If the Selic stops at 13.75%, how much will R$200, R$500 or R$1,000 be invested in CDBs over five years?

On the eve of the next meeting of the Central Bank’s Monetary Policy Committee (Copom), which will decide next week how much the Selic will be, investors are doing their math. The dominant bet among financial agents is that the basic interest rate will be maintained at 13.75% per year, the level it reached in August, ending the cycle of increases that began a year and a half ago. If that happens, how much will the Bank Deposit Certificates (CDBs), common and affordable fixed income papers, start to yield in the next few years?

It is necessary to remember that remaining at 13.75% or reaching 14% per year now in September, interest rates will not remain static. They will change over time as needed to fight inflation. Therefore, adopting a single rate to estimate earnings over the next two, three or five years may not reflect reality.

So, how do you know how much an investment of BRL 200, BRL 500 or BRL 1,000 will yield in five years? The answer lies in the yield curve, which reflects financial market expectations for rates in the future.

A simulation carried out by Michael Viriato, chief strategist at Casa do Investidor, for the InfoMoney helps to estimate the gains that investors can make. He used as a reference data from the Brazilian Association of Financial and Capital Markets Entities (Anbima), collected this Wednesday (14), referring to the priced rates for the next five years on the yield curve.

The expectation for the CDI rate – a fixed income profitability indicator that closely follows the Selic – in a year considered in the simulation was 13.4979%. For two years, it was 12.3119% and for three, 11.7918%. For four years, the CDI estimate was 11.6763% and for five, 11.7115%.

If you invested R$ 200 today in a CDB that offered a remuneration of 100% of the CDI, the investor would receive R$ 321.44 in five years later. The value is net of taxes. Such amount would represent a gain of almost 61% in relation to the amount initially invested.

On the other hand, if it were not possible to wait so long to carry out the redemption and it was necessary to withdraw the money after one year, the final net amount received would be R$ 222.27. After two years, it would reach R$ 244.05. Check the details below:

Return on investment of R$ 200 in CDB that offers 100% of the CDI

DeadlineCDI Expectation (% pa) Gross final value net final value
1 year13.4979 BRL 227.00 BRL 222.27
2 years12.3119 BRL 252.28 BRL 244.05
3 years11.7918 BRL 279.42 BRL 266.37
4 years11.6763 BRL 311.08 BRL 292.02
5 years11.7115 BRL 347.95 BRL 321.44

Source: Michael Viriato, chief strategist at Casa do Investidor, based on data from Anbima as of 09/14/22.

Read more:
• Maximum profitability of CDBs reaches up to 122% of CDI, but average rates decline in the last fortnight

The final amount grows if the amount initially applied is higher. If the investor chose to invest BRL 500, he would have BRL 803.60 after five years, as indicated in the table below:

Return on investment of R$ 500 in CDB that offers 100% of the CDI

DeadlineCDI Expectation (% pa) Gross final value Net final value (discounting the IR)
1 year13.4979 BRL 567.49 BRL 555.68
2 years12.3119 BRL 630.70 BRL 610.13
3 years11.7918 BRL 698.55 BRL 665.92
4 years11.6763 BRL 777.70 BRL 730.05
5 years11.7115 BRL 869.88 BRL 803.60

Source: Michael Viriato, chief strategist at Casa do Investidor, based on data from Anbima as of 09/14/22.

With an initial investment of BRL 1,000, it would be possible to redeem BRL 1,607.20 after a period of five years:

Return of a CDB that offers 100% of the CDI over time after investing R$ 1 thousand

DeadlineCDI Expectation (% pa) Gross final value Net final value (discounting the IR)
1 year13.4979 BRL 1,134.98 BRL 1,111.36
2 years12.3119 BRL 1,261.40 BRL 1,220.25
3 years11.7918 BRL 1,397.11 BRL 1,331.84
4 years11.6763 BRL 1,555.41 BRL 1,460.10
5 years11.7115 BRL 1,739.76 BRL 1,607.20

Source: Michael Viriato, chief strategist at Casa do Investidor, based on data from Anbima as of 09/14/22.

