What are CETES?

CETES are debt instruments issued by the Mexican government to raise funds. When you invest in CETES,you’re essentially buying them at a discount and receiving their full nominal value at the end of the investment term. The difference between the purchase price and the nominal value is your profit.

CETES are considered low-risk investments as they are backed by the federal government. You can start investing with as little as $100 pesos through the official Cetesdirecto platform, without paying any commissions.

Current CETES Interest Rates

Here are the annual gross interest rates for CETES, based on the latest Bank of mexico auction:

• CETES to 28 days: 8.10%
• CETES to 91 days: 8.06%
• CETES to 182 days: 8.19%
• CETES to 364 days (1 year): 8.31%
• CETES to 2 years: 8.60%

The 2-year CETES currently offer the highest rate, making them attractive for investors seeking higher returns over a longer period.

Taxation of CETES Investments

One of the advantages of investing in CETES is the low and automatic tax retention. The Ministry of Finance and Public Credit (SHCP) and the Tax management Service (SAT) apply an annual ISR (Income Tax) retention of 0.50% on the invested capital.

For example, if you invest $10,000 pesos, the SAT will retain only $50 pesos per year in taxes, regardless of the interest rate earned. This is a notable tax advantage compared to othre investment instruments with higher withholding rates.

Example: Calculating your Net Gain

Let’s say you invest $10,000 pesos in CETES for one year with a gross interest rate of 8.31%:

• Gross interest: $831 pesos
• SAT retention (0.50% of capital): $50 pesos
• Net interest: $781 pesos
• Total return (including original investment): $10,781 pesos

In this scenario, your net annual gain would be 7.81%,a competitive return compared to traditional banking products or low-risk investment funds.

Step-by-Step Guide to Calculating Net Gain

1. Check the current interest rate for your desired investment term on the cetesdirecto website.
2. Multiply your investment capital by the interest rate to calculate your gross earnings.
3. Calculate 0.50% of your investment capital for SAT retention.
4. Subtract the SAT retention from your gross earnings to determine your net gain.

This calculation method applies to any investment amount, from $100 to millions of pesos.

Participating in CETES Auctions

CETES auctions are held every Tuesday. To participate, you must submit your order before 1:00 p.m. on Monday through your Cetesdirecto account. Orders placed after this time will be processed in the following week’s auction.

You can also enable the automatic reinvestment option, which automatically renews your CETES at the end of the term, without requiring manual intervention.

Tax Reporting for CETES Investments

If you are an individual with no other income and invest solely through Cetesdirecto, you are not required to file a tax return for your CETES earnings, as the platform automatically withholds the corresponding tax.

However, if you have other sources of income, are registered with the SAT, or wish to deduct other expenses, you must include your CETES earnings in your annual tax return.In many cases, the 0.50% retention may result in a favorable balance.

Advantages of Investing in CETES

• High real rate: Net performance can exceed the cost of living, especially with controlled inflation.
• Virtually null risk: Backed by the Mexican federal government.
• Total accessibility: Start investing with as little as $100 pesos.
• No commissions or intermediaries: When using Cetesdirecto.
• Low and automatic tax: only 0.50% per year.

Key details

• CETES to 2 years: 8.60% annual gross.
• Official website: https://www.cetesdirecto.com/sites/portal/inicio
• is my capital guaranteed? Yes, by the mexican government.
• Is the rate fixed? Yes,the rate is set at the time of purchase and remains constant.
• What are the taxes? Only 0.50% of the invested capital is automatically withheld.