LCI - Real Estate Letter of Credit

Many people do not know, but LCI investments are completely free of fees and taxes and for this same reason, they have been on the radar of thousands of large investors in the country.

Not to mention that in recent years letters of credit have become increasingly accessible to any and all types of investors. Want to learn more about LCI? So keep reading this article till the end.

This is due to the simple fact that throughout it you will be able to have access to the best and main information about the investment in question, thus promoting a better understanding and knowledge about it.

What is an LCI application?

The Real Estate Credit Letter (LCI) consists of a fixed income investment issued by thousands of banking institutions.

The great differential of this investment is that all resources raised through investments in LCI are used to finance projects and activities in the real estate sector of the financial market.

In this way, the investment in LCI is nothing more than a loan that the investor makes to the bank to finance activities and in exchange for that, the institution can offer a return that can be prefixed, post-fixed or hybrid.

It is also interesting to remember that letters of credit always have a pre-established maturity date and through this date investors are able to have an idea of how much income they will have by the end of the term in question.

How do LCI investments work?

Investments made in LCI have been modified for a long time and nowadays it is something very accessible for thousands of investors in the market.

Bonds are issued by private banking institutions and offered on the market. In this way, LCI works like a loan made by the investor to the bank, which will use the capital to invest in thousands of projects in the real estate sector.

As it is considered a strategic segment, there is an income tax exemption for the investment.

For you to be able to invest in LCI, it is important that you have an account at a very active stockbroker, so that you can trade on the stock exchange and make thousands of investments.

What is the income of the LCI?

LCI income can be given in two different ways, namely: prefixed or post-fixed.

Here's how they both work:

— Fixed income:
Fixed income consists of a fixed rate of return. Like for example 4% per year.

That way, you can find out how much your money will yield by the end of the term (expiration date) at the time of purchase and negotiation.

— Post-fixed income:
Post-fixed yields, on the other hand, have a yield rate linked to an index, such as the CDI or the IPCA.

That is, this means that the issuing bank pays a percentage of the same index. Like, for example, a 103% CDI yield bond?

Tips for choosing a good LCI

Want to know how to choose a good LCI? Then follow the tips below:

Have a financial plan: Always have a financial plan so that you know how to manage your investment easily.

Know your investor profile: each investor has a different profile and it is very important to recognize which one is yours, as there are recommended investments for each of the profiles.

Choose your broker carefully: know how to choose very carefully the broker that will help you throughout your investment, because in addition to being safe, it must be recognized in the market.

By following these tips, you will find the LCI that suits you best and can be of benefit to you.