Bank Deposit Certificates (hence the acronym CDB), are nothing more than a loan you make to a bank, so that it lends the money to someone.in.
Paulo Gala, chief economist at Banco Master de Investimento, explains in more detail:
“When you buy a CDB, you are lending your money to a bank, which is an organization that specializes in granting loans to other people. In this case, the bank assumes a debt contract with you (the CDB), at the rate and period that were pre-established. The bank, in turn, puts the money on its own balance sheet and lends it to its customers at its own rates. The risk of these new loans is with the bank. And the risk of not getting paid by the bank is up to you”.
This risk, however, is very low, due to the FGC that protects the investor and his investments.
“The CDB’s are guaranteed by the FGC, which is the Credit Guarantee Fund, in the amount of up to R$ 250,000. This is a system created by the Brazilian financial system, in which banks are required to deposit a percentage of the investments they receive in the FGC, so that the system can help investors in the event of a default,” says Gala.
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Source: CNN Brasil
A journalist with over 7 years of experience in the news industry, currently working at World Stock Market as an author for the Entertainment section and also contributing to the Economics or finance section on a part-time basis. Has a passion for Entertainment and fashion topics, and has put in a lot of research and effort to provide accurate information to readers.
