Understand How It Works – Low Interest


Created with the objective of raising funds and financing the real estate sector, LCI (Real Estate Letter of Credit) is issued by financial institutions and has proved to be a good alternative for those seeking a safe and profitable investment.

But how does LCI work? It is a type of investment in short-term fixed income and exempt of Income Tax (IR) for individuals, a great advantage, since other investments come to use aliquots of 15% to 22.5% of IR at the time of the ransom.

In addition, the risk for investing in LCI is low. This is because it is a modality that has the support of up to R $ 250 thousand per CPF of the Credit Guarantee Fund (FGC). What does this mean in practice? That the investor is guaranteed this redemption value, if the bank or brokerage firm, where he invested his money, will suffer bankruptcy, intervention or liquidation. The redemption does not happen automatically, but it is a positive point for the investor.

Because of the IR exemption and the security of the FGC, LCI has attracted investors who bet on fixed income. It is necessary, however, to stick to the minimum term for application, with the minimum time established for redemption from 90 days. It is therefore recommended that resources be maintained up to the due date so that incomes are not affected.

Given the appetite of the financial market, the greater the value invested (whose minimum varies according to the institution, with smaller banks usually allowing lower values) and the longer the resource remains invested, the higher the rate of return that can be traded with its manager, and can sometimes reach close to 100% of the Interbank Deposit Certificate (CDI), which, according to experts, already makes the investment interesting. To get an idea, in 2018, the CDI stood at 6.42%, that is, 100% of this index means to have this annual profitability and so the calculation must be done, always in a proportional way.



LCI also allows the investor to know at the time of purchase how much his money will yield (bond with a fixed rate), follow the market interest rates (floating rate, usually linked to CDI) or a two modalities, ie contract the LCI from a pre-established rate together with the variation of some economic indicator, such as the General Consumer Price Index (IGP-M) or the Extended Consumer Price Index (IPCA).

Finally, the Mortgage Loan Letter may be a good bet for more conservative investors, because it brings the security of the Brazilians darling, which is the savings, but with a greater profitability, when, of course, due care is taken regarding the lack and liquidity.


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