Who hasn’t bought or doesn’t know someone who has a habit of buying capitalization bonds? Quite popular, capitalization bonds have the appeal of being forced savings, offering returns “close to” those of a savings account, and also drawing cash prizes. However, few people know exactly how a capitalization bond works. Each institution has its own rules, but basically, you should examine the waiting period, the loading fee, the drawing fee, the penalties for canceling or failing to pay the monthly installment on the capitalization bond, and the prize.
It is important to note that the interest rate does not apply to the total amount paid, but to the amount paid minus the loading fee and the drawing fee, and 20% income tax is charged on returns exceeding the contribution. In addition, if you win a drawing, there is also a 25% income tax deduction from the prize.
Capitalization bonds should not be viewed as investments, but rather as a game. However, since this game involves your money, it is important to know exactly what the rules are before deciding to play.
To better understand capitalization bonds, Procon answered the most frequently asked questions:
1. In practice, how can capitalization bonds be understood?
Capitalization bonds can be understood as participation shares in a type of “contest” that has periodic drawings and prizes. Part of the amount collected is used to pay the prizes, and another part is set aside (reserved) for redeeming the bond, in whole or in part.
There are several types of capitalization bonds; some draw prizes, while others draw cash amounts.
2. Are capitalization bonds investments?
Capitalization bonds are not investments, like stocks, savings accounts, or fixed-income funds, since their primary purpose is to give consumers opportunities to compete for prizes.
3. Can someone who withdraws recover everything they paid?
No. Someone who withdraws from a capitalization plan paid in installments is entitled, after a certain number of installments, to receive a proportion of the mathematical reserve accumulated. In other words, only part of the reserve set aside for redemption, which does not correspond to the total amount paid.
The fewer installments are paid, the lower the percentage to which the person who withdraws is entitled.
Capitalization plans offered by banks generally establish long contribution periods (up to 50 months), and in many of them, withdrawing before one year makes any redemption impossible.
Proper proof of the payments made is required for redemption.
4. Who regulates capitalization plans?
Capitalization plans are regulated by the Superintendence of Private Insurance (SUSEP), which approves their terms in advance and grants them an authorization certificate.
Like insurance policies, capitalization plans cannot be marketed directly by capitalization companies, but rather by licensed brokers or agents.
Just like banks, capitalization companies are also subject to the rules established by the Consumer Protection Code.
