Tesouro Direto Selic: how does it work?

Have you heard of Tesouro Direto Selic? Learn more about this investment!

Tesouro Direto Selic is one of the main securities of Tesouro Direto, a National Treasury program developed in partnership with B3, the Brazilian stock exchange.

It is a highly recommended option for those who prioritize the security of fixed income, but at the same time, are not satisfied with the returns on savings.

Therefore, if you have already established some financial goals, whether short or long term, the Tesouro Selic may be a good option for your investment portfolio.

To help you, we have prepared a complete guide with everything you need to know about this investment!

What is Tesouro Direto Selic?

Tesouro Direto Selic is a public security whose profitability is linked to the basic interest rate of the Brazilian economy, the Selic rate.

Therefore, we are talking about a post-fixed fixed income investment.

When choosing a post-fixed security, you link your investment to a specific economic index, such as Selic or IPCA.

Therefore, it is not possible to know exactly what the final yield will be, as this depends on the fluctuation of the reference indicator.

The advantage, in this case, is that the profitability is always positive and if you wish, you can make an early redemption (before the title matures).

But the Selic rate also influences income of fixed income applications.

In general, the increase in the Selic rate benefits these investments, which offer investors a return based on interest.

This is the case with Treasury Direct bonds, CDBs, letters of credit, among others.

Likewise, when the Selic rate decreases, the returns on fixed income investments become less advantageous.

What is the Selic rate?

To understand how this type of investment works, you first need to know what the Selic rate is.

The Selic rate is Brazil's basic interest rate.

It represents the level of risk in our economy, as it tends to be close to the cost of raising Brazilian government debt on the market.

Furthermore, the Selic rate is a reference for the cost of credit lines in general. In other words, when it is high, the tendency is for loans and financing to become more expensive (with higher interest rates).

This means that when the Selic rate decreases, credit interest rates become lower.

What are the main features of Tesouro Direto Selic?

Among the main characteristics of Tesouro Direto Selic, we can mention:

It has an expiration date

Treasury Direct bonds, like other fixed income products, have a maturity date.

The maturity date on an investment is the date on which it will end and the money will be returned to you.

This is because when the government issues a bond and puts it up for sale on Tesouro Direto, it sets the date on which it will receive the paper back.

This way, at the maturity date, you will receive the money invested + the interest on the investment.

But it is important to remember that there will be taxation.

Minimum application value

This is one of the main questions for those who want to start investing in fixed income.

After all, what is the minimum investment amount?

Well, from R$ 30, you can now invest in Treasury Direct bonds.

You can see the government bond prices and rates here.

Liquidity

Liquidity, in the investment world, is a characteristic that represents how easy it is to convert it into cash.

The faster the process happens, the more liquidity the investment has.

Depending on the case, liquidity is not always an essential factor. For example, if you are looking to make a long-term investment, this may not be as important to you.

However, if you are investing in the short term or have purchased a Treasury Direct bond to save your emergency fund, liquidity is something very important to you.

The thing is, if you need the money urgently, you have to get it as quickly as possible, right?

Therefore, you need to know how to invest in the short, medium and long term, taking into account the liquidity needed to achieve your financial goals.

The good news is that the liquidity of Tesouro Direto Selic is considered high.

In other words, if you want to redeem the invested resource before the due date, you can do so without any problem.

The liquidity of this security is D+1. This means that after requesting redemption, the amount will be available in your account within one business day.

Profitability

The returns on Selic Treasury bonds correspond to the percentage of the rate over time.

Thus, the annual yield is the target of the rate.

This means that if the Selic percentage is at 9%, for example, this will be the profitability of the investment in that period.

After the last COPOM (Monetary Policy Committee) meeting, in February 2022, the Selic rate was 10.75% per year.

The Selic rate is defined every 45 days. In these decisions, it can increase, decrease or remain stable.

With this information, it is possible to make projections about the yields on Treasury Direct Selic bonds.

Taxation

Like other government bonds, Tesouro Selic is subject to Income Tax.

For IR, the rates are as follows:

• Up to 180 days: 22.5%

• From 181 to 360 days: 20%

• From 361 to 720 days: 17.5%

• From 721 days: 15%.

In addition to Income Tax, the Treasury Direct is subject to the Tax on Financial Transactions (IOF).

However, IOF is only applicable in the first thirty days of the application. Furthermore, it is calculated only on the income for the period.

Conclusion

Now you know what Tesouro Direto Selic is and the main characteristics of this fixed income investment.

If you want to diversify your portfolio with low-risk, high-yield investments, Tesouro Selic is a good option for you!