What Is Happening With LCIs and LCAs?
The supply of LCI and LCA notes has shrunk sharply across banks, and yields have collapsed. According to research presented by William Ribeiro on the Dinheiro Com Você channel, real estate and agribusiness credit notes that previously paid above 94% of the CDI are now being distributed at levels near 88% of the CDI, or even lower, across the platforms of major brokerages and financial institutions.
This shift caught many retail investors off guard. Accustomed to seeking assets with the appeal of income-tax exemption, everyday investors began accepting progressively lower contractual returns without calculating whether the tax benefit still makes up for the difference compared to a traditional bank certificate of deposit (CD).
The contraction in rates turns the false sense of tax security into a yield trap. When the issuance of real estate and agribusiness credit dries up, or when banks find cheaper funding sources, the premium passed on to the retail investor declines. If individual investors fail to rerun the tax math, they end up locking away capital for long periods in instruments that clearly lose out to traditional taxed alternatives.
Why Have LCI and LCA Rates Dropped So Much?
The drying up of debt instruments backed by qualifying collateral reduced competition among issuing banks. As the Dinheiro Com Você channel explained, stricter regulatory rules for qualifying collateral on Real Estate Credit Notes (LCIs) and Agribusiness Credit Notes (LCAs) reduced the volume of new paper that institutions can place in the retail market.
With less need to raise funds through these specific instruments and with less approved inventory, bank distribution desks are lowering the compensation they offer. Rather than paying 93%, 94%, or 95% of the CDI to attract savers, banks have realized that retail investor demand remains strong even when delivering meager rates of 88% of the CDI.
Retail investor psychology helps sustain low rates. A widespread aversion to paying taxes leads many savers to choose any instrument stamped as tax-exempt without paying attention to the contracted rate. This behavior allows issuers to cut returns without losing inflows.
Does an LCI at 88% of the CDI Still Beat a Standard CD?
Over the vast majority of horizons, an LCI or LCA at 88% of the CDI loses to CDs yielding 100% or more of the benchmark. Fixed-income math is exact: the net yield of a tax-exempt instrument must be compared directly with the yield of a taxed instrument after deducting the progressive income tax rate.
To find the equivalent return of a CD compared to a tax-exempt note, divide the LCI rate by the tax-complement factor (1 minus the tax rate). Here is how the equivalence breaks down for an 88% CDI rate:
A CD must pay 113.5% of the CDI to match the 88% LCI.
The equivalent CD must deliver 110% of the CDI over this interval.
Any CD paying above 103.5% of the CDI already beats an 88% LCI over the long term.
Over longer horizons, the advantage of the 88% tax-exempt note nearly vanishes. If investors hold their funds for more than 720 days, the CD tax rate drops to its minimum of 15%. Over this time horizon, a CD with equivalent liquidity and banking risk that pays 104% or 105% of the CDI—something routine at mid-sized banks and investment platforms—puts more money in your pocket than an LCI or LCA contracted at 88%.
Watch out for minimum lock-up periods: LCIs and LCAs feature regulatory maturity restrictions that prevent early redemption during the initial months. Locking up capital without immediate liquidity to earn only 88% of the CDI doubly penalizes investors who need financial flexibility.
Who Is Most Affected by the Scarcity of These Instruments?
Small savers who use LCIs and LCAs as automatic substitutes for emergency reserves suffer the most losses. The generalized rate cuts strip away the primary competitive advantage of these notes over the short and medium term, forcing investors to rethink their fixed-income asset allocation.
While rates stood above 94% of the CDI, the tax exemption compensated for the lack of initial liquidity even over intermediate horizons. Now, with instruments trading at 88% or lower levels, investors who buy without running the numbers transfer return directly to the issuing bank's profit margin.
If you are seeing LCI or LCA offers in the 88% of CDI range, do not accept the note purely out of reflex against taxes. Compare it with the net rate of available CDs for the same maturity. For horizons exceeding a year and a half, the probability of a CD outperforming that net return is substantially high.
What to Monitor Before Investing in an LCI or LCA Now?
Before confirming any investment in a tax-exempt note, investors must demand a clear net-rate comparison benchmark. Given the structural scarcity pointed out by analysts, rates are likely to remain stuck at meager levels as long as demand stays high.
To avoid falling into the reduced-yield trap, three points require mandatory verification on your brokerage's home broker or app:
Real investment horizon — Check the maturity date. If the note extends beyond 2 years, demand tax-exempt rates well above 90% of the CDI to avoid losing to a CD taxed at 15%.
Equivalent CD calculation — Multiply the offered CD rate by (1 - income tax rate). If the result exceeds the LCI rate, the CD is the financially superior choice.
Lock-up period — Make sure you will not need the funds during the window when the instrument is entirely blocked from early redemption.
The Verdict: Is It Worth Accepting an LCI or LCA at 88% of the CDI?
Not for medium- and long-term horizons. As the Dinheiro Com Você channel emphasized, the decline in rates to the 88% range erodes the premium that justified giving up daily liquidity. Income tax exemption is a tax tool, not a certificate of a good deal. Without an adequate gross rate, investors simply leave money on the table for the benefit of issuing banks.