Saving Bond ST010 is officially offered with fixed return 6.25% (for 2 years maturity) and 6.40% (for 4 years maturity). Is the ST010 saving bond attractive as an investment option?

What type of saving bonds do you prefer? Investing in ST010 savings bonds with a 2 or 4 year maturity?

Saving Bonds ST010 is a sharia investment product that is offered by the Indonesian government to individual Indonesian citizens.

An investment in savings bonds is one that is secure, simple, cost-effective, rewarding, and a blessing.

There are two versions of ST010 available at launch: ST010-T2 and ST010-T4.

Characteristics of ST010

• Issuer: Government of the Republic of Indonesia
• Offering Date: May 12 - June 7, 2023
• Form: Without bank notes and non-tradeable
• First Coupon: Short coupon on July 10, 2023

Short Coupon is the first coupon that is distributed within less than one month after the settlement date (June 14, 2023), with the first coupon received having a lower value (in Rupiah) than the coupons that will be received in the subsequent months.

Characteristics of ST010-T2

• Nominal value per unit: IDR 1 million
• Minimum offer: IDR 1 million
• Maximum offer: IDR 5 billion
• Return: Floating, minimal 6,25% p.a
• Period : 2 years
• Maturity: June 10, 2025
• Early redemption: May 24 – June 3, 2024

Characteristics of ST010-T4

• Nominal value per unit: IDR 1 million
• Minimum order: IDR 1 million
• Maksimum order: IDR 10 billion
• Return: Floating, minimal 6,40% p.a
• Period: 4 years
• Maturity: June 10, 2027
• Early redemption: May 26 – June 3, 2025

A comparison of Saving Bond and other categories of government securities is provided below:

Saving Bonds ST010 Investment Simulation The computation for the monthly returns that investors receive under ST010-T2 fixed returns (6.25% annually) and ST010-T4 (6.40% annually) is shown below.

Fees are paid on the tenth of every month and are subject to a 10% tax.

Minimum Profit Simulation every Year

Afterward, the monthly coupon becomes

Example

• You will receive an annual total reward payment of Rp56,250,000 if you invest Rp1 billion in ST010-T2. A total of Rp4,687,500 in reward payments are transferred each month on the tenth.
• You will receive a reward payment of Rp57,600,000 on the 10th of each year if you invest Rp1 billion in ST010-T4. Every month on the 10th, benefits totaling Rp4,800,000 are transferred.

Who Should Invest in Sukuk Tabungan ST010?

Sukuk Tabungan (ST) can be used by investors to generate additional income on a monthly basis. ST010 is ideal for those with medium-term objectives of 2 to 4 years.

Sandwich Generation to Assist Parents

One of the characteristics of ST010 is a fixed rate of return and is paid every 10th.

These fixed and routine returns can be used as additional parents’ monthly income.

Additional Retirement/Pre-Retirement Income

ST010 fixed and regular returns can be used by those who have retired or are nearing retirement age (pre-retirement).

Example of pre-retirement income of IDR 20 million per month. If you invest IDR 1 billion, you will receive IDR 4,800,000 (equal to 24% of pre-retirement income).

Paying monthly bills

You can use the monthly returns to pay fixed household expenditures, such as electricity, water, internet bills, mortgage installments or insurance premiums.

Investment objective for the next 2 to 4 years

ST010 can be utilized as an investment diversifier because it is SAFE (state-guaranteed) and offers favorable returns. ST018 is best suited for medium-term financial objectives (2 to 4 years).

For example, suppose your child is going to college in two years and the money has been collected. You may "save" the money in Sukuk Tabungan (ST) (since it's safe, insured by the government, and the returns are appealing).

How to Order ST010

ST010 may be ordered via the Moduit app or by contacting Moduit Beyond Advisor directly.

You can become a Moduit Beyond Client by filling out this form or contact Moduit Beyond’s wealth advisor. .

Hidden Gems Behind ST010

In comparison with the previous series, The ST010 offers a more appealing return.

Notes:

• The ST006 and ST007 have expired, because they were past due.
• The ST008 maturity date is August 10, 2023. Since BI7DRRR is currently 5.75%, the annual coupon you will receive is 7.05% (before tax).
• The ST009 maturity date is November 10, 2024. Since BI7DRRR is currently 5.75%, the annual coupon you will receive is 7.15% (before tax).

Will ST010 experience an increase in returns like ST008 and ST009? SBSN Savings, also known as Sukuk Tabungan has a floating return, calculated as follow: ST010-02: benchmark interest rate + 0,50% ST010-04: benchmark interest rate + 0,65%

The reference interest rate is The BI 7-Day Reverse Repo Rate (BI7DRRR). Below is Indonesia's benchmark interest rates trend data:

Melvin Mumpuni, CFP®, QWP®, a financial planner for Financialku, comments: “The benchmark interest rate has room to rise from 5.75% to 6.00%. One of the reasons for this increase is to anticipate the impact of rising US interest rates (FED Rate).”

Melvin also stated “Generally, the difference between the US benchmark interest rate (FED Rate) and Indonesia's benchmark interest rate (BI7DRRR) is 2%-3%. Currently, the difference between benchmark interest rates is only 0.5%.” If The BI7DRRR rate rises from 5.75% to 6.00%, The ST010 yield will increase by 0.25%.

Savings Bonds ST010 Investment Risk

Investing in Indonesian State Islamic securities is free from the risk of default and return on payments because there is a guarantee from the government (as stated in Undang-Undang Nomor 24 Tahun 2002 regarding Government Bonds).

ST010 investment risk is

Liquidity Risk Liquidity risk occurs when an investor wants to sell ST010 outside of the specified early redemption period (ST010-T2 dated May 24 - June 3, 2024 and ST010-T4 dated May 26 - June 3, 2025).

Risk Mitigation: Investors should identify their investment objectives and investment period. If you have any difficulties, then you can contact Moduit Beyond's wealth advisorcontact Moduit Beyond's wealth advisor.

How to Register as a Wealth Management Client

PT Moduit Digital Indonesia is an OJK-registered investment advice firm. (Decree: KEP-30/D.04/2019).

Moduit Beyond is a priority service from Moduit that provides Wealth protection and preservation management. You will be handled by a wealth advisor with more than 15 years of experience in the industry.

You can start becoming a Moduit Beyond client, by filling out the form and investing from IDR 1 billion. As a Moduit Beyond customer, you will receive numerous benefits, including:

• Personal advisor
• Curated financial products
• Get first access for newly products & services launched
• Daily market report
• Priority call center
• Exclusive lounge access
• Year end gift

You can become a Moduit Beyond Client by filling out this form or contact Moduit Beyond’s wealth advisor.