Certificates of Deposit are Attractive Savings Vehicles

Julio Herrera Velutini comes from a family that has a 150-year history of banking in Venezuela. Because of his experience and influence in the industry, Julio M. Herrera Velutini is knowledgeable about the benefits of savings-related products. One of these popular offerings is a certificate of deposit.

Certificates of deposits, or CDs, are a popular savings product among banking customers worldwide. You can obtain CDs at branches as well as through digital means. The savings certificates are issued in one of various denominations for a fixed term. Generally, the terms for the savings certificates can be for a period as short as one month or as long as five years.

In Venezuela, the country’s currency is the standard used for obtaining CDs. Therefore, certificates of deposit are available in the country’s currency, or in the Venezuelan Bolivar fuerte, known by its acronym as a VEF. Maturities, then, are far shorter than they typically are for CDs that are offered via international banks, and range from two to three weeks, or for a period of 14 to 28 days.

The interest that is earned on the time deposit accounts in Venezuela is contingent on the market, and therefore the interest is set accordingly. The yield that banks in Venezuela and other countries receive for CDs is a major source of revenue for the institutions. Therefore, lowering the interest on the accounts can hurt a bank economically.


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