Jakarta, Armfalcon.com – Apart from ORI, SBR, Retail Sukuk and Savings Sukuk, the public can now also buy FR (fixed rate) series government bonds easily. These bonds are available in various tenors, and of course the returns and capital are guaranteed by the state.
FR0095 for example, this government bond has a yield coupon of 7% per year and matures in 2033, aka 10 years from now.
Seeing its low risk, yields that exceed deposits, 10% final tax and its nature that can provide a fixed income, FR bonds can certainly be an option for long-term investments, say, like the cost of education for high school children.
But is this instrument the right choice? Here’s the review.
Don’t just pay attention to the coupon, pay attention to the yield
The coupon does determine how much yield you will receive each year, if you buy the bond at par (face value). But if you buy it on the secondary market, the yield benchmark that you have to look at is not the coupon but the yield.
The yield is the total yield on the bonds you buy, if you decide to hold them to maturity.
Don’t forget that these bonds can be traded in the secondary market. The process of buying and selling can certainly make bond prices fluctuate.
When you buy it at 100, you get the bond at its original value (par/nominal). However, if it is below 100, then you are buying at a discount, while if it is above 100 it is often called a premium price.
Buying bonds at a premium price will certainly reduce yields, while buying at a discount price will increase yields.
Do not let the yields be used for consumptive matters
FR yields are fixed income like deposits, don’t let the returns that enter your account be used for consumptive matters. It can actually disrupt your long-term investment process.
To anticipate this, of course you can arrange the process of transferring bond yields to a different account. With this, you will not be tempted to take your investment returns.
Capital placement is a lump sum
Bond investment is a lump sum or one time payment, like a deposit. Investment capital certainly plays an important role in obtaining significant profits in the future.
If it is indeed a children’s education fund that you want to pursue, then you must first calculate the need for this one fund in the future.
Once you know, then you can make adjustments to place your capital in FR bonds.
If you really don’t have cold money to invest in FR directly, just use a fixed income mutual fund with state bonds underlying in it.