Educational article

Brazilian Treasury bonds: Tesouro Direto complete guide

Understand Tesouro Direto bond types, inflation and interest-rate risk, taxes, fees, liquidity and mark-to-market from Treasury and B3 sources.

Brazilian Treasury bonds: Tesouro Direto complete guide

Brazilian Treasury bonds (Títulos Públicos Federais) are debt securities issued by the National Treasury to raise funds for public projects. The Tesouro Direto program, run in partnership with B3, allows individuals to buy these government bonds directly through online platforms. This guide explains product types, mechanics, costs, and risks without recommending specific bonds.

For context on where these bonds fit in a broader investment strategy, see our CDB investment guide, Brazilian stocks overview, and fixed income overview.

TL;DR

  • Tesouro Direto offers three core return structures: Fixed (Prefixado), inflation-linked (IPCA+), and Selic-linked, each with different interest-rate and inflation exposure.
  • Mark-to-market risk is real: Selling before maturity means receiving the market price, which can differ from the original purchase value based on rate changes.
  • Taxes and fees apply: A regressive income-tax rate (22.5% to 15%) and a 0.20% annual custody fee (0% for the first R$10,000 in Selic) affect returns; institutions charge additional fees.

What is Tesouro Direto?

Tesouro Direto is the Brazilian federal government's program to sell retail bonds directly to individual investors. Launched in 2002, it replaced the need to buy government securities through fixed-income funds. Investors can purchase treasury bonds through banks, brokerages, or directly via portal, with minimums often starting at R$ 2 (Tesouro Direto official site).

The program operates on two pillars:

  1. Market liquidity: The Treasury guarantees daily repurchase of bonds on business days (Tesouro Direto rules).
  2. Transparency: Prices update throughout the day based on secondary market activity, not just auction levels.

The custodian and settlement agent is B3, which provides custody and operational infrastructure. The National Treasury issues the obligations and guarantees payment.

Bond types and return structures

Tesouro Direto offers bond categories tied to different indices or rates:

Tesouro Selic (LFT)

Return formula: Daily variation of the Selic rate.

Tesouro Selic tracks Brazil's benchmark interest rate. Your return reflects accumulated Selic changes during the holding period. It is the most liquid option with typically the lowest price volatility, suitable for emergency reserves and short-term goals.

Key characteristics:

  • Post-fixed yield tied to Selic
  • Payment at maturity (no periodic coupons)
  • Lowest mark-to-market risk among the three main types
  • Used as a reference for short-term cash management

Tesouro Prefixado (LTN)

Return formula: Fixed rate preset at purchase.

Tesouro Prefixado offers a predetermined rate fixed at purchase. Held to maturity, the investor knows the exact gross return in advance. The standard version pays all principal plus interest at maturity.

There is also Tesouro Prefixado com Juros Semestrais (NTN-F), which pays interest every six months and returns the principal at maturity.

Key characteristics:

  • Fixed nominal yield
  • Inflation risk: If IPCA exceeds the fixed rate, real returns may be negative
  • Interest-rate risk: If market rates rise after purchase, the bond's market price generally falls
  • Suitable for known-future-date goals on fixed calendar

Tesouro IPCA+ (NTN-B Principal)

Return formula: IPCA inflation index + fixed interest rate.

Tesouro IPCA+ protects purchasing power by linking returns to Brazil's consumer price index (IPCA) plus a fixed real rate at purchase. The standard version pays all principal and accumulated return at maturity.

Tesouro IPCA+ com Juros Semestrais (NTN-B) pays semiannual interest and returns principal at maturity.

Key characteristics:

  • Hybrid return: inflation protection plus real yield
  • Main risk: substantial mark-to-market volatility, especially for long maturities
  • Suitable for long-term goals like retirement or education funding beyond 10 years

Maturity, duration and rate exposure

Bond maturity is the date when the issuer repays principal. Tesouro Direto offers maturities from 2025 to 2055 and beyond, with new issues created through auctions (B3 technical information).

