Jakarta, CNBC Indonesia – After Bank Indonesia (BI) decided to raise its benchmark interest rate today, the Composite Stock Price Index (IHSG) immediately experienced a correction of more than 1%.

As is known, BI finally raised its benchmark interest rate in October 2023. Currently the BI-7 days reverse repo rate (BI7DRRR) is at the level of 6%. Meanwhile, the Deposit Facility interest rate also rose to 5.25%, and the Lending Facility interest rate to 6.75%.

In the world of investment, interest rates are certainly a systemic risk, which means it will impact all instruments.

In the midst of this event, there will be several investment instruments that are likely to benefit from an increase in the benchmark interest rate, here is the discussion.

Deposit

An increase in interest rates will usually be followed by an increase in deposit interest at a number of banks, and it is not surprising that many people are increasingly looking at this deposit as a place to park their idle money.

Even though the returns are relatively small and vulnerable to inflation risk, deposits are still the right choice for placing funds for short-term needs.

Apart from being able to provide fixed returns, deposits are also very liquid. Customers can make withdrawals at any time but the consequence is, there will be a penalty fee charged if the withdrawal is made before the maturity date.

Money market mutual funds

If deposit interest rates rise, then money market mutual funds which have underlying deposit assets may also experience an increase.

Just like deposits in general, money market mutual funds are also a place to park idle funds for the short term. Not only that, this financial instrument can also be used to store your emergency funds.

This type of government securities

Some government securities (SBN) have features that can be transacted on the secondary market. But make no mistake, there are also SBN whose yield coupons can increase when the reference interest rate rises, even though they cannot be transacted on the secondary market.

Savings Sukuk and SBR are two instruments that have these characteristics. These two instruments have floating coupons or rewards with predetermined minimum limits.

In addition, these two instruments are SBN which are instruments free of default risk. This instrument is certainly suitable for those who are beginner investors or who want to seek passive income.

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(aak/aak)