What is a CDB and how does it work? See today's value and yield

What is CDB and how does it work is a common question among investors, especially beginners. CDBs are one of the most traditional fixed-income securities issued by banks and are great choices for those starting out in the world of investments. 

What is CDB and how does it work

When starting out in the world of investments, people come across many important concepts in order to achieve good results in the market. One of the main doubts is: what is a CDB and how does it work?

Most people have heard of CDBs, even if they have nothing to do with investments. These are fixed-income investments with a higher return than savings accounts. These securities appeal to investors because of their security.

These securities are considered the safest on the market. Because of this, CDBs are often the favorite of those who are just starting to invest. However, before investing in these products, it's important to know more about this type of investment.

The CDB, which stands for Certificado de Deposito Bancário, is a financial investment that works like a loan to the bank. In other words, the institution issues securities to sell and, by buying them, investors are lending the money to finance operations. 

It's worth noting that this dynamic works for most fixed-income securities. What varies are the products available, as well as the payment method and interest rate, giving investors more choice. 

According to data released by B3, the Brazilian Stock Exchange, in the period from December 2020 to March 2022, the number of CDB investments grew by 20%. And anyone can invest in these securities, as long as they understand how the market works. 

What are the types of CDB?

Before you start trading in CDB securities, it's important to know that there are different types. Their characteristics are different, such as maturity date, minimum contribution, grace period and yields. However, when it comes to profitability, there are three categories:

• Prefixed;
• Post-fixed;
• Hybrid (less common model). 

1. Prefixed

Fixed-rate bonds have a pre-established yield. This means that, regardless of the Selic rate or inflation, the return will be fixed and determined at the time of purchase. 

2. Post-fixed

Most CDB securities have this configuration. Investors may come across different terms, such as CDB BI or CDB CDI, but one very important term is: CDI (Certificado de Depósito Interbancário). 

Every day, banks issue short-duration bonds with the aim of closing the day's balance in the black. The logic is quite simple to understand: it looks like the Bank Certificate of Deposit, but without the investors. 

In addition, CDI yields are usually higher than savings rates. Therefore, the average rate is usually an excellent standard for taxing market products, as is the case with CDBs. 

3. Hybrid 

The yield obtained from hybrid bonds works like a combination of pre-fixed and post-fixed. In general terms, the yield adds up to a rate that doesn't change with the index, which is variable (such as the CDI or IPCA). 

What are the advantages of CDBs?

Now that you know more about CDBs, you can probably imagine some of their advantages. One of the most important is the security and stability of the securities. But these aren't the only ones. Check them out below:

• Greater security: As mentioned above, CDB securities are guaranteed by the Credit Guarantee Fund. This way, investors are protected if anything happens to the bank;

• Daily income: One of the biggest advantages of a CDB is undoubtedly the daily income in the account. In addition, the amounts are usually higher than in traditional savings accounts;

• Practicality and ease of investment: By buying CDB bonds, investors can make their money go further without a lot of bureaucracy. This is because the entire procedure is done online, whether on a cell phone, tablet or computer;

• Simple redemption: Investors can redeem the amount at any time after the grace period. That way, they don't lose out on the income.

What are the disadvantages of CDBs?

Like any investment, CDBs have advantages and disadvantages. Income tax can be considered one of the product's disadvantages, but it is important to calculate the net income from operations. 

Another disadvantage is the maturity of the securities, which usually range from three months to five years. However, there are some exceptions, such as products with daily liquidity. 

It's worth noting that the deadlines are set by the financial institution. To avoid unforeseen liquidity problems, investors need to create a reserve in highly liquid investments.

How to invest in CDB securities

In principle, investing in CDBs through brokers has more advantages. Some options allow you to carry out the entire operation from the comfort of your home, i.e. all trading is done over the internet. 

1. Open your account: To start trading CDB securities, the first step is to open an account with a secure broker. Simply enter the details requested and create a login and password;

2. Transfer the amount: As soon as you open your account with the broker, transfer the amount you want to invest in CDB securities. Remember that the transfer will be made via TED with the same ownership; 

3. Access the platform: When you access their platform, you can find various services and products offered by the broker. In the case of CDB, find the "Fixed Income" option; 

4. Choose the security: This is the most important moment. Before trading, check out all the CDS options available. If necessary, use an investment simulator. That way, you can see how much your money could yield; 

5. Make the investment: Last but not least, once you have studied the options available, make the investment in the model that suits you best. Remember to consider your investor profile. 

Once you've completed these steps, you'll be a CDB investor, taking a new step towards financial organization and earning a return on your investment.