CDB, LCI, and LCA: Which One Really Yields More?

CDB (Bank Deposit Certificate), LCI (Real Estate Credit Bill), and LCA (Agribusiness Credit Bill) are three of the most popular private fixed-income options in Brazil, and a common question arises: which one yields more? The answer is not as simple as merely comparing the advertised rate, because each product has different taxation rules, terms, and liquidity.

In this article, we will compare these three investments in practice, showing how to calculate the actual net yield of each one and in which situations it makes more sense to choose one over the other.

What Each of These Investments Is

The CDB (Certificado de Depósito Bancário / Bank Deposit Certificate) is a security issued by banks to raise capital, functioning as a loan you make to the financial institution in exchange for interest. The LCI (Letra de Crédito Imobiliário / Real Estate Credit Bill) and LCA (Letra de Crédito do Agronegócio / Agribusiness Credit Bill) are also issued by banks, but the funds raised must be earmarked to finance the real estate and agribusiness sectors, respectively.

Because they incentivize strategic sectors of the economy, LCIs and LCAs feature an income tax exemption for individual investors, whereas the CDB is taxed according to the regressive income tax table.

The Income Tax Exemption Changes Everything in the Comparison

Since LCIs and LCAs are income-tax-exempt, an instrument paying a tax-free 90% of the CDI (interbank deposit certificate rate) can actually yield more in practice than a CDB paying 100% of the CDI, depending on the term. This is because, with a CDB, the income tax rate can reach 22.5% for short terms, significantly reducing net yield.

For longer terms (over 720 days), the CDB tax rate drops to 15%, which narrows the advantage of the LCI and LCA exemption; however, you still need to run the numbers in each specific case, as the rates offered vary considerably among institutions.

Liquidity: A Factor That Often Carries Weight in the Decision

An important detail is that many LCIs and LCAs have a minimum grace period—generally 90 days—during which the money is locked up with no possibility of early redemption. In contrast, some CDBs offer daily liquidity, which can be decisive for those who are unsure when they will need the money.

Before comparing yield alone, it is essential to check the redemption terms of each security, since a higher return may not make up for the lack of flexibility if you need the money sooner than planned.

Safety: The Role of the FGC Across All Three Products

CDBs, LCIs, and LCAs all carry backing from the FGC (Fundo Garantidor de Créditos, Brazil's Credit Guarantor Fund), which covers up to R$ 250 thousand per CPF (tax ID) and per institution in the event of the issuing bank's failure. This makes all three investments relatively safe for individual investors, provided the amounts invested remain within this per-institution limit.

For larger amounts, the best approach is to diversify across different banks, avoiding the concentration of all your wealth in a single institution, even if the yield offered seems attractive.

How to Compare Rates in Practice

A simple way to compare is to convert everything to an equivalent net rate. To do this, take the gross return of the CDB and deduct the income tax rate corresponding to the investment term, arriving at a figure directly comparable to the percentage of the CDI offered by the tax-exempt LCI or LCA.

Many brokerages and online calculators already perform this calculation automatically, but understanding the underlying logic helps you avoid the trap of comparing only gross figures without considering taxation.

Conclusion

There is no single answer to which product yields more: it all depends on the term, the issuing institution, and the liquidity conditions of each specific security. What is clear is that the income tax exemption of LCIs and LCAs can offset nominally lower rates, especially over shorter terms.

The ideal approach is to always calculate the net yield factoring in taxation and check the redemption conditions before deciding where to allocate your money.

Get the Next Article Before Everyone Else

If you want to keep comparing investments clearly and hassle-free, subscribe for free to the Papo em Ação newsletter.