The possibility of investing through the balance available in virtual wallet accounts has allowed millions of people in Argentina, for the first time in their lives, to make investments using financial tools other than fixed-term deposits.
Although they grant yields below inflation, the advantage of these accounts is that they allow the user an almost immediate availability of funds.
Bloomberg Línea surveyed the interest earned by three of the most popular virtual wallets -among those that allow the balance to be invested, such as MercadoPago, Ualá, and NaranjaX, to find out their profitability.
In all cases, rates equal to or higher than the 50% Annual Nominal Rate (ANR) were found.
#1 UALÁ
The fintech unicorn founded by Pierpaolo Barbieri, Ualá, allows users to place the percentage they want of their available account balance in a mutual fund.
However, the person has the possibility of withdrawing the invested capital at any time they want.
Based on September 16, 2022, the money invested in Ualá is granting users an ANR of around 54.3%. The same may vary from one day to another.
#2 MERCADOPAGO
The first app to grant yields to those who leave balance in the app was MercadoPago (MELI), which in September 2018 allied with Banco Industrial (BIND) to grant customers the possibility of having their money in an account placed in mutual funds.
Here, too, the client can have his money invested or not and withdraw it at any time. As of Friday, September 16, pesos (ARS) invested in the MercadoPago app were receiving an ANR of 50.7%.
#3 NARANJA X
Another Argentine fintech that allows investing money and has a high adoption rate is Naranja X, from Grupo Financiero Galicia (GGAL). This application has a remunerated account system.
“Just by having a balance in your account in Naranja X pesos, you generate daily returns,” the company’s official website details.
And it adds that “interest is received every day at midnight based on the money available in your account and the ANR offered. Even on weekends and holidays”.
As with Mercado Pago and Ualá, the money invested in Naranja X can be used anytime. The Naranja X interest-bearing account currently offers an ANR of 50%.
HOW TO CALCULATE THE INTEREST TO BE OBTAINED?
On its web page, Naranja X explains, with a very simple example, how to calculate how much money the user will get for using the remunerated account:
“Assuming that you have ARS 1,000 in your account and the ANR is 50%, the formula to calculate the daily remuneration is: (ANR/100/365) multiplied by the balance in the account.
“In this case, the remuneration obtained would be ARS 1.36. Formula: (50/100/365) x 1000 = ARS 1.36″.
Considering that the estimated inflation for 2022 is over 95% and that fixed-term deposits grant an ANR of 75% to retailers, the app would not seem to offer a very attractive yield.
However, they have the advantage that the user can withdraw the money whenever they want and is not obliged to freeze it for a minimum of 30 days, as is the case with time deposits in banks.
THE MICRO-INVESTMENT REVOLUTION IN APPS
A consulting firm Invecq report detailed that MercadoFondo, MercadoPago’s investment alternative, has already exceeded 5 million users nationwide. At the time of the fund’s launch in 2018, there were only 376,865 accounts in the country.
The total amount managed in MercadoFondo, which continues to grow steadily, today reaches 22% of the amount currently managed by traditional mutual funds. “This is mainly due to the incorporation of new users to the market,” said Santiago Bulat, director of Invecq.
With information from Bloomberg