Rapid changes in stock prices can make investing challenging, especially for investors who are less comfortable with market volatility. If you find it difficult to deal with rapid stock price fluctuations or have a moderate-to-conservative risk profile, you may want to consider investing in Government Securities (SBN), which are generally considered more stable.

SBN are issued by the Government of Indonesia and offer returns according to the terms of the selected series. So, how does SBN investing work, and what should you consider before buying? Here's what you need to know. 

What Is SBN?

SBN, or Government Securities, are securities issued by the government. When you purchase SBN, you are essentially lending funds to the government and receiving returns according to the terms of the selected series. The funds raised are used to help finance the state budget (APBN) and support national development.

Understanding Retail SBN

Retail SBN are designed for individual investors and come in several types with different characteristics. In general, retail SBN consists of government bonds and sukuk. Some of the key differences include:

• Bonds: Pay coupons according to the terms of each series and do not follow Sharia principles.
• Sukuk: Follow Sharia principles and are structured using contracts that comply with applicable Sharia requirements.
• Tradable: Some series can be sold in the secondary market before maturity.
• Early redemption: Some series can be redeemed early, subject to specific terms and conditions.

Understanding ORI Investments

ORI, or Retail Government Bonds (Obligasi Negara Ritel), are SBN designed for individual Indonesian citizens. ORI offers a fixed coupon paid periodically and can be traded in the secondary market, meaning investors have the potential to earn a capital gain or experience a capital loss.

For example, ORI030 has 3-year and 6-year tenors, with fixed coupons of 6.9% and 7% per year, respectively, paid monthly. These terms apply specifically to ORI030 and may differ for future series.

How Do You Earn Returns from ORI?

Returns from ORI come from coupon payments made periodically. For example, a Rp10 million investment with a 6.9% annual coupon would generate approximately Rp57,500 per month before tax. The amount received after tax would be lower.

If you sell ORI before maturity, its selling price may be higher or lower than the purchase price. This means you could earn a capital gain or incur a capital loss.

What Should You Consider Before Buying SBN?

Before investing in ORI or other types of SBN, consider the following:

• Your investment goals and time horizon.
• The amount of money you plan to invest.
• The coupon rate and tenor.
• How easily you can access your funds.
• The type and terms of each SBN series.
• The risks involved if you sell the SBN before maturity.

Don't focus solely on a high coupon rate. Choose an SBN product that aligns with your financial needs and plans.

How to Buy SBN through Mandiri Sekuritas

Retail SBN can be purchased through government-appointed Distribution Partners. These include securities companies such as Mandiri Sekuritas and other financial institutions. These companies serve as official government Distribution Partners, allowing investors to purchase SBN offerings through their digital platforms, such as Growin' by Mandiri Sekuritas. 

In general, the process involves:

1. Registering for or having an account with a Distribution Partner.
2. Selecting the SBN series currently being offered.
3. Entering the desired investment amount.
4. Making the payment.
5. Waiting for settlement and confirmation of ownership.

For series available through Growin', you can select Bond, then SBN, choose the desired series and investment amount, and follow the payment instructions provided.SBN can be an important part of a diversified portfolio, but the right product should be selected based on your financial goals. Before investing, make sure you understand the tenor, coupon, liquidity, taxes, and characteristics of the product.

With Growin' by Mandiri Sekuritas, you can access a range of capital market instruments and monitor your investments through a single platform.

FAQ

Can SBN be inherited by heirs?

Ownership of SBN can be transferred to heirs in accordance with applicable legal and administrative requirements.

 

Can SBN investments be used as collateral?

Some SBN series may be used as collateral, subject to applicable terms and the policies of the relevant Distribution Partner.

 

Can foreign nationals purchase SBN?

Retail SBN such as ORI are intended for Indonesian citizens.

 

Can I purchase more than one SBN series?

Yes, as long as you meet the purchase requirements and maximum order limits for each series.

 

What happens if an investor dies before the SBN reaches maturity?

Ownership can be transferred to the investor's heirs in accordance with applicable legal and administrative procedures.