimum term is 90 days.
  • At maturity, the bank returns the capital adjusted for inflation plus additional interest.

Advantages of the UVA fixed term

  • Inflation protection: Capital is updated according to inflation, avoiding the loss of purchasing power.
  • Superior performance in periods of high inflation.

Disadvantages of the UVA fixed term

  • Minimum period of 90 days: It is not convenient if quick liquidity is needed.
  • Not always available at all banks.

5. Paid accounts

The paid accounts They are an intermediate option between a savings account and a fixed-term deposit, since they allow you to access your money at any time while generating interest.

How paid accounts work

  • They are similar to a savings account, but the deposited balance generates daily or monthly interest.
  • They do not have a fixed term, so the money can be withdrawn at any time without penalty.
  • Some offer variable rates that adjust based on market conditions.

Advantages of remunerated accounts

  • Immediate liquidity: You can withdraw the money at any time without losing the interest generated.
  • Interest generationUnlike a traditional savings account, the deposited balance produces a return.
  • Simple operation: They can be opened and managed from home banking or mobile applications.

Disadvantages of remunerated accounts

  • Variable interest rates: Performance may change depending on bank policy and market conditions.
  • They do not always exceed inflation: In periods of high inflation, the interest generated may not be sufficient to maintain purchasing power.

What is the best option to save?

The choice of the best savings instrument depends on each person's profile and needs:

  • For everyday use: The savings bank It may be the best option if you find it very difficult to transfer funds from an interest-bearing account to a savings account when necessary, and for some reason, only debit cards are accepted. The reality is that my recommendation is to keep that account practically empty, at least until banks realize that people have become aware of the advantages of interest-bearing accounts.
  • For businesses or companies: The current account This is what they typically use to issue checks or access an overdraft. However, due to their extremely high costs, it's ultimately best to avoid checks and checking accounts.
  • For short-term savings (30-60 days): He traditional fixed term It can be a good option if the interest rate exceeds inflation (Spoiler alert: historically, this was NOT the case in the 90% of time).
  • For medium/long-term savings (more than 90 days): He UVA fixed term It is usually the best alternative in inflationary contexts.
  • For a flexible, interest-based option: The paid accounts They're a good alternative if you want to generate returns without losing liquidity. If you need to withdraw cash, you can transfer it immediately to a savings account. A very effective option for managing your day-to-day funds.
  • Stocks, bonds, cryptocurrencies, options and other advanced instruments will be analyzed in future lessons of this course.

Conclusion

In an economic climate like Argentina's, choosing where to save your money wisely is crucial. Each savings instrument has its advantages and disadvantages, so it's important to evaluate which one best suits your personal needs.

Next course date

March 26, 2025. You will be able to access it with this link.

Questions for you to reflect on

Why is it so harmful to leave my salary in a savings account for the entire month?

Is a fixed-term deposit always a bad idea?

Why do I need to use basic savings instruments properly?

A brief overview of The Pocket Investor

The Pocket Investor is a project that combines experience and passion for financial education to help you transform your relationship with money. Through personalized mentoringWe help you design investment strategies tailored to your goals and needs, optimizing your portfolio to address challenges like inflation and the dollar.

The books on finance and investment, including the popular The Argentine Pocket Investor - El Inversor de Bolsillo argentino, are practical tools that explain complex concepts in a simple way, bringing the world of investments closer to anyone interested in financial growth.

In addition, in the course The Pocket InvestorWe combine all this knowledge to offer you a complete experience: theory, practice, and strategies that truly work in the Argentine and global context. All this with a clear, friendly, and accessible approach, so you can achieve financial independence.

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