Fixed Income Explained: A Beginner's Guide

[00:03] manual. I am L. And I am Ricardo. And today we're going to talk about a topic that's very popular right now, and it's going to completely change the way you invest completely change the way you invest your money: fixed income. If

[00:15] you think investing is only for people with a lot of money, that it's too complicated, or if you think investing is only through the stock market and

[00:27] that you need to understand charts, which is very important and that you should follow our content here to better understand how to interpret a chart, how to do a well-developed technical analysis,

[00:40] well-developed technical analysis, understand that there is fixed income investment, which is a more simplified form, and the opposite of that, so you can have predictability and security in your investments. And the

[00:52] goal of our video is for you to understand all the main ways to invest in fixed income. We'll go into detail one by one, you'll understand how it works, the types that exist, the risks, the deadlines. This content

[01:07] is very important for you if you're tired of investing in savings accounts that yield almost nothing, or if you want to diversify your portfolio. Even if you already understand a little about fixed-income investments, you'll understand them better and become an

[01:19] expert on the subject. And in the end, you 'll know which investment best suits your goal. Go ahead and like our video, and subscribe to our channel if you don't already, because there will be lots of great

[01:32] examples . Because it will have a lot of content and practical examples of how to invest. Let

[01:47] exactly is fixed income? Many people obviously hear this song, but they don't understand what it means. So let 's get to the most important part. Fixed income is basically an investment where you lend money to someone.

[02:03] It could be the government, a bank, a company, and they get that money back with interest. Yes, it's like you're the bank for a while. You lend today and receive more later. A practical example is to imagine that you lend R$1,000 to the

[02:18] government for one year, and it promises to pay you R$100 at the end of that period, or 10%. Simply put, you are investing in a fixed income asset. That extra R$100 is the

[02:30] return, or in other words, the interest you earned from leaving your money there. Unlike variable income, such as stocks on the stock exchange, with variable income you don't know how much you will earn, or even if you will earn anything at all; it can go up, it

[02:44] can go down, and the return depends on the market. In fixed income investments, even though fluctuations, in most cases you have good predictability of how much you

[02:56] will receive in the end. This provides security, especially for those who are starting out and want to sleep peacefully at night. Before showing you the fixed income cycles , I'm going to explain some terms to make

[03:08] the video easier to understand, okay? So let's go. Profitability is how much your money will earn on that investment. It can be a fixed value like 10% per year or tied to some index like CDI or inflation. The timeframe is

[03:23] how long you will leave your money invested. Some investments withdraw your money at any time, while others only return the initial investment after 2 or 3 years. It depends on what you invest in, right? And the risk in fixed income, the risk

[03:37] is generally low, but it still exists. For example, will the pay you until the end? This is called credit risk, which we'll talk about in a moment. Regarding savings, there is, of course, a big difference. Many people

[03:51] still leave money sitting in savings accounts, thinking it's safe, but in practice savings accounts yield very little, often even below inflation, value over time. In other words, you're safe, but losing money, well, that doesn't work

[04:05] safe, but losing money, well, that doesn't work , does it? Well, today, in 2025, 0.5% on the average. Basic fixed-income investments, such as CDBs or Selicer Treasury bonds, cost almost double that, with the same

[04:18] or even greater security. To give a comparative example, if you leave R$ 10,000 in a savings account for a year, you will earn around R$ 600, or even less. But with a CDB that pays 110% of the CDI, that amount can reach R$ 1,000 or more in

[04:33] earnings. So you can already understand the difference a little bit, right? Let's do the following, then. Keep this simple definition in mind. Fixed income is when you lend money to someone and receive it back with interest. It

[04:47] offers predictability, security, and usually yields more than a savings account. It's the ideal starting point for anyone who wants to start investing Let's start with the pre-fixed return. With a fixed-income investment,

[05:03] you already know exactly how much you will receive at the end of the investment. For receive at the end of the investment. For example, a Certificate of Deposit (CDB) with a 12% annual return, if you leave your money invested until maturity, will earn

[05:15] exactly 12% per year, no surprise there . This type of investment is advantageous when interest rates are high and the trend is for them to start falling. This way you lock in a good rate and guarantee above-average returns for a

[05:29] good amount of time. Now let's talk about the postfix. In this type of investment, the return depends on some economic index, usually the SELIC or CDI. This means that profitability can vary over time, following the

[05:43] behavior of the interest rate, okay? And finally, we also have we also have hybrid profitability, which mixes a fixed component and a variable component. The most common one is the one that uses the IPCA,