Duration measures price sensitivity to interest-rate changes. Longer-duration bonds experience larger price swings:

  • Tesouro Selic: Short effective duration; price moves little with rate changes
  • Tesouro Prefixado: Duration equals time to maturity; sensitive to new rate levels
  • Tesouro IPCA+: Complex duration combining inflation and nominal rate components

Inflation exposure

  • Prefixado bonds have only nominal exposure. If IPCA rises above the fixed rate, the real return can be negative.
  • IPCA+ bonds provide built-in inflation protection. The IPCA component adjusts the nominal return, preserving purchasing power.
  • Selic bonds inherit inflation risk indirectly through the real return: nominal Selic minus inflation.

Interest-rate exposure

  • Prefixado: Direct exposure. A rate increase after purchase lowers the bond's market price.
  • IPCA+: Real rate component faces similar exposure to Prefixado.
  • Selic: Exposure diminishes over time but can fluctuate daily with rate volatility.

Mark-to-market: selling before maturity

When you sell a Tesouro Direto bond before maturity, the Treasury repurchases it at the prevailing market price, which reflects:

  • Selic rate expectations (for Selic bonds)
  • Yield curves for fixed-rate bonds
  • Market inflation expectations for IPCA+ bonds

The price formula for a fixed-rate bond approximates:

P=F(1+y)tP = \frac{F}{(1 + y)^t}

Where $P$ is price, $F$ is face value, $y$ is market yield, and $t$ is time to maturity.

Example scenarios

ScenarioResult
Market yields rise after purchaseBond price falls; early sale may realize a loss
Market yields fall after purchaseBond price rises; early sale may realize a gain
Held to maturityContractual return applies regardless of interim price

Daily valuation timing

Trading operates Monday through Friday, 9:30 a.m. to 6:00 p.m. (Tesouro Direto rules). Requests for redemption:

  • Before 1:00 p.m.: credited same day to the financial institution
  • After 1:00 p.m.: credited next business day
  • Submitted after market close, weekends, or holidays: processed at opening price next business day

Taxes on Tesouro Direto returns

Brazilian tax rules apply a regressive income-tax rate on Tesouro Direto gains. The rate depends on the holding period:

Holding PeriodIncome Tax Rate
Up to 180 days22.5%
181 to 360 days20%
361 to 720 days17.5%
Over 720 days15%

Source: Receita Federal IR table 2025

IOF (Financial Operations Tax)

IOF applies only to redemptions within 30 days. It is calculated on yield and reduced by IR withholding. After day 30, IOF no longer applies.

Tax application points

Taxes are withheld at redemption, coupon payments, or maturity. The tax base is the gain (yield), not the invested principal. Each coupon payment triggers its own holding-period calculation.

Fees: custody and institution charges

B3 custody fee

B3 charges a custody fee of 0.20% per year on Tesouro Direto holdings (B3 custody fee schedule):

  • Pro rata daily from settlement date (D+1)
  • Deducted from redemption or maturity proceeds

Special rule for Tesouro Selic: Holdings up to R$ 10,000 per CPF are exempt from the custody fee. Only the amount above R$ 10,000 incurs the 0.20% annual charge (Tesouro Direto rules).

Institution fees

Financial institutions (banks, brokerages) may charge their own fees for:

  • Account maintenance
  • Transaction or brokerage fees
  • Advisory or platform access

These fees are negotiated between the investor and the institution. Check the B3 fee schedule for reference ranges.

Liquidity: daily redemption vs. secondary market

Tesouro Direto provides daily liquidity through the Treasury's guaranteed repurchase program. Key operational details:

ParameterDetails
Trading hoursWeekdays 9:30 a.m. to 6:00 p.m.
Settlement after saleSame day if before 1:00 p.m., next business day after
Weekend/holiday ordersProcessed at next business day opening price
Minimum redemption0.01 bond unit or 1% of bond face value

Source: Tesouro Direto rules

What liquidity is not

  • Not a secondary market: You cannot sell to another investor; only the Treasury repurchases.
  • Price not guaranteed: Redemption price equals market value at transaction time, not purchase price.
  • Suspension periods: Four business days before semiannual interest payment, bonds are removed from the buying list. Two days before maturity or coupon payment, redemption is suspended.

