What Is A Certificate Of Deposit? [CD]

In addition to accumulating assets and achieving quality of life, consumers who regularly invest their resources are more likely to circumvent the constant economic crises experienced by the country.

Thus, it is possible to make your income not suffer so much from the impacts of high inflation.

Actions such as investing in Certificate Of Deposit and other investments are excellent for not only preserving but also increasing your assets.

CD is the acronym for Certificate Of Deposit, which corresponds to fixed income security paid through private credit.

In other words, when you invest capital in these papers, you lend money to a bank or a financial institution that, in turn, will grant credit to your customers and return the borrowed funds with accrued interest.

It is a fixed income security, as the remuneration criteria will be defined when the investor contracts the Certificate Of Deposit.

Thus, on the day the application expires – the Certificate Of Deposit due date – the holder will receive the initial amount plus interest that will serve as the return on the investment.

It is a type of bond issued by banks to raise funds for their activities.

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Anyone who invests in a Certificate Of Deposit is lending money to the bank in exchange for remuneration, while the bank uses the funds raised from investors to make loans to its customers.

It is not difficult to know how interesting this loan is for the bank, which then passes on that money and lends it to another person (or company) for much higher interest.

This difference between the cost of funding (the fee that the bank pays to those who lend the money to them) and the fee that the bank charges to those who borrow that same money is the so-called “bank spread”.

Warning – banks borrow through the CDB at a rate compatible with the market, but they lend to their customers by charging stratospheric fees on products such as overdraft, revolving credit card and other loans.

Nowhere in the world are there financial investments that remunerate the investor with the same profitability as the interest charged on loans from major Brazilian banks.

Although the profitability of some of the large banks’ CDBs is in line with the profitability practiced in other investments in the financial market, the rates practiced when large banks lend to their customers are absurd.

The investor is subject to what is called “credit risk”, that is, the possibility of the financial institution not paying for the loan it received.

Even with this risk, there is protection: the CDBs are guaranteed by the FGC (credit guarantee fund).

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What are its main advantages of Certificate Of Deposit

Check out some reasons why it is worth investing in Certificate Of Deposit:

FGC Guarantee

The Credit Guarantee Fund (FGC) guarantees amounts of up to $250 thousand to Certificate Of Deposit investors in the event of the bankruptcy of the financial institution issuing the securities.

Because of this guarantee, the investment can be considered of very low risk.


Unlike other fixed income investments, banks and brokers do not charge administration, performance and custody fees when selling Certificate Of Deposit.

The absence of these costs improves earnings for the investor.


The Certificate Of Deposit is an extremely advantageous application compared to more conservative investments, such as savings.

For you to have an idea, with a Selic rate around 10%, a Certificate Of Deposit that pays from 90% CDI already starts to have better profitability than the passbook.

However, it is always necessary to monitor this index and check which Certificate Of Deposit is best suited to your profile.

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The profitability of these bonds is not standardized like that of savings accounts.

At any bank, savings yield the same, since their income is established by law. Certificate Of Deposit have different remunerations, depending on the bank and the term, for example.

Therefore, it is always important to check the remuneration of a Certificate Of Deposit before exchanging savings for it. The investor should compare both returns to see if the CDB can actually be more advantageous.

Recalling that the Certificate Of Deposit is subject to income tax collection, and savings are not.

The format of a Certificate Of Deposit remuneration may also vary.

They can be post-fixed, prefixed or a mixture of the two types.


They pay a percentage of the DI rate, the interest rate practiced on loan operations between banks, which is close to the basic interest rate (Selic) and serves as a reference for investments in fixed income.

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A post-fixed Certificate Of Deposit

This can pay something like 90% of the CDI, 87% of the CDI, 100% of the CDI or 103% of the CDI, for example.

The percentage is applied to the daily CDI, which makes the remuneration, as a consequence, also daily. The investor only knows how much he will actually receive at the time of redemption or on the security’s maturity date.


They pay an interest rate agreed at the time of the investment, such as 1% per month or 10% per year, for example.

Linked to inflation

Certificate Of Deposits that mix the two forms of remuneration in general are linked to inflation.

They pay a fixed rate plus a variation in an inflation index. For example, 3% per year plus IPCA, which is the official inflation index.

In other words, this Certificate Of Deposit pays 3% above the IPCA variation annually.

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How to invest in Certificate Of Deposit

The investment in Certificate Of Deposit can be made directly at the bank issuing the security or through stock brokers and distributors that act as intermediaries.

These investment companies usually offer securities issued by several financial institutions.

Recalling that the FGC guarantee is valid for issuers, not for intermediaries.

That is, if you invest in several CDBs of different issuers through a single broker, the coverage will apply for each issuer separately, not for the investment platform.

Is there an easy way to get a decent CDB?

The answer is yes! Through stock brokers and smaller banks it is very easy to find good deals.

There are Certificate Of Deposits with daily liquidity with more than 90% of the CDI with a minimum investment of up to $ 100.00, however, the most common is to find products with maturity in 1, 2 or 3 years that pay rates between 100 and 118%.

In these cases, you lend the money to medium-sized banks, which end up paying this higher profitability because they have more difficulties in raising money than larger banks.

Perhaps the biggest challenge of applying through a broker is finding the Certificate Of Deposit with the ideal term for your case, but as the options are diverse, just look and be aware if the value is consistent!

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