Flocking Investment Bonds, Deposits No Longer Interesting?

Flocking Investment Bonds, Deposits No Longer Interesting?
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The hope is that this interest tax cut could attract people to invest in government and private debt.
In the end, it is expected to encourage the development of financial markets in Indonesia and support the development of infrastructure and real estate in the country.
But, if people will flock to investment in bonds because the interest tax goes down, then whether it will reduce the interest to put their funds in deposits?
Well, to answer that, there are several responses from the expert. Here are their views:
1. Investment Interest in Deposits
According to the Economist of the Institute for Development of Economics and Finance (Indef), Eko Listiyanto, as quoted by CNBC Indonesia, stated that the reduction in bond interest tax would reduce people’s interest in investing in deposits.
He reasoned, the current tax on deposit interest is still at 20%. While the bond interest tax is only 5%. And even if bond yields are not as big as deposits, they are still tempting because they pay less taxes to the state than deposits.
2. Deposits Still Attract Although Tax Bond Declines
It is different from the views of PT Bank Central Asia (BCA) Tbk’s President Director, Jahja Setiaatmadja, as reported by CNBC Indonesia that the policy of reducing the bond income tax does not affect people’s interest in investing in deposits.
Jahja believes that the bond interest tax cuts will not take up the investment investment market share. Because both bonds and deposits have different characteristics.
The fundamental difference between the two instruments is if the bond is a long-term investment, while deposits are a short-term investment because there is a tenure of only 3 months.
“People sometimes deposit excess money within three months. Yes, if he buys bonds that do not match his product, he must match his needs, “he said.


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