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Real returns · Part 2 of 2

US-dollar CD or apartment? The comparison almost nobody does in full

In Part 1 we calculated what an apartment in Asunción really earns: a 6.2% net yield per year, before income tax. The next question is obvious: is that good or bad?

MasterPlan Investments·October 2026·6 min read

A number on its own says nothing. It becomes useful when you put it next to what you'd do with the same money in another investment.

The most common comparison in Paraguay: the CD

Almost half of all bank deposits in Paraguay sit in Certificados de Depósito de Ahorro, or CDAs: the local equivalent of a certificate of deposit or fixed-term deposit. It's the benchmark investment for most people: you put the money in, the bank pays you a fixed interest and, at maturity, gives you your capital back.

During 2026, a US-dollar CD with a term of more than one year paid on average between 5.4% and 5.8% a year, according to the Central Bank of Paraguay. Individual savers are usually offered a bit less than that average, which is pushed up by large institutional depositors. Rounding: between 5% and 6% a year.

Put that way, it looks like a tie. And it's a reasonable comparison, up to that point. The thing is, it's missing half the math.

What the direct comparison doesn't show

First: with a CD, your capital doesn't grow. The bank pays you interest, but the principal stays the same. If you put in USD 100,000, twenty years from now you get back exactly USD 100,000. Not one more.

Second: the dollar loses value too. Between 2006 and 2026, cumulative US inflation was around 67%. What cost USD 100 in 2006 costs about USD 167 today. Put the other way around: in twenty years, a dollar kept in a drawer lost close to 40% of its purchasing power.

In other words: those USD 100,000 you recover intact buy, in real terms, what about USD 60,000 bought when you deposited them. That's not the CD's fault, nor the bank's: it's what happens to any capital that sits in dollars without growing.

Think of it with something concrete

Let's take two US prices, from the country where the dollar is issued. In 2006, a brand-new Toyota Corolla, base model, cost about USD 14,500. Today, the same base model costs about USD 23,000.

With the USD 100,000 the CD gives you back, twenty years ago you could buy seven Corollas. Today you can buy four. The CD delivered what it promised: it returned every dollar. What changed is what those dollars buy.

And it's not just the car. A Big Mac, according to the index published by The Economist, went from USD 2.67 in January 2006 to USD 6.12 in January 2026: more than double. Half of that increase happened in the last five years.

An apartment works differently

A property has two gains. The first is the rent, which we already measured: 6.2% net. The second is that the asset itself changes in value over time. In Asunción's most valued neighborhoods, the price per m² rose between 2% and 3% a year over the past nine years. It's not a promise, but it's what happened, and at the very least it keeps pace with dollar inflation.

The numbers over twenty years

Suppose USD 100,000 in each option, and that for twenty years you collect the CD's interest or the apartment's rent, and you spend it. At the end of the road:

The income over the twenty years is similar. The difference is in what you're left with at the end: one gives you back money that's worth less, the other leaves you an asset that's worth more.

And we were still conservative

Throughout this exercise we kept the rent flat for twenty years, to keep the math simple. In reality, rent adjusts year after year. Suppose it grows just 2% a year, less than dollar inflation in recent years. Look at what happens to what you collect each year for the same USD 100,000:

The CD pays you the same in the first year and the last. The apartment pays you a little more every year, on a price you already paid: by year twenty, the rent equals 9% of your original investment, not 6.2%. Over twenty years that's about USD 26,000 more in rent than in the flat version.

A property's return isn't flat: it grows over time.

So, CD or apartment?

They're two different products, for different goals. The CD is a very good tool for the short and medium term: safe, liquid and predictable; you know exactly how much you'll collect and when. And it's always wise to diversify: keep part of your wealth available and another part working for the long term.

To build wealth over the long term, on the other hand, property is more solid. Even more so in a developing country like Paraguay, where the cities are still growing and consolidating.

The CD keeps your money. The apartment makes it grow.

Sources and assumptions. US-dollar CD rates: Central Bank of Paraguay, Superintendency of Banks, weighted-average nominal deposit rates, January (5.76%), May (5.53%) and August 2026 (5.42%) for terms over 365 days. Share of CDs in total deposits: BCP. Cumulative dollar inflation 2006–2026 (~67%): US CPI (BLS). Toyota Corolla base model, US list price: 2006 USD 14,545 (Kelley Blue Book), 2026 USD 23,125 (AutoFinder). Big Mac in the US: The Economist, Big Mac Index (public dataset), January 2006 and January 2026. These are US prices; in Paraguay the dollar price of these goods depends on each period's exchange rate and taxes. Apartment appreciation in Asunción (2–3% a year, 2017–2026): asking prices, order of magnitude; past appreciation does not guarantee future results. 20-year example: USD 100,000; CD at 5.5% simple interest, not reinvested; apartment with an initial net yield of 6.2%, 2.5% annual appreciation (100,000 × 1.025²⁰ ≈ 164,000) and, in the adjusted variant, rent growing 2% a year (year 10 ≈ 7,400; year 20 ≈ 9,030; cumulative ≈ 150,600 vs 124,000 flat); both options compared before taxes. Illustrative.