Fixed Income

Fixed Income

Fixed income is an investment modality in which the investor lends his money to a financial institution, government or company in exchange for a predetermined remuneration.

There are several types of fixed income investments, each with its own characteristics and risks. Some of the main ones are:

Public Titles

Government bonds are issued by the federal government and are considered the safest investments on the market. They can be purchased through Treasury Direct, an online platform that allows the purchase and sale of these securities.

There are different types of government bonds, such as:

• Selic Treasury: pays the investor the variation of the Selic rate, the basic interest rate of the economy;
• IPCA+ Treasury: pays the investor the inflation variation plus a pre-fixed interest rate;
• Prefixed Treasury: pays the investor a pre-fixed interest rate.

CDB (Bank Deposit Certificate)

The CDB is a bond issued by banks to raise funds. It offers a predetermined return, which can be post-fixed, linked to an inflation index or pre-fixed.

The CDB is guaranteed by the Credit Guarantee Fund (FGC) in up to R$250,000 per CPF and financial institution. It is important to check the strength of the bank before investing.

LCA (Agribusiness Letter of Credit) and LCI (Real Estate Letter of Credit)

The LCA and LCI are securities issued by financial institutions with the objective of financing agribusiness and the real estate sector, respectively. They offer income tax exemption for individuals.

Like the CDB, the LCA and the LCI are also guaranteed by the FGC in up to BRL 250,000 per CPF and per financial institution.

Debentures

Debentures are debt securities issued by companies to raise funds. They offer a predetermined return and can have varying maturities.

The debentures are not guaranteed by the FGC, so it is important to assess the financial health of the company before investing.

These are just a few examples of fixed income investments. Each one has its particularities in relation to profitability, maturity, risk and liquidity. It is important to study and understand each type of investment before making a decision.

Next page of the Free Ebook:

15Types of fixed income investments

2 minutes