What Bank Instruments Should I Choose?

Adequate term bank instruments allow establishing future plans with greater certainty, considering the investor's needs.

To increase wealth, savings accounts and investment funds are key. However, the most suitable term goals and investments should be considered, that is, the time planned to have the resources to achieve the objectives.

Therefore, the differences between investment and saving, investment terms, and when it is best to use them to meet goals should be explained.

Savings or investment: what is better?

Saving is focused on preserving capital, close goals, and quick access to money. However, the interest received is minimal and is related to the amount saved.

On the other hand, mutual funds generate higher returns, but their risks depend on market factors and the stock market. Also, you don't get the money right away. It is advisable to consult with professionals to know the benefits and risks for the good of the heritage.

Define the term of an investment for the goals

To properly use and understand how fixed, short, medium term note (MTN) and long-term note investments work, you have to set objectives according to the time you want to achieve.

Types of short-term investment

It is ideal to receive immediate liquidity or for goals in the near future. It has a horizon of three months or up to a year, and you can have the money before the established time without receiving penalties. Its performance is low, but it gives economic protection. It can be considered to buy a laptop in three months or repair the house in 6 months. It is advisable to create a savings account available 24 hours for emergencies.

Medium term note (MTN) investment types

It is ideal for future goals between 1 to 5 years. These medium term note (MTN) terms offer attractive rates, but you cannot have the resources for a while. An option to invest in mutual funds, since with a certain margin of risk more returns are generated. You can think of this kind of time frame to buy a car.

Types of fixed-term investment

To understand how fixed-term investments work, you must first define the amount and term to invest, liquidity, profitability, and security. Here you can decide whether the earnings are received on a monthly or quarterly basis. At the end of the pre-established period, you can have the initial money plus the interest earned.

By knowing the investment terms that exists in the market, it is easier to identify the most suitable depending on the objectives. For example, when investing in bank instruments, you can choose the term ranging from 1 to 182 days, receiving the investment and interest at the expiration of the period. Another option is the flexible plan to invest money in terms of 182 and 364 days with renewal or receiving the capital weekly or monthly. Finally, there are the CEDES that offer fixed rates with investment terms of 90 and 180 days, or variable rates with terms of 196 days.

The investment terms are adjusted to the needs, goals, and preferences of the investor, you just have to inform yourself and know the details of each one to receive the expected profits.