Understanding the Types of Retail Bond Investment

In the current financial wave, retail bonds or government bonds are forms of investment in the rupiah currency that widely attract investors. Aside from the relatively higher coupon value compared to the interest rate of fixed deposits, retail bonds in Indonesia are considered low risk investment as they are guaranteed by law and issued directly by the Government of the Republic of Indonesia to fund the State Budget.

Investors who purchase retail bonds will get coupons as fixed income each month and receive the entire principal value of the investment at maturity. Retail bonds are only sold during a certain period, so it’s important to learn what types are available before you decide to start investing in retail bonds.

Types of Retail Bonds

• Obligasi Negara Ritel (ORI)
  ORI can be traded with other investors in the Secondary Market, opening the potential for capital gains if the principal value increases. ORI is a government retail bond sold exclusively online and is supported by the e-SBN platform.

• Savings Bond Ritel (SBR)
  SBR has floating coupons, meaning the initial coupon value at the time of sale is the minimum value until maturity, but it has the potential to increase in the future referring to the BI 7 Day Reverse Repo Rate every three months, which allows greater profits. SBR cannot be resold but has an early redemption facility or partial redemption of the principal value of the investment after a certain period of time.

• Sukuk Tabungan (ST)
  Managed without containing elements of maysir (gambling), gharar (obscurity), and usury (usury), and declared sharia-compliant by the National Sharia Board of the Indonesian Ulema Council (DSN-MUI). Like SBR, ST has a floating coupon and has an early redemption facility.

• Sukuk Ritel (SR)
  SR is managed with sharia principles and can be traded to other investors in the Secondary Market, offering potential capital gains.

To start investing in retail bonds, you need a Single Investor Identification (SID) or investment ID number that confirms you are officially registered as a capital market investor. The registration process is easy, simply by opening the Bonds page on the digibank by DBS Application and filling in your personal data. After that, you just need to wait for the email confirming that the SID is active.

You can also easily purchase retail bond products online through the digibank by DBS Application, whenever and wherever you are. Find comprehensive information on each product on the app or discuss with us so you can make timely and confident decision to invest in retail bonds.