CDBs

CDBs, short for Certificados de Depósito Bancário, are fixed‑income securities issued by banks in Brazil to raise funds from investors. They function as time deposits with a defined maturity and a promised return, which can be paid at maturity or periodically. CDBs may be pre‑fixed, offering a stated rate at purchase, or post‑fixed, with yields tied to a reference rate such as the CDI (Certificado de Depósito Interbancário) or, less commonly, to inflation indices.

Investors buy CDBs directly from banks. Some CDBs are non‑liquid until they mature, while others include liquidity features that allow early redemption, often with penalties or reduced yields. Yields are typically quoted as a percentage over CDI or as a fixed rate, and CDBs are commonly chosen for higher potential returns relative to traditional savings accounts, particularly for longer terms or favorable CDI levels.

Taxation and guarantees: In Brazil, earnings from CDBs are subject to Imposto de Renda withholding, with rates that depend on the holding period: 22.5% up to 180 days, 20% for 181–360 days, 17.5% for 361–720 days, and 15% for 720 days or more. Some CDBs offer daily liquidity, but this can affect returns. The funding is protected by the Fundo Garantidor de Créditos (FGC) up to 250,000 reais per investor per financial institution, which provides a government‑backed safety net in the event of bank failure. This guarantee is not a blanket deposit guarantee for all accounts and investments across institutions.

Regulation: CDBs are overseen by Brazilian financial authorities, with the Central Bank of Brazil supervising and ensuring disclosure, while marketing and distribution may fall under additional securities regulation when offered as investments.

Compared with similar instruments in other countries, CDBs combine bank credit risk, a tax regime, and FGC protection, yielding a distinctive retail fixed‑income option in Brazil.