Investing in Financial Certificates: Capitalizable or credit on account?

Within the context of investments there are different options that you can access. One of the most basic is that of financial certificates, which allow you to start investing and receive benefits immediately. That is why today I present to you the way you can determine the type of certificate that meets your financial needs.

Understanding the financial certificate

Understanding the financial certificate

The financial certificate is an investment title in which the bank allows you to lend it money to put it to produce for you; and it has two modalities or types:

Capitalization

bank

These two state modalities that you can choose to receive your benefits month by month (Credit on account) or that each time a benefit is generated, it becomes part of the capital and that is recalculated in that new amount that was generated (capitalization).

Here is an example of how a PDO 100,000 investment would behave for 5 years at an annual rate of 6.5%.

Investment

Investment

In this example the capitalization would get 4.36% above the credit on account. This on the basis that you cannot touch the credit money on the account you have the certificate. Otherwise, your total at the end of the 5 years would be the same PDO 100,000.

How to determine which mode suits me best?

How to determine which mode suits me best?

Starting from the investment options you have, the natural question that arises is how to know which one to choose? To answer this question, you first have to identify your investment objectives, so you know if you are looking to swell your money or if you want to manage liquidity.

This means that if you are looking for, for example, to have a fixed income every month to pay, say the school, it is convenient to pay interest on account.

Know how much you would earn with the credit option on your certificate depending on the bank and the amount you choose.

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