LCI and LCA are fixed-income investments issued by financial institutions and traditionally known for their exemption from income tax for individuals. With the new taxation proposal as of 2026, Many investors want to understand what will change in practice, how this affects profitability and whether these bonds are still worthwhile.
In addition to being conservative options within fixed income, LCI and LCA tend to attract entrepreneurs and investors looking for profitability with the protection of the Credit Guarantee Fund and lower tax impact. The question now is how these products will behave in the face of the new 5% tax proposed for securities that are currently exempt.
In this guide, you will understand what LCI and LCA are, how they work, what their advantages and limitations are, what will change with the new taxation in 2026 and how to compare these investments with alternatives such as CDB and savings accounts.
Quick summary: what changes with LCI and LCA in 2026
- LCI finances real estate; LCA finances agribusiness.
- Today, income is exempt from personal income tax.
- The proposal for 2026 foresees taxation of 5% on income.
- Even with the tax, LCI and LCA can still remain competitive.
- For legal entities, these bonds no longer have the same tax advantage as for individuals.
What are LCI and LCA?
LCI stands for Letra de Crédito Imobiliário and LCA for Letra de Crédito do Agronegócio. Both are fixed-income securities issued by banks and other financial institutions to raise funds that will be directed to specific sectors of the economy.
In the case of LCI, the funds are earmarked for real estate financing. In the case of LCA, the funds are used for agribusiness operations. From the investor's point of view, the two products work in much the same way: you lend money to the financial institution and receive interest in return.
These securities are often compared to CDBs because they are also part of bank fixed income. The major historical difference has always been the exemption from income tax for individuals, a factor that has helped make LCIs and LCAs very attractive in various market scenarios.
Complete Guide:
LCI and LCA made easy:
How does it work in practice?
When investing in an LCI or LCA, the investor invests funds for a set period and receives a return that can be fixed, post-fixed or hybrid. In many offers, the rate is linked to the CDI, such as 90%, 95% or 100% of the CDI.
In practice, this means that the bank uses the money raised to finance real estate or agribusiness operations and pays the investor according to the contracted rate. In return, the investor must respect the term of the product and, in many cases, the grace period for redemption.
Example:
If an LCI pays 95% of the CDI and the CDI is around 13% per year, the approximate gross return would be 12.35% per year. For individuals, this yield has historically been net of income tax under the current rules.
In addition, LCI and LCA are covered by the Credit Guarantee Fund, respecting the limits in force per financial institution and per CPF. This feature increases the perceived security of these fixed-income products.
Advantages and disadvantages of LCI/LCA
Advantages
- Income tax exemption for individuals under the current rules;
- protection from the Credit Guarantee Fund within the limits in force;
- generally low risk compared to more volatile investments;
- returns that are often competitive with CDBs and savings accounts;
- a good alternative for a reserve or conservative portfolio with a defined term.
Disadvantages
- lower liquidity than products with daily redemption;
- need to respect grace or maturity period;
- the nominal rate doesn't always beat good taxed CDB offers;
- reduced tax advantage for legal entities;
- with the new taxation, the net gain tends to fall compared to the current model.
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Are LCI and LCA still worth it?
In many cases, yes. Even with the proposed taxation of 5% from 2026, LCI and LCA can still be good options for investors looking for security and competitive net returns.
The decision depends on the rates offered at the time of application, the term, liquidity and comparison with other fixed income products. An exempt bond always has a significant advantage over taxed products, and even with reduced tax this difference can continue to exist in various scenarios.
In other words, the right question is not just whether LCI and LCA are “no longer worth it”, but in which situations they continue to be more advantageous than CDB, savings or other alternatives.
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Taxation of 5% from 2026: what changes in practice
The main change proposed is the end of the total exemption for individuals in these securities. As of 2026, the idea is to apply a 5% rate on income from LCIs and LCAs, as well as other securities that are currently considered incentive bonds.
In practice, this means that the investor will no longer receive 100% of net income. Even so, the proposed taxation is much lower than that applied to traditional fixed-income investments, which follow a regressive table and can be taxed between 15% and 22.5%, depending on the term.
Before: total exemption for individuals.
From 2026: proposal for a 5% income tax.
Practical effect: reduction of advantage, but not elimination of competitiveness.
Therefore, the real impact will depend on the contracted rate and the comparison with other products available on the market at the time of the decision.
Individuals vs. legal entities: what entrepreneurs need to know
An important point for entrepreneurs is that the tax advantage of LCI and LCA has always been more relevant for individuals. For legal entities, these securities don't have the same tax benefits and are usually treated in the same way as other fixed-income investments.
This means that many businesspeople evaluate LCIs and LCAs mainly for individuals, while for the company's cash flow the comparison usually needs to consider other investment alternatives, liquidity and taxation.
In other words, the correct analysis changes greatly depending on who the investor is: the individual entrepreneur or the company's legal entity.
LCI and LCA vs. CDB and savings account
| Product | PF Taxation | Liquidity | Observation |
|---|---|---|---|
| LCI/LCA | Exempt today; proposed 5% in 2026 | Usually smaller | Good relationship between security and net profitability |
| CDB | Regressive income tax table | Can have daily liquidity | Flexible, but subject to higher taxation |
| Savings | Exempt | High | Lower profitability in many scenarios |
This comparison shows why LCI and LCA are still relevant: they occupy a very interesting middle ground between security, yield and simplicity. Even with the new taxation, the analysis needs to be based on the final net return.
Frequently asked questions about LCI and LCA
Are LCI and LCA still exempt from income tax?
Under the current rules, yes, for individuals. The proposal for 2026 foresees taxation of 5% on income.
Do LCI and LCA have FGC protection?
Yes, these securities are covered by the Credit Guarantee Fund, within the limits in force per institution and per investor.
Are LCI and LCA worth more than CDB?
It depends on the rate offered, the term and the liquidity. In many cases, the tax advantage makes LCI and LCA deliver competitive or superior net returns.
Can companies invest in LCI and LCA?
Yes, but legal entities don't have the same tax advantage as individuals. That's why the analysis for corporate cash needs to consider this point.
How to assess whether this investment makes sense
- compare the rate offered with CDBs and other fixed income alternatives;
- note the grace period and maturity of the bond;
- analyze the difference between investing as an individual and as a legal entity;
- consider the 2026 tax change in the net income account;
- avoid deciding solely on the exemption or the name of the product.
This analysis is especially important for entrepreneurs seeking greater efficiency in cash management and the temporary allocation of resources.
Compare PF vs. PJ
with tax on dividends
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