The Savings Battle: Cetes and Fintechs in Mexico
After several months of high-interest rates, Treasury Certificates, known as Cetes, have started to lose their appeal, currently yielding 9.95%, just shy of 10%. Meanwhile, fintechs are looking to attract more customers by offering rates that can go up to 15%, positioning themselves as a more competitive option for savings in Mexico. Read: The rise of Cetes benefits the government
The gap in yields between Cetes and fintechs is becoming more apparent. Over the past year, platforms like Mercado Pago, Nu, and Stori have adjusted their strategies to distinguish themselves from traditional options like Cetes. For instance, Mercado Pago has been offering an annual yield of 15% since July 2023, making it one of the most attractive options for this type of deposit. Nu, on the other hand, lowered its yield to 12.5% in November 2024, in line with movements in the Interbank Equilibrium Interest Rate. Stori, with its Cuenta+ and Inversión+ products, offers rates of up to 15.5% on one-year fixed-term deposits, although it has slightly reduced the rate for "on-demand" funds. In contrast, the Cetes Directo platform has tightened its policies: starting December 1, 2024, the minimum amount for recurring investments jumped from 100 to 300 pesos, and the minimum term increased from 28 to 90 days. This coincides with Cetes' yield dropping below 10% for the first time in months. Despite the widening yield gap between Cetes and alternatives like Mercado Pago and Stori, Nu has decided to keep pace with monetary policy. Mercado Pago reported a 35% increase in active users during the third quarter of 2024, reaching 56 million, although this also raised its operating costs, especially in credit and logistics. Despite these costs, the strategy strengthened its customer base in Latin America. "This fintech was a pioneer in offering returns to its users thanks to a partnership with GBM since 2020. Since January 2023, the rate has exceeded 10%, and in July of this year, it increased to 15% due to an extra benefit we provide to our millions of users," the company communicated to Expansión. In Nu's case, the high rates offered by its Cajitas in Mexico impacted its net interest margin, which fell by 140 basis points in the last quarter. However, this may have been worth it as they gained 1.2 million customers just in the third quarter of 2024 in our country. "The decrease in NIM this quarter was driven by three factors: first, the yields on the credit card portfolio fell due to lower risk from the products; second, loan yields dropped because the proportion of secured loans increased; and third, funding costs were affected by the growth in deposits in both Mexico and Colombia," the company detailed in its latest report. Monex forecasts that the Bank of Mexico will continue lowering its benchmark rate in 2025, with an end-of-year projection of 8%. This scenario could lead to adjustments in the rates offered by fintechs, as many set theirs based on Banxico’s rate. Despite being low-risk instruments, Cetes face the challenge of competing with the aggressiveness of fintechs. In 2024, its yield dropped from 11.29% in January to 9.90% in December, reflecting the downward trend in interest rates.
It is crucial for savers to stay informed about the different options available in the market. Although Cetes are considered a safe investment, the increasing rates offered by fintechs may represent a more attractive alternative for those looking to maximize their returns. Diversification will always be key when choosing where to place our money, and it’s advisable to carefully evaluate the risks and benefits of each option.