The rates extracted from the yield curve reflect a change in expectations in recent days. Until the beginning of last week, much of the market believed that it would be possible to start cutting the Selic as early as the first quarter of 2023, after successive downward revisions in inflation forecasts for this year and next.

Bets, however, were “pushed forward” after statements by Roberto Campos Neto, president of the Central Bank, and other leaders last week, who helped to “throw water in the beer” of financial agents.

The toughest speech was made by Bruno Serra, director of monetary policy at the Central Bank, who reinforced his concern about inflation expectations for 2024 during an event last week.

Although optimism with the beginning of a cycle of cuts in the first quarter of 2023 has been reduced in recent days, part of the agents maintain the view that the Central Bank will start cutting interest rates next year. This is the case of Itaú.

According to a report released this week, the house reinforced that it expects an interest rate cut in the second half of 2023. In the house’s projections, the Selic could end 2023 at 11% per year. As the yield curve calculation takes into account estimates from other houses, the data may present different results.

Matching the goal with the deadline

In addition to the yield of CDBs, the investor needs to pay attention to the investment term. The reason: if it is necessary to sell the security in advance, it will be necessary to negotiate with the issuer to repurchase the security and it is very likely that the investor will have to pay a spread (fee) that makes this exit less favorable.

For this reason, Viriato recalls that it is important to “match” the investment objective with the maturity of the CDB. The expert notes that people have a tendency to invest with longer terms or higher rates, but stresses that this can lead to errors.

“If the investor already has a plan for using the money, failing to look at the deadlines tends to have a higher cost”, ponders the professional, saying that the investor may have to ask for an early exit and suffer some penalty on the part of the investor. of the issuer.

In addition, there is always the risk of reinvestment – ​​that is, the chance of not being able to obtain remuneration equivalent to the previous one or in better conditions than the current ones. “If you have already invested thinking about the term, the risk of reinvestment tends to be lower”, he adds.

Read more:
• How to reinvest Treasury Direct bonds, CDBs and other securities? End of the Selic rise poses challenges

emergency reserve

Another important factor that investors need to pay attention to when allocating in CDBs is building an emergency reserve – or liquidity, as Viriato prefers to call it.

In practice, the emergency reserve is made up of resources that must be invested in products that are easy to redeem, in the event of an unforeseen event.

For CFP financial planner Letícia Camargo, the amount left in the emergency reserve should be equivalent to something between six to 12 months of salary, depending on a few factors: type of job, regularity of employment income and financial commitment to payment. person’s.

After analyzing your profile, the investor should look for the best options available in the market. In Letícia’s view, among them are CDBs that offer 100% of the CDI, with daily liquidity and issued by large banks, in addition to public securities such as the Selic Treasury and DI funds.

When talking about daily liquidity CDBs, the allocator says that the preference is for large banks because the credit risk is low, as they tend to have a good risk rating (rating).

“It’s no use having an emergency reserve in a CDB 100% of the CDI, even if it has daily liquidity, from a fragile and bankrupt bank. This is because the investor will have to wait for the FGC to act, if the investment is up to R$ 250 thousand”, recalls Letícia.

CDBs are covered by the Credit Guarantee Fund (FGC) – a type of “insurance” that returns up to BRL 250,000 per investor (CPF) and financial institution, up to a ceiling of BRL 1 million renewed every four years. .

In the case of the DI fund, Letícia recommends that investors look for products with zero management fees. After all, the management fee takes up part of the profitability.

The Selic Treasury, in turn, may be interesting for investors who want to invest, especially, amounts up to R$10,000. The reason: if the allocation is below this amount, the investor will not have to pay a custody fee, in the amount of 0.20% per year.

Another point of attention is in the rescue. The planner reminds that, if the investor wants to redeem the amount and place the order before 1 pm on business days, he will be able to receive the amount invested in the Selic Treasury on the same day (D+0, in economic jargon). After this period, the money will only be credited to the account on the next business day (D+1).

In general, Letícia advises investors to leave the emergency reserve spread across various types of investments, precisely because there are differences during redemption and to better take advantage of opportunities.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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