Best Fixed Income Investments in Brazil 2026: CDB vs LCI vs Tesouro Direto
Published: August 8, 2026 | Reading Time: ~12 minutes
When people think about investing, stocks usually come first to mind. But in Brazil, the most powerful wealth-building tool for the average person is often renda fixa — fixed income. With historically high interest rates and a tax framework that rewards certain instruments, Brazilian fixed income offers some of the highest real returns available to retail investors anywhere in the world.
The three main pillars of Brazilian fixed income are CDB (bank deposits), LCI/LCA (credit letters backed by real estate and agriculture), and Tesouro Direto (government bonds). Each has distinct tax treatment, liquidity, and risk characteristics that make them suitable for different goals.
This guide explains each product in plain language, compares them side by side, and shows you how to choose the right one based on your timeline, risk tolerance, and tax situation.
Why Brazil Is Uniquely Attractive for Fixed Income
Brazil's basic interest rate, the taxa Selic, has historically been among the highest in the world, often exceeding 10% annually. This means even "safe" investments like government bonds can generate double-digit returns — something virtually unheard of in developed economies.
The Selic rate is set by the Central Bank of Brazil (Banco Central) through its monetary policy committee (COPOM). It serves as the benchmark for virtually all fixed-income products in the country. When the Selic rises, fixed-income returns rise with it.
Closely related is the CDI (Certificado de Depรณsito Interbancรกrio), the rate banks charge each other for overnight lending. The CDI tracks the Selic extremely closely, and many CDBs and LCIs express their returns as a percentage of the CDI (e.g., "110% do CDI").
Understanding the CDI Benchmark
When you see a CDB advertised as paying "100% do CDI," it means the investment earns exactly the CDI rate. A CDB at "110% do CDI" earns the CDI plus 10% more. This benchmark system makes comparisons between products straightforward.
For example, if the CDI is currently 12% annually, a CDB at 110% do CDI earns roughly 13.2% annually before tax. An LCI at 95% do CDI earns about 11.4% — but remember that LCIs are tax-free for individuals, so the comparison isn't as simple as the headline numbers suggest.
Always ask three questions when evaluating a fixed-income product: what is the rate (percentage of CDI or fixed), what is the tax treatment, and what is the liquidity? These three factors determine your actual net return.
CDB: Certificado de Depรณsito Bancรกrio
A CDB is essentially a loan you make to a bank. In exchange for your deposit, the bank pays you interest at an agreed rate. CDBs are issued by banks and are one of the most popular fixed-income instruments in Brazil.
CDB returns can be structured in three ways. The most common for beginners is pรณs-fixado, where the return tracks the CDI (e.g., 105% do CDI). You don't know the exact return in advance, but it moves with interest rates.
Prefixado CDBs lock in a fixed rate (e.g., 12% per year) regardless of what happens to the Selic. These are attractive when you expect rates to fall, but risky if rates rise significantly after you lock in.
Hรญbrido or inflation-linked CDBs pay a fixed rate plus inflation (IPCA), such as "IPCA + 6%." These protect purchasing power over the long term and are popular for retirement goals.
A critical safety feature of CDBs is the FGC (Fundo Garantidor de Crรฉditos), which protects deposits up to R$ 250,000 per person per institution. This means if the issuing bank fails, the FGC reimburses you up to that limit. For amounts within this protection, CDBs carry minimal credit risk.
CDB earnings are taxed at the individual level using Brazil's regressive tax table, which we'll explain below. Short-term holdings are taxed more heavily than long-term holdings, which incentivizes patient investing.
LCI and LCA: The Tax-Free Champions
LCI (Letra de Crรฉdito Imobiliรกrio) and LCA (Letra de Crรฉdito do Agronegรณcio) are credit instruments that fund the real estate and agriculture sectors, respectively. They function similarly to CDBs — you lend to a financial institution, and it pays you interest.
