The Central Bank decided on Wednesday to maintain the base interest rate, the Selic, at 13.75% per year. This is the second time the Selic rate has been held in the year, following a string of highs that lasted since April 2021, to contain inflation in the country.
Although the Selic rate has not increased, bond investors continue to benefit as the rate remains high.
Part of fixed income investing is rate related. Income from savings, on the other hand, remains frozen, and loses profitability for even the most conservative fixed income investments. See below how much BRL 1,000 yields in savings and other investments with the Selic rate maintained at 13.75%.
What’s going on with Selic maintenance?
Selic-linked investment options remain attractive to investors, such as the Selic Treasury, a federal government bond that tracks the base interest rate.
Investments that follow the remuneration of the CDI (Interbank Certificate of Deposit, commission levied in transactions between banks) are also interesting, such as CDBs and DI funds.
Savings, on the other hand, loses profitability compared to these two options. It maintains a yield of 0.5% per month plus the reference rate (TR). Thus, the return on savings today is 6.17% per year, plus the TR.
This account is valid when the Selic is above 8.5%. With the Selic below this level, the savings yield 70% of the Selic, plus the TR.
See below how 1,000 BRL yields in different applications, with the Selic rate at 13.75%. The calculation was made by the financial consulting firm Yubb.
The calculation considers an income tax rate of 20% on taxed investments (Selic Trésor and CDB). Commission is paid on redemptions made between 181 and 360 days. If the redemption is made after one year, the tax is 17.5%. If this is done within six months, the rate is 22.5%.
How much does R$1,000 earn with the Selic rate at 13.75%?
- Savings: BRL61.70
- CDB: Between R$81.90 and R$125.60 (depending on the bank)
- Treasure Selic: BRL 109.20
How much can the investor withdraw in one year with Selic at 13.75%:
- Savings: BRL 1,061.70
- CDB: Between 1,081.90 BRL and 1,125.60 BRL (depending on the bank)
- Treasury Selic: BRL 1,109.20
It is important for investors to also pay attention to the behavior of inflation, as this impacts the actual gain from their investments.
The inflation expectation for 2022, according to the Central Bank’s October 23 Focus bulletin, is 5.60%. This is the data used by consulting firm Yubb when calculating the actual yield of each app discounted for inflation.
See the actual performance of certain applications, taking inflation into account:
- Savings: BRL5.40
- CDB: Between R$24.50 and R$65.90 (depending on the bank)
- Treasury Selic: BRL 50.40