Credit and sovereign risk

Tesouro Direto bonds carry sovereign credit risk—the risk that Brazil's federal government cannot meet its debt obligations. The country's credit ratings reflect this risk:

AgencyRating (as of 2024)Outlook
S&PBBStable
FitchBBStable
Moody'sBa1Positive

These below-investment-grade ratings mean Brazil government bonds carry more credit risk than AAA-quality debt. The risk is lowest among Brazilian fixed-income instruments but not zero.

Corporate bonds (debentures) in Brazil carry individual issuer credit risk. Government bonds benefit from national backing.

Common risks explained

Risk TypeWhat It MeansHow It Affects Your Investment
Interest-rate riskBond prices move inversely to rate changesFixed-rate bonds lose value if rates rise; held to maturity eliminates this risk
Inflation riskIPCA rises faster than bond yieldPrefixado bonds lose real purchasing power; IPCA+ protects against this
Mark-to-market riskSelling before maturity means receiving market priceExit price may be higher or lower than expected based on rate movements
Currency riskBRL exposure for foreign investorsReturns in reais convert differently to USD/EUR
Liquidity riskAbility to sell quickly at fair priceTreasury provides daily liquidity but at market-determined prices

Why mark-to-market matters

If you buy a Prefixado bond at 10% and sell after yields rise to 12%, the bond's market price falls below your purchase value. You realize a loss even though the nominal rate is competitive. Conversely, falling yields raise the bond's market price.

Common errors and fixes

ErrorCauseFixSource
Treating mark-to-market as guaranteed profitConfusing purchase yield with exit priceUnderstand that early sale returns market value, which can be lower than purchaseTesouro Direto rules
Ignoring the custody fee impactAssuming fees don't matter on small balancesCalculate net returns after the 0.20% annual fee (waived up to R$10,000 in Selic)B3 custody fee schedule
Believing IPCA+ guarantees real returnsForgetting about timing of rate realizationIPCA+ preserves purchasing power only if held; early sale still exposes to mark-to-marketTesouro Direto technical info
Misunderstanding tax ratesUsing outdated or broker-provided tablesApply current Receita Federal regressive rates based on actual holding periodReceita Federal IR table 2025
Assuming daily redemption equals instant cashNot accounting for T+1 settlementFunds from redemptions after 1:00 p.m. arrive next business dayTesouro Direto rules

FAQ

What are the minimum investment amounts? Purchases start as low as R$ 2 on the official platform, though minimums vary by bond offering and institution.

Are Tesouro Direto bonds safe from government default? No debt instrument is risk-free. These bonds carry sovereign risk—the possibility Brazil's government cannot meet obligations. They remain the lowest-risk option in Brazilian fixed income.

How is Tesouro Selic different from a savings account? Savings accounts (poupança) use a government-set rate. Tesouro Selic tracks the market-determined Selic rate, which responds to central bank policy. The two often move together but are calculated differently.

Can I lose money on a fixed-rate Tesouro Direto bond? Held to maturity, you receive the contractual amount regardless of interim price movements. Selling early means receiving the market price, which may be below your purchase value if rates rose.

What happens to my bond if interest rates drop after I buy a Prefixado? The bond's market value increases, but you must sell before maturity to realize that gain. Held to maturity, you receive the original fixed rate as agreed.

Are Tesouro IPCA+ bonds suitable for retirement planning? They are designed for long-term goals where inflation protection matters. Over 10–20 years, the inflation-adjusted real return preserves purchasing power better than fixed-rate bonds.

Sources

SourceWhat it contributes
Tesouro Direto official siteProgram overview, bond types, current offerings
Tesouro Direto rules and regulationLiquidity hours, settlement timing, redemption mechanics, custody exemption
B3 custody fee scheduleFee structure, exemption thresholds for Selic
B3 technical informationBond types, return formulas, maturity ranges
Receita Federal 2025 tax tableIncome-tax regressive rates, IOF rules
FundamentalRadar · educational information, not investment advice.