Are you a risk-averse investor, someone who tends to avoid risk or has a conservative to moderate risk profile? If so, Government Securities (SBN) could be the right choice for you. SBN are bonds issued by the Government of Indonesia and therefore, carry a low level of risk.

SBN consists of two main types: Government Bonds (SUN) and Government Sharia Securities (SBSN). Apart from their management basis (conventional or sharia), SBN can also be categorized by their coupon type, fixed or floating, and by their tradability tradable or non-tradeable.

So, which SBN is suitable for each type of investor? The answer depends on your financial goals related to the product. If your financial goal is long-term and does not require flexibility in cash flow/liquidity, or if the funds invested in SBN are idle funds that you don’t need to withdraw anytime soon, then choosing non-tradeable instruments such as SBR (Saving Bonds Retail) or ST (Sukuk Tabungan) would be ideal. These products feature a floating coupon rate with a guaranteed minimum (floor), meaning the coupon rate will increase in line with Bank Indonesia’s benchmark rate but will not fall below a predetermined level. They come with a minimum tenor of two years and offer partial redemption options according to a specified schedule.

Conversely, if you need flexibility in cash flow, then tradable SBN would be a better option, for example: ORI (Obligasi Ritel Indonesia) – fixed coupon, Government Bonds FR Series (Fixed Rate) – fixed coupon and Government Bonds VR Series (Variable Rate) – floating coupon. However, retail investors can only purchase FR and VR series bonds in the secondary market. In the primary market, these bonds are generally targeted at institutional investors, with a minimum purchase value of IDR 1 billion. In the secondary market, however, the minimum purchase value for FR and VR bonds varies depending on the platform—some platforms offer a minimum purchase of IDR 1 million, the same as the minimum purchase for ORI.

Understand Interest Rate Movements for Optimal Investment

Besides financial goals and cash flow flexibility, another important factor in choosing SBN is interest rate movement. Understanding how interest rates move can help optimize your SBN investment returns. When interest rates are expected to rise, investing in floating-rate bonds will be more profitable. Conversely, when interest rates are expected to fall, investing in fixed-rate bonds will yield better results.

Another important principle in investing is diversification—don’t put all your eggs in one basket. Diversification doesn’t always mean investing in other instruments such as mutual funds or equity; it can also mean buying various SBN instruments. For example: diversifying between tradable and non-tradeable bonds, or diversifying by tenor, such as 2 years, 4 years, or 5 years.

In general, investing in Government Securities (SBN) is a safe and profitable investment. The tax on SBN interest/coupons is lower than that on bank deposits—10% for SBN compared to 20% for deposits. However, investing does not mean being free from risk. Investing in SBN carries market risk, which is related to interest rate movements, as well as liquidity risk, since SBN cannot always be sold quickly. Therefore, it is essential to conduct regular reviews to ensure that your portfolio and investment performance remain balanced and resilient.

The relatively stable returns of Government Securities (SBN) are often used as a foundation in an investment portfolio to balance other investment instruments such as stocks or mutual funds. However, regular portfolio reviews and prudent management remain essential to minimize the risk of loss. For example, an unexpected need for funds may require selling a small amount of ORI (Retail Government Bonds) before maturity, which could result in a loss if secondary market prices have declined. Therefore, it is crucial to plan and manage your investment portfolio carefully so that the returns from your SBN investments remain optimal.

Easy SBN Investment through Growin’ by Mandiri Sekuritas

Be sure to invest through a trusted securities company that is registered and supervised by the Financial Services Authority (OJK). With more than 25 years of experience, Mandiri Sekuritas provides easy access to investment through its innovative digital platform: Growin’ by Mandiri Sekuritas. Through this platform, investors can purchase SBN easily. Visit growin.id, download Growin’ from the App Store or Play Store, or access Growin’ through Livin’ by Mandiri for your investments.

For more information, contact: nonequityproduct@mandirisekuritas.co.id