It was recently reported that the guarantee of the Credit Guarantee Fund (FGC) went from $ 70,000 to $ 250,000. Without a doubt, this is great news.
For those who do not know, the FGC guarantees the amount invested in certain financial investments, in case of breakdown or liquidation of the financial institution where the money is invested.
The purpose of this article is to present the Credit Guarantee Fund, highlight which financial investments are the object of the guarantee provided by the FGC and finally to raise several doubts about this private entity.
What is the Credit Guarantee Fund?
The FGC is a private, non-profit entity intended to administer credit protection mechanisms against credit institutions. Our Federal Constitution stipulated the creation of a fund to protect the popular economy, guaranteeing credits, applications and deposits up to a certain amount. The constitutional article was repealed, but the entity was still created.
Under the protection of depositor argument, an insurance structure would increase public confidence in financial institutions and, as a result, avoid bank runs.
What credits are guaranteed by the FGC?
Only the following financial assets are guaranteed:
- Demand deposits (cash “stopped” in checking account, for example) or withdrawable upon notice;
- Savings deposits;
- Time deposits, with or without certificate issuance (here included the CBD);
- Bills of Exchange (LC);
- Real estate letters (LI);
- Mortgage bills (LH);
- Real estate letters of credit (LCI);
- Repurchase operations related to securities issued after March 8, 2012 by related company.
One question many ask is: are government bonds not guaranteed by the FGC?
But there is no cause for concern. Government bonds are guaranteed by the National Treasury, with no limit on value.
What is the limit of coverage?
Although the FGC website indicates that the limit is still only R $ 70 thousand (visited on 13/05/2013), several specialized vehicles have reported that this limit has increased to R $ 250 thousand, since April 30, 2013. I don ‘ t know if its not on the FGC website yet because there is some approval pending or out of date. For this reason, in all the examples I will give, I will consider that the limit is still $ 70 thousand.
In any case, I believe this does not preclude the clarification of some doubts about this warranty. Come on!
If you have $ 110,000, and $ 60,000 is in bank A and $ 50,000 in bank B, and both break, how is your equity? The guarantee is by CPF / CNPJ and by financial institution. So even if your CPF is the same, you will receive $ 60,000 from bank A and another $ 50,000 from bank B.
Once you have Corelife Bank intervention, how long does it take for you to receive your money?
The time is required for the bank intervener to list depositors entitled to receive. Considering the history of interventions, the average period is two months.
If you have more than the limit applied (eg $ 90K), what happens?
You will receive from the FGC $ 70 thousand and the rest ($ 20 thousand) will have to wait for the bank’s liquidation. You will join the group of lenders and receive what is left for them. During the period between bank failure and FGC payment, does the money undergo any correction (profitability)? No. Between the bankruptcy and the payment by the FGC, there is no correction of values. Since this term is, on average, 2 months, the loss is not as relevant. Plus, just getting your money back will be a big relief?
Does the FGC pay the amount invested (deposited), plus the income agreed with the bank?
The FGC will pay the deposit balance (for example, the CBD is a deposit) on the intervention date. As the CBD interest is due, the balance will take into account the agreed rate, calculated until the intervention date. If you invested $ 50,000 and your balance on that date was $ 54,500, this is the amount that will be paid to you.
For this reason, it is not advisable to apply the limit, but a value of approximately 80% of it if you intend to leave the amount invested for 2 years, for example. For each additional year, discount 10% of the initial application.
Now that you know which fixed income applications are guaranteed by FGC, prioritize them. If you want to invest in any fixed income asset that does not have such coverage (debentures or LCA, for example), always require a higher return, precisely to compensate for the lack of collateral. Finally, I always find it important to recommend the eBook Investing Money. In addition to explaining each fixed and variable income financial application in detail, you also know the best strategies for investing your money and improving your profitability.