[05:57] which is the official inflation index in Brazil. In other words, you receive the inflation rate plus a guaranteed fixed rate . Have you already understood what fixed income is and how it can be a great entry point into

[06:10] investing? Let's delve into the main types available on the market. And the first one, of course, is a favorite: Tesouro Direto (Brazilian Treasury Direct). Tesouro Direto is a federal government program where it lends money directly to the

[06:23] National Treasury, that is, to the government itself, which uses this money to finance public works, infrastructure, health, education, and so on. And in exchange for this loan, the government will pay you back money in the future with interest. Of course. And

[06:36] because the government is responsible for paying you, it's considered one of the safest investments in Brazil. Because if he doesn't pay you, it's because Because if he doesn't pay you, it's because Brazil went bankrupt, and then well, that's it, right?

[06:48] You can invest in Treasury Direct in a very simple way. You just need to open an account with a brokerage firm or a bank that offers this type of service. You go there, choose which security you want, and the amount you want to invest. It

[07:00] usually has quite low prices. And that's it, investment. OK. It's extremely simple. There are three main types of bonds in the Brazilian Treasury Direct program, and each serves a different purpose. Let's understand them one by one. Treasury Selic. It is

[07:15] ideal for emergency reserves. The Silic treasure is the simplest and safest of the three. It yields according to the Selic rate, which is the basic interest rate of the economy. Just as an example, the CELIC rate currently, in 2025,

[07:28] So the advantages are that it is very it's perfect for keeping your emergency fund, and you can withdraw it at any time without significant losses; it has high liquidity, redemption is

[07:41] usually within one business day, predictable returns, and very low risk. As a practical example, consider what you would do if you invested R$ 5,000 in Treasury Selic bonds. With the SELIC rate around 15%, you will receive something around R$ 750 in

[07:56] gross income. And with a regressive tax, the net amount comes to around R$ 600, depending on the term. So it's a great income for a low risk, right? It yields the inflation rate for the period as measured by the IPCA, plus a fixed rate of PCA +

[08:10] 5.6% per year. This means that it protects your purchasing power, even if inflation rises significantly. It's an ideal investment for those thinking about retirement, their children's education, and long- term goals, like buying a property or something

[08:24] 10,000, or R$1,000 in a Treasury 10,000, or R$1,000 in a Treasury IPCA+ 2045 bond with IPCA plus 5.6%, that's also a great investment and you're protected from inflation. But be aware that this bond's value

[08:38] fluctuates if you sell it before maturity, so ideally you should hold it until the fixed-rate treasury bond, which is good in high-interest rate scenarios, where the rate of return is already locked in from the

[08:50] moment you buy it. Current example: a pre-fixed rate of 11.3% per year, maturing in 2027 . In other words, if you invest R$ 1,000, you already know exactly how much you will have at maturity. It's a great choice when interest rates are high and you believe they

[09:03] will fall in the coming years. Warning: just like with IPCA+, if you sell before the deadline, you may lose money. So, use the fixed-rate option when you know you can leave the money untouched until maturity. Summary of practice. Celi Treasury bonds are

[09:16] great for short-term savings, emergency reserves, long-term treasury and PCA+ protection, and contemplation. And the fixed-rate treasury bond, high interest rates, fixed returns at maturity. So, if you want a safe, accessible investment that

[09:29] can fit different goals, Tesouro Direto (Brazilian Treasury Direct) is an . Now that you understand Treasury Direct, let's move on to the next types of fixed income investments. Starting with the famous CDBs, the

[09:43] famous CDBs, the fixed-income security issued by banks to raise money. When you invest in a CDB (Certificate of Deposit), you are basically lending money to the bank, and in return,

[09:56] it pays you interest. It's as if the bank were saying, "Hey, lend me R$ 1,000, and I'll pay you back R$0 in a year." I would make that deal. It's a very good deal. And who issues the CDB? Only banks can

[10:10] issue CDBs (Certificates of Deposit). It's very important that you have this information. Large banks often offer Certificates of Deposit (CDBs) with lower returns, but with greater perceived security. Medium-sized or small banks offer Certificates of Deposit (CDBs) with higher interest rates to

[10:23] attract investors, but this doesn't necessarily mean they have all the necessary security. There are three options. A post-fixed CDB, for example, a CDB yielding 110% of the CVI, yields more than the SELIC rate, for example. So more is more common and

