LCI/LCA vs Equivalent CDB

LCI/LCA vs CDB: comparing tax-exempt and taxable fixed income

LCI (Letra de Crédito Imobiliário) and LCA (Letra de Crédito do Agronegócio) are Brazilian fixed-income securities issued by banks to fund real-estate and agribusiness credit. Their key advantage for individuals (PF) is full exemption from income tax (IR), while CDBs (Certificados de Depósito Bancário) suffer regressive IR ranging from 22.5% (up to 180 days) to 15% (over 720 days). To compare apples to apples, convert the CDB gross yield to its net equivalent: CDB_net = CDB_gross × (1 − IR), or find the LCI-equivalent gross CDB rate: CDB_eq = LCI_rate / (1 − IR).

In practice, LCI/LCA typically pay between 80% and 95% of CDI, while CDBs from medium banks pay 100–120% CDI. After-tax math often favors LCI/LCA for shorter horizons (where CDB IR is highest) and tightens for longer ones. Both are protected by the FGC (Fundo Garantidor de Créditos) up to R$ 250,000 per CPF per institution. LCI has a minimum lock-up of 90 days by regulation; LCA used to require 9 months but was reduced.

Applications

Use this comparison whenever you face a buy-or-not decision between an LCI/LCA offer and a CDB: emergency reserves with 1–2 year horizons, short-term parking of cash before a planned purchase, or laddered portfolios mixing taxable and tax-exempt notes to optimize after-tax return. Banks frequently advertise “95% CDI” LCI products that beat “110% CDI” CDBs once IR is subtracted.

FAQ

Is the IR exemption permanent? The exemption is granted by federal law and applies to individuals only; legal entities (PJ) pay IR on LCI/LCA. There have been recurring legislative proposals to remove the benefit, but as of today it still applies.

Can I withdraw early? LCI/LCA typically have no daily liquidity and you must hold to maturity (or to the lock-up date plus secondary market sale, which often means a discount). CDBs may offer daily liquidity at a lower rate. Match the instrument to your real cash-flow needs.

Does the FGC really pay? Yes, historically the FGC has paid claims within weeks of bank failures, up to the R$ 250k limit per CPF per institution (with a global cap of R$ 1 million per CPF over 4 years). Diversify across institutions for larger amounts.