LCI vs CDB: Brazil Fixed Income Comparison (2026)
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A Brazilian bank note (CDB) paying 110% of the CDI looks obviously better than a real-estate letter (LCI) paying 93% — until you remember the CDB is taxed and the LCI is not. This calculator runs the gross-up, the standard market conversion, and shows which one actually puts more money in your pocket. It uses the CDI at 13.90% per year as of September 2026, the regressive income-tax table, and the LCI/LCA exemption that remains in force in 2026.
How the gross-up works
LCI (real-estate credit letter) and LCA (agribusiness credit letter) are notes issued by Brazilian banks and backed by real-estate or farm credit. For individual Brazilian tax residents, their income is completely exempt from income tax under Law 11,033/2004. A CDB is a plain certificate of deposit from the same bank, and its gain is taxed at a declining rate depending on how long you hold it: 22.5% up to 180 days, 20% up to 360, 17.5% up to 720 and 15% beyond that.
Because of that gap, the two instruments cannot be compared at face value. The gross-up divides the LCI rate by one minus the CDB tax rate to find the equivalent taxable yield. An LCI paying 93% of the CDI held for 24 months (17.5% bracket) equals a CDB at 93 ÷ 0.825 = 112.73% of the CDI. Anything below that and the tax-free note wins.
| LCI/LCA pays | 6 months (22.5%) | 12 months (20%) | 24 months (17.5%) | 36 months (15%) |
|---|---|---|---|---|
| 85% of CDI | 109.68% | 106.25% | 103.03% | 100.00% |
| 90% of CDI | 116.13% | 112.50% | 109.09% | 105.88% |
| 95% of CDI | 122.58% | 118.75% | 115.15% | 111.76% |
| 100% of CDI | 129.03% | 125.00% | 121.21% | 117.65% |
Why the holding period decides the winner
The tax-free advantage shrinks as the tax on the competing CDB falls. Over six months the government takes 22.5% of the CDB gain, so exemption is worth a lot. Past two years the rate drops to 15% and the same exemption is worth far less. That single mechanism is why there is no universal answer to "LCI or CDB" — only an answer per term.
Take the most common pair quoted by Brazilian digital banks in 2026: a CDB at 110% of the CDI against an LCI at 93%. On R$10,000, the LCI wins at 6, 12 and 24 months — by R$55.29, R$69.50 and R$36.79 respectively. At 36 months the CDB finally flips the result and wins by R$124.46, because its break-even point falls to 109.41% of the CDI.
| Term | CDB 110% net | LCI 93% (tax-free) | Winner |
|---|---|---|---|
| 6 months | R$571.42 | R$626.71 | LCI by R$55.29 |
| 12 months | R$1,223.20 | R$1,292.70 | LCI by R$69.50 |
| 24 months | R$2,715.72 | R$2,752.51 | LCI by R$36.79 |
| 36 months | R$4,525.48 | R$4,401.02 | CDB by R$124.46 |
Lock-up, deposit insurance and issuer risk
The exemption is paid for with liquidity. Under CMN Resolution 5,215 of May 22, 2025, the minimum maturity for LCIs and LCAs that are not inflation-linked is six months, down from nine. Inflation-linked paper is far more restrictive: 36 months for an IPCA-linked LCI and 12 months for the LCA equivalent. Most issues cannot be redeemed early at all, while a daily-liquidity CDB can be cashed out on any business day — which is exactly why it pays less.
Both instruments carry the same protection from the FGC deposit guarantee fund: R$250,000 per taxpayer ID per institution, with a global ceiling of R$1 million renewable every four years. When a small bank offers 120% of the CDI it is pricing its own credit risk, not being generous. Inside the FGC limit that risk is manageable; above it, you become an unsecured creditor in a bank failure.
Is the LCI/LCA exemption still in force in 2026?
Yes. In June 2025 the Brazilian government issued Provisional Measure 1,303, which would have imposed a 5% withholding tax on income from LCI, LCA, CRI, CRA and LIG issued from January 1, 2026. It was pulled from the Chamber of Deputies agenda and expired on October 8, 2025 without being converted into law, so it never took effect. As of September 2026 the exemption under Law 11,033/2004 applies in full.
Market analysts treat the taxation of exempt instruments as postponed rather than dead, most likely revisited after the elections, with the expectation that any future rule would grandfather notes already purchased. One visible side effect is already in the pricing: LCIs pay less in 2026 than in 2025, averaging around 89% of CDI at 12 months and 92.5% at 24 months, which makes running the gross-up more important, not less.
Frequently asked questions
What is the gross-up formula for an LCI?
Divide the LCI rate, expressed as a percentage of the CDI, by one minus the income-tax rate that would apply to a CDB over the same period. An LCI at 93% of CDI held 24 months equals 93 ÷ 0.825 = 112.73% of CDI in a taxable CDB.
Are LCI and LCA taxed in Brazil?
Not for individual Brazilian tax residents. Their income is exempt under Law 11,033/2004, and that remains true in September 2026. The 2025 attempt to introduce a 5% withholding tax (Provisional Measure 1,303) expired in October 2025 without becoming law.
How long is my money locked up in an LCI?
At least six months for prefixed or CDI-linked notes, under CMN Resolution 5,215/2025. Inflation-linked LCIs require 36 months and inflation-linked LCAs 12 months. Many issues offer no early redemption at all, so treat them as buy-and-hold.
Can a foreigner buy an LCI?
Non-residents can access Brazilian fixed income only through specific regulated structures (Resolution 4,373 accounts) and face different tax treatment, so the exemption modeled here may not apply. This calculator reflects the rules for Brazilian tax residents investing as individuals.
Sources
Simulation based on the CDI at 13.90% per year in September 2026 and the regressive income-tax table of Law 11,033/2004, assuming the LCI/LCA exemption in force as of September 10, 2026. Excludes IOF on sub-30-day redemptions, brokerage fees, issuer credit risk and inflation. Not investment advice.
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Also available in Portuguese: LCI ou CDB: qual rende mais?