[10:38] safer for beginners. We also have the fixed-rate CDB, where you know exactly how much you will earn in the end. For example, investing at a rate of 12% per year, regardless of what happens to the SELIC or CDI rates, you will receive 12% per

[10:52] year. It's advantageous, especially when interest rates are high and you want to lock in interest rates are high and you want to lock in that rate. We also have inflation-linked CDBs, that rate. We also have inflation-linked CDBs, or CDB+ IPCA or IPCA+. You

[11:05] 'll see this terminology being used there , which is exactly what was said before, it's a hybrid form, right? The IPCA (Brazilian inflation index) plus fixed interest, just like the IPCA+ Treasury bond that was already mentioned, IPCA+ 6% per year, for

[11:20] example, you would receive the value based on the IPCA, the inflation, of the year, plus that 6%. It's great for protecting your feelings about the decline in purchasing power and also for protecting your own purchasing power. in the

[11:34] long term. It's still uncommon among smaller banks, but smaller banks, but any problem in the larger, more well-known banks. That's a possibility, okay? It's very important that you keep this in

[11:47] mind. The main advantage of a CDB (Certificate of Deposit) is the guarantee from the FGC, the credit guarantee fund . The CDB (Certificate of Deposit) is protected by the FGC (Credit Guarantee Fund), which covers up to R$250,000 per CPF (Brazilian individual taxpayer registration number) or

[12:00] institution. Well, we might even make a video about the FGC in the future, but there's this tip for you all. So, let's look at some examples of advantages of a CDB (Certificate of Deposit): higher returns than savings accounts, simple and accessible through banks and

[12:15] brokerage firms, high liquidity in some cases, which is great for an emergency fund as well, and, obviously, as already mentioned, the protection of the FGC (Credit Guarantee Fund). Now, the thing you need to be careful about with a CDB is liquidity. Not all CDBs allow for

[12:30] mentioned earlier, and returns can also vary depending on the type of CDB and the bank's risk profile. The higher the return, the greater the perceived risk. Although you are compensated by the FGC protection in many cases, it is very

[12:45] important that you look for a reputable bank to truly have full protection. Some smaller banks may be putting your capital at risk. In conclusion, the CDB (Certificate of Deposit) is one of the most popular fixed-income investments among

[12:58] Brazilians. It's a form of fixed-income higher returns than savings accounts, want easily accessible

[13:10] and understandable returns, want passive income and investment protection from the FGC (Brazilian Deposit Insurance Fund), and also want to diversify their options in terms of timeframes and

[13:22] objectives, and diversify their portfolio. So, what exactly are LCI and LCA? These are fixed-income securities issued by banks, similar to CUDBs, but with a specific purpose. LCI

[13:35] finances the real estate market. LCA finances agribusiness. When you invest in LCI or LCA, your money is used to boost these sectors of the economy. And what's the advantage of that, right? The advantage is income tax exemption

[13:50] for individuals. That's right, 100% of your earnings go into your pocket. Practical example. You invest R$ 10,000 in an LCI (Real Estate Credit Bill) that yields 100% of the CDI (Interbank Deposit Certificate). If the CDI rate is 10% per year, you earn R$ 1,000 in one year, tax-free.

[14:06] Compared to a CDB (Certificate of Deposit) yielding 110% of the CDI (Interbank Deposit Certificate), it would yield almost the same, but after deducting income tax. In conclusion, if an LCI or LCA pays 95% or more of the CDI, it's already

[14:18] more worthwhile than many common CDBs. And those who issue them, just like with CDBs, are the banks that issue LCIs and LCAs. Larger banks offer lower rates, but with perceived security. Smaller banks offer higher rates to attract

[14:33] investors. Let's look at the types of profitability. LCI and LCA can be profitability. LCI and LCA can be post-fixed and are linked to the CDI. For post-fixed and are linked to the CDI. For example, 96% or 100% of the CDI rate is

[14:45] fixed at the time of application, for example, 10% per year, 9% per year, it depends a lot. Linked to inflation, which is the IPCA (Brazilian consumer price index), they are rarer, but they still exist, okay? Deadlines and liquidity. Here's the point to pay attention to. LCI and LCA typically

[15:00] have minimum terms, usually 90 days or more. Some have daily liquidity, but they are quite rare, okay? Most only allow redemption at maturity, so they are not ideal for emergency funds. Yes, just like CDBs, LCIs and

