IPCA Treasury: know the investment that gains from inflation – 11/25/2021

It’s not news to anyone that inflation has scared a lot of people this year. The price of items such as gasoline, food, energy, among others, has risen. But while things are getting more expensive, did you know that you can protect yourself from high prices in an investment by Tesouro Direto?

Today’s column explains the Treasury IPCA, that is, the Treasury Direct investment that accompanies the rise in prices in Brazil. The video below brings a simulation of how much it would yield to apply BRL 100 per month in the investment.

The IPCA Treasury is a public bond. Therefore, when investing, one is lending money to the government. The latter undertakes to return your money in the future, on the so-called maturity date, plus interest.

The peculiarity of the paper is that, unlike the Prefixed Treasury, which has a fixed interest, and the Selic, which follows the basic interest rate, it is considered a hybrid investment.

Profitability is composed of a fixed interest, which does not change until the maturity date, and inflation variation (IPCA).

In other words, let’s assume that you invest in an IPCA Treasury that yields inflation plus 5% per year. This means that he will pay 5% a year of fixed interest plus the IPCA accumulated to maturity.

purchasing power

Precisely by following the rise in prices, the IPCA Treasury guarantees the maintenance of purchasing power. Let’s say you want to buy a car five years from now, currently valued at R$30,000.

Five years from now, when you go to buy it, you discover that the value is now R$45,000.

If you save a little every month targeting the R$30,000, but without correction for inflation, you will probably need to postpone the plans because you won’t have enough money.

But if you invest targeting the same BRL 30,000 and something that is corrected for inflation, it ensures that the amount saved will be updated with current prices.

Furthermore, fixed interest represents real income. In other words, money follows inflation and still yields at that fixed interest rate.

We know that in Brazil more years, less years we suffer from inflation. In order not to run the risk of seeing the money depreciate, it is interesting to have at least part of the portfolio in investments that accompany the rise in prices and the IPCA Treasury is an option.

Deadlines, Prices and Yield

I have just given an example of a short plan, for five years from now, but have you ever imagined longer ones, such as retirement? It’s almost impossible to predict how much things will cost. The IPCA Treasury has very long term options that are suitable for these cases.

The shorter bond expires in 2026 and offers an IPCA yield plus 5.14% as of the date of this column’s publication. The longest one expires in 2055 and pays IPCA plus 5.30%.

The rates offered at Tesouro Direto change every day. So, it could be that they are different when you are reading the column and decide to apply.

How to invest

To invest in the IPCA Treasury you must open an account at a brokerage. The good news is that you can mostly do this via the app or website and it takes less than 24 hours for the account to open.

In addition, nowadays many brokerages do not charge any fees to apply.

To start investing, just have around R$ 40, which makes the application very affordable.

Do you already invest in Tesouro Direto? Comment here or on our social networks (Instagram or YouTube).