Define: CDI Rate

In a contract, the CDI Rate is a defined benchmark used to set floating interest. CDI stands for Certificado de Deposito Interbancario, the interbank deposit certificate, and the CDI Rate is the average rate at which banks in the Brazilian market lend to one another overnight. Financial agreements reference it so that interest, returns, or charges track prevailing short-term market conditions instead of being locked to a single fixed number.

What the CDI Rate means in a contract

When a clause pegs a payment to the CDI Rate, it is choosing a variable, market-driven reference. The benchmark rises and falls with monetary conditions, so an amount expressed as "CDI plus a margin" or "a percentage of CDI" changes over the life of the deal. This gives both parties pricing that stays connected to the cost of money, which is why the rate appears in deposits, loans, and intercompany funding arrangements where fixing a rate for years would be unrealistic.

Where the term appears

The CDI Rate is most common in banking and treasury documents. It is used to price the return payable under a deposit agreement, and it appears in loan facilities, financing schedules, and intercompany balances across the finance sector. Because it is a recognized market benchmark, parties often prefer it to a bespoke formula, since an independently published rate is harder to dispute.

How the rate is defined and measured

Drafting a CDI clause is mostly about precision in the mechanics. The parties should specify the source of the published rate, the compounding or averaging method, the day-count convention, and how often the rate resets. General guidance on locking pricing mechanics into an agreement is illustrated in this note on how to create a rate lock agreement, which shows why the reference source and reset timing must be unambiguous.

• Reference source: name the published series relied on and the entity that calculates it, so the figure is verifiable.
• Reset frequency: state whether the rate is read daily, monthly, or at set periods, since this changes the effective cost.
• Fallback: provide for what happens if the benchmark is suspended, replaced, or unavailable on a given date.

Why the exact wording matters

A floating benchmark only works if the reading is objective. If the clause fails to name the exact source or the averaging method, two parties can each compute a different "CDI Rate" for the same period, which turns a routine interest calculation into a dispute. A percentage of CDI behaves very differently from CDI plus a spread, so the arithmetic must be spelled out with a worked example where possible. The clause should also anticipate discontinuation, because benchmarks can be reformed or withdrawn, and a contract with no fallback can be left without a usable rate.

Drafting considerations

Define the rate by reference to its published source, fix the day-count and compounding conventions, and set out reset dates and rounding rules. Add a fallback mechanism and, where the numbers are significant, include an illustrative calculation so both sides read the formula the same way. Coordinate the drafting with the people who will apply it, since finance teams can confirm the reset cadence and reconciliation approach used in practice. Because the CDI Rate is a market benchmark rather than a term the parties control, the agreement should describe it accurately and leave interpretation to the law governing the contract rather than attempting to redefine the benchmark itself.