[15:14] emergency funds. Yes, just like CDBs, LCIs and LCAs are protected by the FGC, up to R$250,000 per CPF, per institution, up to a total of R$1 million every 4 years. In other words, your money is safe if the bank fails within those limits. Let's then make

[15:27] within those limits. Let's then make a comparison between CDB, LCI and LCA. Advantages of LCI and LCA. Income tax exemption, IFGC insurance, good medium-term options, and accessible through digital brokers. Now let's talk about the

[15:42] low liquidity, and most have fixed maturity dates that vary considerably between institutions. Profitability may be lower than a good Certificate of Deposit (CDB) or Treasury bond, depending on the offer. Conclusion. So,

[15:54] LCI and LCA are great options for those who want to avoid income tax, seek security and predictability, and are investing for the medium term, a minimum of 3 months. Of course, they are especially useful when the CDI is high and you find

[16:07] . Let's talk about debentures now. What are debentures? Debentures are debt securities issued by companies. In other words, you lend money directly to a company, and it promises to pay you back

[16:22] with interest in the future. It's like you 're the company's bank, so to speak, right? They are a clear and evident way for companies to raise money from the market without depending on banks. A practical example is to imagine that

[16:35] any energy company wants to build a solar power plant. He issues debentures paying, for example, 10% per year with a maturity of 5 years. You buy a debenture for an amount X, for example, R$ 10,000. After 5 years, you receive

[16:50] your money back with 10% annual interest plus accrued interest. So, it's nothing more than a loan you're making to private companies. Yes, we have simple debentures, which yield fixed interest, but there's also

[17:04] the possibility of hybrid interest , of being a hybrid investment. And it's very important to make it clear that there is an income tax levied on the debenture, right? We also have an incentivized debenture used to

[17:17] finance infrastructure, for example, energy, transportation, sanitation, communication, which, as the name suggests, is a way for the government to provide incentives; it is exempt from income tax for individuals,

[17:31] okay? So, in that case, it's an investment that's quite interesting for individuals, by long-term investors. In this case, its profitability can be pre-fixed, post-fixed, or hybrid, as mentioned before, okay? Remember, a

[17:46] pre-fixed rate already has a fixed interest rate, while a post-fixed rate is usually linked to the CDI, for example, and generally uses the IPCA plus a percentage on top, which is great for the long term. The higher the risk for the company, the

[18:01] higher the promised rate. It's good for you to keep that in mind. The higher the risk for the company, the higher the promised rate. Regarding the risks, it's very important, for example, to know that the debenture is covered by the FGC (Brazilian Deposit Insurance Fund), meaning that if the company goes

[18:17] bankrupt, you lose your money, so that's a huge risk. So, first of all, obviously, find out which company is issuing the dement and be aware of the risk involved as well. It's very important that you understand the

[18:30] company's financial health and risk rating to know if it's really worth investing your money in or not. This is a very important detail when we talk about debentures; liquidity and maturity are also

[18:42] lower liquidity. In this case, you can also sell before the secondary market opens, but the price will also vary. And it's obviously better to hold it until maturity, not

[18:55] withdraw it before, otherwise you 'll probably take a loss, okay? So when should you for those who already have an emergency fund, for those who have an understanding of risk and return, for those seeking above-average profitability with a

[19:09] long-term focus, and who don't need that income in the short term, right? For those who want to diversify outside of treasury bonds and also want to move away from banks, it's very important to consider DB; its great advantage is that it establishes a relationship between you and the

[19:23] company. There is no government interference there, and there is no interference from the banks. One of the great advantages is the potential for self-return as well. Another advantage is direct access to companies, and the possibility of income tax exemption,

[19:36] depending on the amount, in the case of those receiving incentives, right? And it can protect against inflation. She has inflation protection on hybrid debentures, right, indexed to the IPCA (Brazilian inflation index) plus inflation, obviously bringing with it disadvantages:

[19:48] low liquidity, risk of default, risk of the company getting into trouble, and also being much less accessible for beginners, okay? But for those of you who want to diversify and already understand the risk-

[20:02] return relationship, Zbent could be a great investment for you when it comes to fixed income, okay? But what are CRI and CRA? CRI stands for Real Estate Receivables Certificate. CRA, certificates and receivables from

[20:17] agribusiness. These are private securities issued by securitization companies that transform future receivables into reinvestment. It's like buying a small piece of the installments that someone else will have to pay in the future.