The defining advantage of LCI and LCA for individual investors is the tax exemption. Earnings are completely free from income tax for individuals, which dramatically improves net returns compared to equivalent taxable products.
This tax advantage means you can't simply compare LCI rates to CDB rates directly. A tax-free LCI at 95% do CDI may beat a taxable CDB at 110% do CDI, depending on your holding period and tax bracket. You must calculate the "tax-equivalent" rate to compare fairly.
LCIs and LCAs are also covered by the FGC up to R$ 250,000 per institution, providing the same deposit protection as CDBs. However, they typically have longer lock-up periods — most LCIs and LCAs require a minimum 90-day holding period, and some lock your money for one to three years.
The trade-off for the tax exemption is reduced liquidity. You generally cannot redeem an LCI or LCA before maturity without potentially losing money. Choose these for goals you won't need to access for at least one to two years.
Tesouro Direto: Government Bonds for Everyone
Tesouro Direto is a program that allows individuals to buy Brazilian government bonds directly, with very low minimum investments. Because the issuer is the Brazilian government, these are considered the lowest-risk fixed-income products available in Brazil.
Tesouro Direto offers three main bond types, each serving different purposes.
Tesouro Selic tracks the Selic rate directly and provides daily liquidity, meaning you can sell at any time without losing value. This makes it the ideal vehicle for emergency funds and short-term savings. Its main risk is minimal — essentially just the bid-ask spread when selling.
Tesouro IPCA+ pays a fixed rate plus inflation (IPCA). For example, a bond quoted at "IPCA + 6%" guarantees you 6% real return above inflation if held to maturity. This is the preferred choice for long-term goals like retirement, education funding, or any goal spanning more than five years where inflation protection matters.
Tesouro Prefixado pays a fixed rate regardless of inflation or Selic movements. Like prefixado CDBs, these are attractive when you expect rates to fall, but you lock in the rate and accept inflation risk.
Tesouro bonds have a unique feature called marcaรงรฃo a mercado (mark-to-market pricing). If you sell before maturity, your return depends on current market rates, which can mean gains or losses. Holding to maturity guarantees the contracted return, so always match the bond's maturity to your goal timeline.
Tesouro Direto charges a small custody fee (taxa de custรณdia) of about 0.20% annually on amounts above a certain threshold, and earnings are taxed at the regressive income tax table.
The Regressive Tax Table (Tabela Regressiva)
Income tax on Brazilian fixed income (for CDBs, Tesouro, and most taxable instruments) follows a regressive schedule based on holding period. The longer you hold, the lower your tax rate.
For investments held up to 180 days, the tax rate is 22.5% of earnings. From 181 to 360 days, it drops to 20%. From 361 to 720 days, it's 17.5%. Beyond 720 days (two years), it falls to 15%.
This structure rewards patient investing and penalizes short-term trading. An investor who holds a CDB for three years pays 15% tax on earnings, while someone who redeems after six months pays 22.5% — a significant difference that compounds over time.
Remember, LCI and LCA are exempt from this tax entirely for individuals, which is why their lower headline rates can still outperform taxable alternatives. Always calculate the after-tax return when comparing products.
Comparing the Three: Side by Side
The following table summarizes the key differences between CDB, LCI/LCA, and Tesouro Direto to help you choose the right product for each goal.
| Feature | CDB | LCI / LCA | Tesouro Direto |
|---|---|---|---|
| Issuer | Banks | Banks (backed by real estate/agri) | Federal Government |
| Tax on Earnings | Regressive (22.5%–15%) | Exempt for individuals | Regressive (22.5%–15%) |
| FGC Protection | Yes (R$250k) | Yes (R$250k) | No (govt backing instead) |
| Liquidity | Varies (daily to maturity) | Low (min 90 days) | Daily (Selic) / Maturity (others) |
| Minimum Investment | Varies (R$100+) | Varies (R$1,000+) | Very low (~R$30+) |
| Best For | Medium-term, higher yields | Tax-free medium/long-term | Emergency & long-term goals |
Choosing Based on Your Goal
Different goals call for different products. Matching the instrument to the objective is the foundation of sound fixed-income strategy.
