Many people are often confused about differentiating FR Bonds and Retail SBN. Both are indeed safe because they are issued by the government and their returns are guaranteed by the state.
However, each instrument has different characteristics and is suitable for different investment goals. Understanding the differences is very important so you choose correctly and your financial goals are achieved optimally.
If you’re interested in understanding both investments, read this article to the end!
What Are FR Bonds
FR (Fixed Rate) Bonds are government debt securities issued by the Government of Indonesia, offering a fixed coupon throughout the tenor. The coupon or interest on these Bonds is paid every six months, so investors can enjoy regular passive income.
Fixed Rate Bonds are usually sold in various series with tenors ranging from 5 to 30 years. They’re suitable for medium- to long-term investing.
The main advantages of this instrument are higher returns than time deposits, low tax (10%), and very high liquidity because they can be traded on the secondary market at any time.
Characteristics of FR Bonds:
Some characteristics of these Bonds are as follows:
- Fixed coupon, paid every 6 months.
- Can be purchased in the Primary Market as well as the Secondary Market.
- Long tenors—dozens of years.
- Minimum purchase starting from IDR 1 million.
- Highly liquid and can be bought/sold anytime without penalties.
- Stable returns and advantageous when interest rates decline.
What Is Retail SBN
Meanwhile, Retail SBN (Retail Government Securities) are government bonds issued specifically for individual investors. The goal is to expand ownership of government bonds among retail investors.
Retail SBN consists of several products such as ORI (Retail Government Bonds), SBR (Savings Bond Ritel), SR (Sukuk Ritel), and ST (Sukuk Tabungan), both conventional and sharia.
Coupons or returns on Retail SBN are generally paid monthly, with shorter tenors of 2–5 years.
Characteristics of Retail SBN
Some characteristics of Retail SBN are as follows:
- Coupon rates can be fixed or floating (depending on the type), paid monthly.
- Tenors between 2 and 5 years.
- Very affordable minimum purchase, starting from IDR 1 million.
- Not all Retail SBN can be traded on the secondary market (some like SBR/ST only allow early redemption).
- Products are designed specifically for retail investors, not institutions.
- Coupon tax is 10%, the same as FR bonds.
Key Differences: FR Bonds vs. Retail SBN
Below are the main differences between Fixed Rate Bonds and Retail SBN:
1. Issuer
Both are issued by the government. FR Bonds are intended for broad state financing and can be purchased by institutions as well as individuals, whereas Retail SBN are offered only to individual investors during specific offering periods.
2. Target Investors
FR Bonds are also open to institutional investors and individuals with larger capital. Retail SBN are aimed exclusively at retail investors so the wider public can help finance the state and gain access to safe investments.
3. Minimum Purchase
Both FR and Retail SBN offer a minimum purchase of IDR 1 million, but the maximum limit for Retail SBN is usually IDR 5–10 billion. FR can be larger, adjusted to institutional investors’ needs.
4. Coupon
FR always offers fixed coupons, while Retail SBN can be fixed (ORI, SR) or floating with a floor (SBR, ST). FR pays every 6 months; Retail SBN pays monthly.
5. Tenor
FR Bond tenors are much longer—5 to 30 years. Retail SBN are generally 2–5 years, making them suitable for short- to medium-term plans.
6. Liquidity
FR Bonds are very liquid and can be traded on the secondary market anytime, allowing potential capital gains if sold above purchase price.
Retail SBN ORI and SR can also be traded, but SBR/ST only allow early redemption up to 50% before maturity, so they cannot be traded on the secondary market.
7. Investment Purpose
FR Bonds are suitable for long-term goals such as retirement funds or inheritance, especially for investors seeking stability and fixed returns over long periods.
Meanwhile, Retail SBN—with shorter tenors and low entry capital—are ideal for the broader public for short-/medium-term plans such as savings, education, or emergency funds.
Which One Is More Suitable?
Choosing between FR Bonds and Retail SBN depends greatly on your goals, risk profile, and investment horizon. If the goal is retirement, inheritance, or investing for children over 10+ years, FR is more appropriate thanks to long tenor and stable coupons.
However, if you want routine investing with higher liquidity, monthly cash flow, shorter tenors, and small capital, then Retail SBN such as ORI, SBR, SR, or ST are better choices.
Investors are often advised to combine both in a portfolio as diversification: Retail SBN for short–medium needs, FR Bonds for long-term future needs.
So, FR Bonds or Retail SBN? Check Here!
FR Bonds and Retail SBN are both safe, state-guaranteed investments, but they have different characteristics, tenors, and mechanisms. FR Bonds suit institutional and individual investors with long investment horizons and high liquidity needs.
Meanwhile, Retail SBN are designed specifically for retail investors, providing low-capital access and monthly cash flow for short- to medium-term plans.
Recognizing your goals and risk profile will help you choose the most suitable instrument so investing runs optimally and worry-free.
With DBS Treasures priority banking, you can begin your Bond investment journey with greater confidence. These instruments provide regular coupons paid periodically, so you have a stable passive income stream.
Not only that, there is also an opportunity to obtain capital gains when you sell Bonds as market prices rise.
Another advantage that makes this investment even more attractive is the competitive coupons offered—higher than the average interest on time deposits. This means your potential returns can be more optimal without bearing excessive risk.
What’s more, every transaction is free of additional fees, so the entire gain remains yours.
You can transact at any time, 24 hours a day, 7 days a week, through a practical, secure, and transparent process in the DBS digibank app. In addition, you can buy, sell, switching, and even complete SID (Single Investor Identification) registration.
With DBS Treasures priority banking, you can also choose from a variety of Mutual Funds, whether from Fund Houses or Investment Managers, by product category or fund type.
You will also be supported by curated market analysis from a team of financial experts who will communicate it and provide the latest opportunities tailored to your risk profile and portfolio needs, powered by Artificial Intelligence/Machine Learning (AI-ML). These insights are complemented by curated solutions across investment (Grow) and insurance (Protect), enabling you to invest quickly and confidently through your preferred channel.
Start your FR Bond investment right away by clicking here. Feel free to diversify your investments!