[20:29] Example of CRI. A construction company is selling several apartments, and the buyers will pay for them over 10 years. She anticipates this money by selling the rights to these future installments to a securitization company. This company then issues a CRI (Real Estate Receivables Certificate) which is purchased

[20:43] by investors. You, the investor, receive a return based on these monthly payments. Now, an example of CRA. A soybean producer sells their future production on credit. The brokerage firm buys this contract, issues a CRA (Certificate of Receivables from Agribusiness),

[20:58] offering you the opportunity to invest in this cash flow. Key features: private fixed income exempt from income tax for individuals. That's clearly the big draw. Profitability can be

[21:11] pre-fixed, post-fixed, usually linked to the CDI (Interbank Deposit Certificate), or the IPCA (Broad Consumer Price Index) plus interest. The advantages are, of course, income tax exemption, just like with incentivized debentures, good rates of return, often higher than a Certificate of Deposit (

[21:24] CDB), and access to the real estate and agribusiness sectors without needing to invest directly in these markets. Now for the disadvantages, right? It is not guaranteed by the FGC, just like the ASB. Liquidity is generally very low, making them suitable for those who can

[21:39] maturity. Credit risk depends on the soundness of the transaction and the company involved. And they are a bit more complex. It requires a more technical analysis of the ballast and structure. You can find CRIs and CRAS paying

[21:53] You can find CRIs and CRAS paying CDI + 2 or 4% per year, IPCA + 6% per year, or pre-fixed rates of 12 to 14% per year. These numbers are very attractive, but they come with risk and lower liquidity. Considering the direct treasury bond, with a fixed annual rate,

[22:10] this type of investment is not very attractive. However, it's important to remember that there's no issue of income tax. So, what is this indicated for, right? It is suitable for investors with a moderate to aggressive risk profile. Those who already have an

[22:23] emergency fund in place, of course, are aware of credit and liquidity risks, and are naturally seeking income tax exemption with good returns. Important tip. Before investing in CRI or CRA, read the product fact sheet. See what

[22:37] the collateral would be that would guarantee the bond, which companies are involved, what the credit rating is, which is the rating given by the agencies, right? Which company is the securitization company? Good securitization companies indicate greater security. In conclusion, CRIs and

[22:51] CRAs are great options for diversifying your fixed income portfolio and would increase net instability, as they are tax-exempt, but require caution. It has neither liquidity nor FGC protection. You're probably now wondering whether to choose

[23:05] You're probably now wondering whether to choose between LCI, LCA, or CRI/CRA. What tried our best to explain it, sometimes it can still leave you confused. For example, the LCI LCA, a real estate and agribusiness credit note issued

[23:20] real estate and agribusiness credit note issued by a bank, is guaranteed by the FGC (Credit Guarantee Fund), is exempt from income tax for individuals, and is simple and accessible for the beginner investor. It is used by banks to finance the

[23:32] real estate sector, in the case of LCI, or agribusiness, in the case of LCA. It generally has a lower return than CR CR, but with significantly lower risk. And previously mentioned, in this case, it is issued by securitization companies, not

[23:48] banks. It doesn't have the guarantee of the FGC (Brazilian Deposit Insurance Fund), and it's also exempt from income tax for individuals, but depending on the amount, it represents a purchase of future receivables. For example, installment payments for furniture or sales in

[24:02] agribusiness offer higher profitability, better risk, and less liquidity. And it is, obviously, recommended for more experienced investors with a moderate or aggressive risk profile. In summary,

[24:15] LCI and LCA are safer with FGC protection. CR and CRA bonds pay more, but involve more risk and require a more objective analysis. But both are great possibilities for you to invest in income. Pix. We've finally reached the end of our

[24:31] video. If you've followed along this far , congratulations. Now you know much more about Pix income than most people who are just starting You learned what Pixar income is, how it works, and the main types of

[24:45] it works, and the main types of income available, right? Direct Treasury, CDB, income available, right? Direct Treasury, CDB, LCI, LCA, debent, CRI, CRA. He also learned about fixed-rate, floating-rate, and hybrid investment options. That's right. And of

[24:59] course, we also talked about the risks, the timelines, the taxes, and how each type of investment might best fit your financial goals. And for all this, what do we ask for? We appreciate it if you could like,

[25:13] subscribe to our channel, comment, and share, okay? Take a look at the other videos there; you 'll definitely get a broader idea about investing. And obviously, in our ears here you learn more about

[25:28] day trading, swing trading, which is also very important, and Technical analysis. Thank you very much. So, until next time. Thank you very much. So, until next time. Until next time.