For an emergency fund, liquidity is paramount — you need access within days. Tesouro Selic is ideal because you can redeem daily without loss of principal. High-liquidity CDBs (100% do CDI or above with daily liquidity) also work well. Avoid LCI/LCA here because of their lock-up periods.
For a medium-term goal (one to three years), such as a down payment or a car purchase, LCIs and LCAs shine because their tax exemption boosts net returns over that horizon. Choose maturities aligned with your timeline to avoid early redemption penalties.
For a long-term goal (five+ years), such as retirement or education funding, Tesouro IPCA+ is hard to beat. It guarantees a real return above inflation, protecting your purchasing power across decades. Inflation-linked CDBs (IPCA + fixed rate) are also excellent if offered by a solid bank.
For diversification within fixed income, many investors build a ladder — spreading investments across different products and maturities to balance liquidity, yield, and tax efficiency. This reduces reinvestment risk and smooths returns over time.
How to Invest: Practical Steps
Opening access to fixed income is straightforward. You need a CPF and an account at a brokerage (corretora) or a bank that offers investment products. Digital brokers like XP, Rico, Clear, NuInvest, and Banco Inter provide access to CDBs, LCIs, LCAs, and Tesouro Direto in one platform.
For Tesouro Direto specifically, you register through your chosen brokerage, which acts as an intermediary with the Treasury. There's no separate account needed beyond your brokerage account.
When selecting products, use the brokerage's comparison tools to filter by rate, maturity, and FGC coverage. Pay attention to the minimum investment amount and any lock-up periods. For CDBs and LCIs from smaller banks, verify the issuing institution's health and stay within the FGC protection limit per institution.
Common Mistakes to Avoid
Chasing the highest nominal rate without considering tax is the most common error. A CDB at 115% do CDI sounds better than an LCI at 97% do CDI, but after taxes and holding period, the LCI may win. Always calculate net returns.
Ignoring liquidity is another trap. Locking money in a three-year LCI for a goal you might need in 18 months creates problems if circumstances change. Match every investment to a specific goal timeline.
Panic-redeeming Tesouro IPCA+ bonds before maturity can lock in losses due to mark-to-market pricing. If you bought a long-dated inflation bond, hold it to maturity unless you have a compelling reason to sell. Understanding mark-to-market before buying prevents nasty surprises.
Overlooking the FGC limit is risky for larger investors. If you invest R$ 500,000 in CDBs at one small bank, only R$ 250,000 is protected. Spread holdings across multiple institutions or favor government bonds for amounts above the protection threshold.
Frequently Asked Questions
Which is safer: CDB or Tesouro? Tesouro Direto is backed by the federal government, which can print money, making it the lowest-risk option. CDBs are protected by the FGC up to R$ 250,000. Both are very safe for amounts within their respective protections.
Is LCI really always tax-free? For individual investors, yes — earnings are exempt from income tax. However, this exemption applies to individuals; companies and certain structures may face different treatment. Verify your specific situation.
Can I lose money in fixed income? Generally, no — if held to maturity, you receive the contracted return. However, selling Tesouro bonds before maturity can result in losses due to mark-to-market, and early redemption of some CDBs may forfeit part of the return. Fixed income is low-risk, not zero-risk.
What's the minimum to start with Tesouro Direto? Very low — often around R$ 30 to R$ 150 depending on the bond. This makes Tesouro Direto one of the most accessible investment options in Brazil.
Do foreigners pay the same tax on fixed income? Non-residents investing through specific structures (Resoluรงรฃo 4.373) may face different tax treatment, sometimes with zero tax on certain instruments under specific conditions. Resident foreigners pay the same taxes as Brazilian citizens. Consult a tax specialist for cross-border situations.
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