LCI/LCA vs Equivalent CDB

LCI/LCA and the IR exemption

LCI (Letra de Crédito Imobiliário, Law 10.931/2004) and LCA (Letra de Crédito do Agronegócio, Law 11.076/2004) are bank notes that funnel money into real estate and agribusiness, respectively. For an individual (PF), the interest is fully exempt from IR, which is a real advantage over a CDB that hands 15-22.5% to the regressive table. The catch is that to compare them fairly you have to "gross up" the LCI/LCA rate. Take an LCI paying 90% of CDI net. That lands at roughly 117% of CDI gross in a 2-year CDB, since 90/(1-0.175) ≈ 109% and the higher figure reflects a longer-horizon comparison. Both are FGC-protected up to R$ 250,000 per CPF per conglomerate and usually come with a 90-day minimum holding period.

Use cases

Retail investors working toward goals 1-3 years out, anyone running a CDB-vs-LCI comparison on an after-tax basis, and high-bracket investors who allocate with taxes in mind. The exemption pays off most on short-to-medium maturities, exactly where the IR bite would otherwise be steepest (22.5-20%).

FAQ

Why are LCI/LCA tax-free? The government drops the IR to steer funding into real estate and agribusiness, two sectors it wants to subsidize.

Is there a minimum holding period? Yes, usually 90 days, though some issues ask for 9 or 12 months. Pulling the money out early is normally off the table, so you sit tight until maturity.

Are LCI/LCA covered by FGC? Yes, up to R$ 250,000 per CPF per financial conglomerate, the same coverage a CDB or savings account gets.