Dollar savings account holders at banks are faced with a decision: is it better to leave the money idle or seek ways to obtain some returns? The 3% inflation in the United States, while diminishing purchasing power abroad, is only part of the problem. Last year, keeping dollars idle proved to be a bad business, with domestic price growth of 120%, a devaluation of 20%, and a real loss of value of 40% since 2015.
This year, a scenario is projected with domestic inflation of 24%, an aligned interest rate in pesos, and an increase in the financial dollar of 12%. The controversy in the markets about what to do with dollars intensifies, irritating President Javier Milei when doubts are spread among the population. The total amount of dollar deposits in private hands is around US$ 16.915 billion according to estimates.
Savers are torn between keeping dollars in their savings accounts, even with monthly fees, or seeking alternatives that generate profits. Some options include opening fixed-term deposits in dollars, interest-bearing accounts in foreign currency offered by non-banking entities, or buying sovereign bonds or Negotiable Obligations to gain returns.
Some private banking entities offer annual rates of 4% for fixed-term deposits in dollars, while several companies allow opening interest-bearing accounts in dollars with daily interest and automatic activation upon depositing dollars. Diversifying investments towards financial or stock market assets is also presented as an alternative to minimize losses due to the exchange rate gap.
Financial advisors recommend assessing the investment horizon, as having a long-term perspective is not the same as having a short-term one. Leaving part of the balance in the savings account for immediate needs and closely monitoring the evolution of investments in dollars are recommended practices, while financial speculation remains a less explored option by the general public. Uncertainty and the memory of previous economic crises influence the caution in financial decisions of many investors.
