CETES

The Paseo de la Reforma skyline in Mexico City, with the mountains behind it — Photo: Ciudad.de.Mexico.City.Distrito.Federal.DF.Paseo.Reforma.Skyline.jpg — Alejandro Islas Photograph AC, CC BY 2.0

Definition

Certificados de la Tesorería — short-term, zero-coupon bonds issued by the Mexican federal government, sold at a discount and redeemed at face value. Terms typically range from 28 to 364 days.

Why it matters

The single most common first investment for a Mexican beginner, bought directly at cetesdirecto.com from around 100 pesos.

How it works in practice

There is no coupon payment. You pay less than the face value and receive the full face value at maturity — the gap is your return. The government places them through a weekly auction, and cetesdirecto (operated by Nacional Financiera on behalf of the federal government) lets an individual take part with very small amounts, with no purchase commission. Standard terms are roughly 28, 91, 182 and 364 days. You can set the platform to reinvest automatically at maturity, or have the money returned to the bank account registered in your name.

A concrete example

Suppose a 28-day CETE is placed at an annualised rate of 10%. You pay roughly 99.24 pesos for every 100 pesos of face value and receive 100 pesos 28 days later — about 0.76 pesos of gross return per 100 invested, before tax. Multiply by roughly thirteen 28-day cycles a year and you get back to the ~10% annual headline. The figures here are illustrative; the actual rate is set at each auction.

What people most often get wrong

The advertised rate is annualised — a 28-day CETE at 10% pays roughly a thirteenth of that over its actual term, not 10% in a month. Tax is withheld on the nominal return, not the real one, so in a high-inflation year a CETE can leave you with less purchasing power than you started with even though the peso balance went up.

Frequently asked questions

Can I sell CETES before maturity?

Yes — cetesdirecto allows an early sale, but at the going market price rather than at what you paid. If rates have risen since you bought, that price can be lower than your purchase price. Holding to maturity is what makes the return predictable.

What does it cost to buy CETES?

Buying through cetesdirecto carries no purchase commission and no minimum balance — the platform is run for the government itself. Buying government paper through a private broker instead may carry brokerage or custody charges, so compare before assuming they are equivalent.

Educational content only — not financial or tax advice. Rates, limits and tax rules change: confirm current figures with the regulator or tax authority before deciding.