Compare what you keep, not the rate they advertise.
Look at what you keep in effective annual terms after taxes and inflation, when you can take your money out, and what risk you take on. Try it with your numbers:
Interest that reaches you
864,000 pesos
At the end of the term you have 10,864,000 pesos
- Interest over the term
- 900,000 pesos
- Withholding at source (4% of the interest)
- − 36,000 pesos
- Net rate
- 8.64% E.A.
- Real rate: how much more you can buy
- 3.47%
On your income tax return, part of the interest may not be taxable (the inflation component). Your accountant can tell you how much applies to you.
What a CDT is
A certificado de depósito a término, Colombia's term deposit. You hand your money to a financial institution for a fixed term, say 90, 180 or 360 days, and at the end it pays it back with a rate agreed on day one.
If the institution is registered with Fogafín, the CDT has deposit insurance: up to 50,000,000 pesos per person and per institution if the institution were to be liquidated.
The five questions to compare
Ask every option the same five questions, in the same order. A high rate on its own doesn't tell you which one suits you.
- 1
What does it pay in effective annual terms?
Rates are published in many forms: nominal monthly, quarterly in advance, monthly. Turn them all into effective annual before comparing; otherwise you're comparing figures that don't measure the same thing.
Convert rates with the EAR calculator - 2
What do you keep after taxes?
4% of a CDT's interest is withheld at source; the principal isn't touched. Moving money can cost the 4-per-thousand transaction tax. Other options have other rules, so compare what reaches you, not what's advertised.
- 3
Does it beat inflation?
What matters is how much more you can buy. The real rate is (1 + net effective rate) ÷ (1 + inflation) − 1. If it comes out negative, your money grew in pesos but buys less than before.
Convert rates with the EAR calculator - 4
When can you take your money out?
As a rule, a CDT can't be cancelled before it matures. A savings account gives you the money today. A fund depends on its rules, and a private project usually runs for several years.
- 5
What risk do you take on, and who answers for it?
In a CDT the rate is agreed; the risk is that the institution can't pay, and deposit insurance covers that up to the cap. In options with variable results, what you get depends on the market or the project, and can be more, less or nothing.
A CDT next to other options
The same four questions for each one, so you can compare them at a glance.
Savings account
- How it earns
- A variable interest rate on your balance. Some digital accounts pay more than traditional ones.
- When you can take your money out
- Whenever you want.
- What risk you take on
- The institution can lower the rate at any time.
- What backs it
- Fogafín deposit insurance, up to the cap, if the institution is registered.
CDT
- How it earns
- A fixed rate, agreed the day you open it.
- When you can take your money out
- When it matures.
- What risk you take on
- If inflation rises, your real rate falls. The rate doesn't adjust.
- What backs it
- Fogafín deposit insurance, up to the cap, if the institution is registered.
Collective investment fund
- How it earns
- Whatever the fund's assets earn, which changes every day.
- When you can take your money out
- Depending on its rules: on demand or after a minimum holding period.
- What risk you take on
- The value of your stake can fall.
- What backs it
- Managed by a company supervised by the Superintendencia Financiera. No deposit insurance.
A stake in a private project
- How it earns
- A share of the project's results: the energy it sells or the rent it collects.
- When you can take your money out
- At the end of the project's term, usually several years.
- What risk you take on
- Results depend on how the project performs and can be higher, lower or not happen.
- What backs it
- A private contract and the project's assets. No deposit insurance; review each project's details and structure.
When each one makes sense
There's no best one for everyone. It depends on when you need the money and how much variation you accept.
You have a date
Tuition, a trip or a down payment within a year: a CDT for the same term tells you today how much you'll have that day.
It's your emergency fund
It's better in an account you can use tomorrow. A CDT makes you wait until it matures.
Your horizon is several years
If you accept that the result can vary, compare options with variable results too. Spreading your money across several avoids depending on just one.
You want something you can see
A private project lets you know what your money is in, in exchange for long terms and results that depend on the project.
Frequently asked questions
How much is withheld from a CDT?
Usually 4% of the interest, as withholding at source. It's taken when the interest is paid and doesn't touch the principal. What's withheld counts toward your income tax.
Is a CDT insured?
Yes, if it's issued by an institution registered with Fogafín: deposit insurance covers up to 50,000,000 pesos per person and per institution, adding up your accounts and CDTs there, if it were to be liquidated.
Can I take my money out of a CDT before it matures?
As a rule, no: a CDT pays out at the end of its term. Some dematerialized CDTs can be sold to someone else on the secondary market, at a price that may be lower.
How do I compare a CDT with a monthly rate?
Turn both into effective annual rates. 0.8% a month is 10.03% effective annual, so it isn't the same as a CDT at 9.6% effective annual, even though 0.8 × 12 is 9.6.
Projects you can take part in
If you want to look at options other than a CDT, these are the private projects published today. Read each page with this guide's same five questions.
Project in Construction
Project in Structuring
Project in Structuring
Project in Operation
Project in Structuring
Project in ExplorationCasa Lago
La Pintada, Colombia
This project is currently under study. We will notify you when it becomes available for participation.
Keep going
- EAR calculatorTurn any nominal or monthly rate into an effective annual one, and see its real rate.
- Solar Subway - La PintadaA private solar energy project in Antioquia. See how it's structured and what risks it carries.
- What does EAR mean?The short lesson, with an example and a quick quiz.
Educational content. It is not financial, legal or tax advice, nor a public offering of securities. The rates are examples and don't belong to any product. Every stake in a private project carries risk, and its results depend on how the project performs.