The Certificates of the Federation Treasury (CETES) are a debt instrument issued by the Federal Government, according to the Bank of Mexico (Banxico). That is, they are promissory notes that the government has to raise funds over a certain period of time and that generate returns for whoever invests in them. They have been issued since 1978 and represent an essential pillar in the development of the money market in the country.
According to Banxico’s description, these securities belong to the family of zero coupon bonds, that is, they are marketed at a discount below their nominal value (ten pesos), do not accrue interest and settle their value with yields on the maturity date. .
There are usually no deadlines, but the expiration date must coincide with a business day Thursday or another day that replaces it if it is not working. Historically, the minimum time for which they have been issued Cetes is within a minimum period of 7 days and a maximum of 728 days. Currently they are issued in terms of 28 and 91 days and a maximum of 6 months or a year.
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How does the cetesdirecto® platform work?
It is an online platform that is available for anyone to invest in Federation Treasury Certificates without intermediaries such as banks, brokerage houses or other financial institutions.
Through the site (https://www.cetesdirecto.com), you can access the securities and rates issued by the Bank of Mexico, the amounts are accessible and promise great returns. It should be clarified that the service has no cost or commissions.
Among the institutions that support the site are:
- Secretariat of Finance and Public Credit.
- Nacional Financiera, Development Bank.
- Bank of Mexico.
- National Baking and Stock Commission.
- National Commission for the Protection and Defense of Users of Financial Services.
It also offers benefits for its users, the ones that stand out are:
- Account opening in minutes and from the Internet.
- You can invest from $ 10 pesos to 10 million pesos.
- There are no commissions, penalties or transaction costs.
- Acquisition of the direct titles of the primary auction of Banxico.
- Disposition of resources when the user wishes without penalty.
- Support from government institutions.
In order to access cetesdirecto® it is necessary to be older than 18 years-old, be a resident of Mexico and have a bank account in the name of the interested party. In addition, the following information must be provided: CURP, RFC, domicile, interbank Clabe and beneficiaries in case of death, as well as the e. Signature issued by the Tax Administration System.
How to invest in CETES?
The Cetes are put on the market through auctions held by Banxico every business Tuesday. And each one has a value of ten pesos, so if 100 pesos are invested, 10 Cetes are being acquired, if they are 1000 pesos then they are 100 Cetes and so on.
The returns depend on the term for which the Cetes are acquired, According to Banxico, the remuneration rate changes every week according to the institution’s estimates and for July 10, 2019 it would be the following:
- 28 days, the annual rate is 8.17%
- 91 days, the annual rate is 8.18%
- 182 days, the rate is 8.17%
- 365 days, the rate is 8.16%
Anyone of legal age, Mexican or foreign, can request Cetes through banks, investment houses and online through Cetes Directo.
When investing, it is advisable to analyze the performance and that it is above inflation so that the investment has a profit.
Types of CETES
There are different types of Cetes that differ by the term for which they are acquired, which can be 28, 91,182 and 364 days. The characteristics of each one are explained below:
- Cetes at 28 days. They are characterized by being short-term and are generally only a savings option since they do not have high rates of return.
- 91-day cetes. Due to their high liquidity they are the most popular and are considered as the market reference rate.
- Cetes to 182 days. They are medium-term investment bonds, however they are not in great demand as they tend to have variations in liquidity performance.
- Cetes at 365 days. Most mutual funds and credit loans are based on these Cetes and, since they are for one year, they tend to have returns and lose little value.
Is it safe to invest in CETES?
According to some experts, Cetes can be a safe option to invest if it is the first time. Well, it is considered the least risky alternative, in addition to being backed by the Mexican government.
Some of the advantages of investing in Cetes is that as they are very low investment instruments, the risk is lower; Also the return on investment process is easy to understand and the rate of return is known from the beginning. On the other hand, if they are acquired through the Internet at Cetes Directo, you can direct debit what you are willing to pay and thus not have to worry about doing it personally.
However, there are some disadvantages such as that if inflation is greater than the rate of return, the gain is less or even zero. In the same way, it is to be considered that they can only be acquired without commissions through the Internet and only work as short-term savings methods.
Tips for investing in CETES
As mentioned, they are a safe option to invest, however there are some issues that must be taken into account.
- Assess that the rate of return is higher than inflation.
- Acquire them through the Internet or the app to avoid paying commissions and the profit is total.
- Compare the returns with each type of Cetes according to the liquidity of each person to check which is the one that will generate the highest returns.
- Consider what is a short term option and that if you want to have greater profits in 5 or 20 years, it is better to consider a Life Savings Insurance.
Finally, if you have doubts about making an investment, it is highly advisable to approach Finance experts to clear up doubts as well as request a plan with the fees and rates of returns.