Introduction to Deposit Certificate

CDB pre and post fixed (banking deposit certificates) issued by the financial Institutions, are a kind of products that have attributes that constitute the unique features of this type of private issue negotiated in the Brazilian market.

These products allow withdrawal transactions in advance, partial or total. When these types of transactions are generated, it is necessary to make transactional entries, because some of these entries are necessary to include within the functionality of the Temenos Transact system to cover the regulatory requirement demanded by Brazil.

CBD products are classified as pre fixed and post fixed. These products allow partial or total withdrawal transactions in advance .

The information for the registration of CDB arrangements in Temenos Transact is shared with CETIP and CETIP sends the CEITP code information, which is updated in Temenos Transact.

CDB products are created according to the Brazilian market conditions. All the products have the following:

• New property types
• New properties
• New tax rates
• Basic rate and basic interest
• Periodic interest
• New soft property class
• New balance types
• New enquiry
• New product conditions
• New product group
• New products
• Maturity

The benefits of this functionality are:

• CDB will help the client to do safe investments in the bank.
• It can be used as a warranty for the loans.

CDB products are classified as pre fixed and post fixed, both products have in common many features as:

• Full operation deadline
• Quantity of days in one year
• Minimum batch bond quantity on Issuance
• Quantity of dealt bond
• Invested amount
• Redemption value
• Issuance unit price (PU)
• Interest payment
• Operation rate
• Update of amount invested
• Redemption
• Quantity of days in one year to be consider for accounting
• Equivalent operation rate for accounting
• Tax incidence
• Grace period
• During the maturity of the CDB or any early redemption, the CDB will collect taxes called:
  • IOF (tax on financial transaction) this tax is calculated over the interest earned and it is collected if the maturity of the CDB or any early redemption is made within 30 days. This tax is applied on the basis of a regressive chart where the rates decrease daily up to the period of 29 days.
  • IR (Income tax), this is calculated over the interest earned and the IOF tax if apply. This tax is calculated based on a staggered table where the discount rate is reduced as the time elapses.
• Liquidity – The CDB needs to be defined if will or not have liquidity:
  • With liquidity - The customer (owner) is allowed to request full or partial redemption before maturity.
  • Without liquidity - The customer (owner) is not allowed to request a full or partial redemption , if it allows, then there will be a penalty (%) to apply over the interest to pay.
• Restriction Period - It is the period in which the CDB will not be redeemed (period between: CDB issuance plus this period).
  NOTE: If the customer wants to make an early withdrawal during this period, the system will apply a penalty even if the condition of liquidity is defined as With Liquidity.
• Locked amount - It is the CDB value that is locked.
• Lock Indicator - Indication of whether or not the CDB is blocked, and what type.
  • L = Free (available for redemption)
  • C = Within the restriction period
  • BT = Total Blocked
  • BP = Partial Blocked
  NOTE: The types L and C are automatically managed by system. The others are informed through interfaces.
• Judicial order identifier - This field will only carry a content if the field Lock Reason is equal to J or JG, because it informs the number of the judicial order that determined the blockade
• Number of the BACEN Protocol of the Judicial Order- This field will only carry a content if the field Lock Reason is equal to J or JG, because it informs the number of the protocol from Brazil’s Banco Central, referring to the Judicial Order that determined the blockade.
• Number of the Block Sequence from BACEN - This field will only carry a content if the field Lock Reason is equal to J or JG, because it informs the number of the Block Sequence from Brazil’s Banco Central System, referring to the Judicial Order.
• Number of the Block Sequence Reiteration from BACEN - This field will only carry a content if the field Lock Reason” is equal to “J” or “JG”, because it informs the number of the Block Sequence Reiteration.

During the creation of the CDB, if the customer accept the conditions, the system will calculate and present the following information:

• Invested amount or principal amount applied
• Number of days
• Accounting equivalent rate

Click here to understand the terms and abbreviations used in this functionality.