Investing in bonds, Is it okay or not?

5 Feb 2021 Written by: Redaksi OCBC NISP

That is the question we most often hear about bonds, so "What is the difference between bonds and deposits?"

Therefore, we must first understand how bonds work. Bonds are an investment instrument issued by an entity, such as a corporation and government to raise funds for the needs of the entity from investors.

Investing in bonds for income potential

Investors will receive a "coupon" or what is often called "interest" in deposits periodically, before then receiving the initial investment funds when the bonds mature.

For the business world, issuing bonds is an alternative way for companies to get funding other than through the stock market by holding Initial Public Offering (IPO) - the sale of company equity. For the government, issuing debt securities such as ORI, FR, and SBR is directly for the country's development.

From an investor's point of view, there are several advantages to investing in bonds over deposits, such as:

Potential changes in interest rates upon renewal after maturity The coupon rate is paid fixed until maturity
Interest is subject to 20% tax Coupon is subject to 15% tax
Cannot be traded Tradable on the secondary market
There is no potential capital gain Has the potential for capital gains or an increase in capital prices
Has an extension feature following interest at maturity Does not have an auto-renewal feature
LPS guarantees a maximum of IDR 2 billion per name There is no maximum * purchase amount of bonds on the secondary market
Tenor: 14 days, 1 month, 3 months, 6 months, 12 months Tenor: 1 to 50 years

*except for retail bonds offered in the primary market, for example: ORI and SUKUK where a maximum purchase of IDR 3 billion per name

In today's digital era, investing has been greatly facilitated by current technology so that bond purchases can be made online. Also, the amount to start investing in bonds is quite low - starting from as little as IDR 1 million! *

Here's a simple way to manage your wealth. Let's follow the steps:

  1. Click "Wealth Management" menu.
  2. Choose Investment product. Example: Mutual Fund or Bond.
  3. Upload the documents, complete customer data and risk profile.
  4. Choose your saving account that will be used to invest , then click agree to the terms and conditions.
  5. Input PIN or SMS Token and Clik Next Step.

So what are you waiting for? Check out how to buy bonds on the link below!

*Especially for prime retail bonds

Invest your fund in SR014 #InvestasiRakyatPenuhManfaat via ONe Mobile by accessing menu "Wealth Management", Program Period start from 26 February to 17 March 2021.

Coupon rate: Fixed coupon with coupon rate 5,47% p.a.

Minimum Order: Rp. 1 Juta

Maximum order: Rp. 3 Miliar

For further information, Click Here!

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