Finance: Optimism for New Instrument

Negotiable certificates of deposit, a new investment tool that was authorized in El Salvador, generates expectations because it promises to improve the yield of savings and may be processed with no need to register it in an agency.

Wednesday, February 24, 2021

The Standards Committee of the Central Reserve Bank (BCR) authorized on February 2, 2021 the new investment tool called negotiable certificates of deposit (CDN). In the case of the regulation that will govern the use of this instrument, it came into force last February 9.

See "What Financial Services Do Consumers Demand?"

Because the new instrument is digital and works like a time deposit, with the difference that it can be sold through the Stock Exchange and by doing so the user does not pay penalty or commissions and can dispose of the balance at any time, it has generated expectation among local financial entities.

Romeo Rivera Fortin, vice-president of individuals and SMEs of Banco Agricola, explained to that "... the CDNs promise to improve the yield of savings and may be processed with no need to register it in an agency, but through the digital channels of the authorized entities".

Rivera added that "... Salvadorans will be able to improve the return on their savings and request them from their home or office, they will not have to go to an agency to hire them, with low opening amounts, no commissions and they can always designate their beneficiaries from the place they want, in a '24/7' format".

The certificates can be issued by banks, cooperative banks and savings and loan companies, and are backed by the Deposit Guarantee Institute.

See video and presentation of the informative webinar conducted by the BCR.

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