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Why longer Treasury IPCA bonds are paying less interest?Photo by AlexanderGrey on Pexels
Business
Investments

Why longer Treasury IPCA bonds are paying less interest?

cbn14 September 2026 at 22:57

Listener Flavia sent a question to the CBN Dinheiro program, aired on Monday (14th), about the behavior of interest rates on Tesouro Direto bonds. She noticed that the Tesouro Prefixado with maturity in 2032 has a higher rate than the Tesouro Prefixado with maturity in 2029, however the Tesouro IPCA with maturity in 2040 has a lower rate than the Tesouro IPCA with maturity in 2032. Her question was whether the interest on fixed-income investments should not always be higher as the maturity date increases.

Expert Marcelo d'Agosto responded that, in a normal situation, yes, investments with longer maturity should have higher interest rates than investments with shorter maturity. In market jargon, this relationship between maturity and profitability is called the "yield curve."

The justification for this relationship is that, when the investor gives up liquidity for a longer period, they should receive a premium in the form of higher compensation, even though they can dispose of the investment at any time, as happens with Tesouro Direto bonds.

The expert also explained that the longer the bond's maturity, the greater the mark-to-market oscillation, meaning the greater the variation in the bond's value during the period until maturity, which represents an additional risk for the investor that should be compensated with higher interest.

Why this matters

The Brazilian investor who invests in Tesouro Direto needs to understand that the relationship between maturity and profitability is not automatic, avoiding decisions based solely on the expectation that longer bonds always pay more interest. The inversion of the yield curve directly affects the fixed-income allocation strategy, especially for those investing in IPCA-linked bonds.

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