Time deposits (CDB, CDT, plazo fijo, pagaré)
Low riskWhat it is
You lend money to a bank for a fixed period in exchange for a fixed (or sometimes inflation-linked) rate, usually higher than a plain savings account. Known as CDB in Brazil, CDT in Colombia, plazo fijo in Argentina and pagaré/depósito a plazo in Mexico.
How to buy it
Open one directly through your bank's app, or via a broker that offers third-party CDBs/CDTs (often at better rates than your own bank). Choose the term carefully — withdrawing early can mean losing part of the return, or isn't allowed at all.
Pros
- Higher rate than a savings account for the same low risk
- Usually covered by deposit insurance up to the local limit
- Predictable, fixed return if held to maturity
Cons
- Money is locked for the chosen term
- Early withdrawal often penalized or disallowed
- Deposit insurance has a cap — large sums may exceed it at one bank
A worked example
A 12-month CDT at, say, a rate a few points above inflation turns a fixed sum into a known, larger sum a year later — the tradeoff is that the money is unavailable if an emergency comes up before the term ends, which is exactly why the emergency fund comes first.