http://www.indonesiamatters.com/14259/indonesian-banks-expats/
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In Indonesia you have two types of bank :
- Bank Umum which are commonly called Commercial bank in english.
- Bank Perkreditan Rakyat which are commonly called Rural bank in english
Actual interest rate maximums for Commercial and Rural banks
http://www1.lps.go.id/
From these rates, 20% tax will be automatically deducted.
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Those banks do not have the same role and do not enjoy the same freedom and have the same authorization from Bank of Indonesia. Commercial bank, operate in much more sectors than rural bank and therefore are more controlled by Bank of Indonesia and the Lembaga Penjaminan Simpanan(Indonesia Deposit Insurance Corporation). The latter is the organism which guarantee the customer's deposit in banks and pay (part of) the bill in case of a failure. Needless to say that they keep an eye on what is going on.
As per today, Bank Umum are authorized to give interest up to 7,25%. This is the maximum they are authorized to give to keep your term deposit insured and safe. This maximum rate of 7,25% is called the Tingkat bunga yang wajar or Insured interest for the official english denomination. Among those bank umum who would strictly stick to the Bank of Indonesia regulation and the LPS policy, are the most prominent one: Mandiri, BCA, BRI, BNI, CIMB Niaga, or bank such as HSBC, UOB, Citibank...etc. Do not expect any of them to breach the agreement they have with BI and LPS. They will serve you an interest rate of 6,5% to 7,25% depending on the amount you intend to invest and the length you want it to be blocked. However they will be able to provide you a lot of quality services such as internet banking, credit card, premium account facilities, overseas transfer (with money arriving or being received without hassles or headaches), hard currency denomination account...etc.
Then, still in the bank umum category, you have a few banks such as Bukopin, Panin, Danamon, Bank Mega, Permata and a few others who may accept to serve you an interest rate above the 7,25%. Their services do not match the one of the bank above, but are still good for everyday banking. You can negociate with them special rates for any large amount. For your information, I have negociated with Bukopin a 9% interest rate for blocking for 6 months a certain amount on my current account (not a term deposit per se). 5,5% Interest are paid up front while the rest is paid monthly, which is a really good deal if you think about it.
Then you have regional commercial banks. In this category you have some descent bank and some real shaddy one. They may be of interest though if you are looking for higher rate and already have an account with BCA or Mandiri (or any other bank providing the whole spectrum of services one may want to receive from a bank). Bank Sulut pays me at the moment an interest of 9,5% (recently renegociated after having been set at 9% until June 2011) for term deposits with a 1 month term. Bank Sulut is owned by my regional government. Puting money there offers me two advantages: it allows me to support the regional economy... and it offers me the guaranty of the regional government. This bank will not be bankrupt anytime soon, since all accounts of the local dinas and every salaries of PNS working for the regional government are paid here.
This is quite important since, even if Bank Sulut is backed up by LPS, the 9,5% of interest paid are above the tingkat bunga yang wajar, meaning that in case of a bank failure you are screwed. But the real good deal is not to be found in Commercial banks. You should investigate rural bank if you are just looking for high interest rate with no or almost no service (no credit or debit card...etc). I have a deal with Bank Prima Esa (insured by LPS) in Manado which pays me 10,25% interest rate and still offers me the full guaranty of LPS up to 2 milyar. Bank Perkreditan Rakyat are authorized to pay interest up to 10,25% (again the tingkat bunga yang wajar) where bank umum can't exceed the 7,25% mark. That's something you should know. However, Bank Prima Esa has inconvenients: they have no branches outside Sulawesi Utara, I have no credit or debit card and therefore me money is only available during banking hours at the counter. However, they also pay me an incredible 7% on my current account. Though my initial term deposit was set on a 6 months term, I know enjoy the priviledge to be able to open term deposits of any amount with the same 10,25% rate with a 1 month term only.
Some Bank Perkreditan Rakyat may propose you interest above the Tingkat Bunga yang Wajar they are authorised to pay. I have found a bank which was proposing me 10,5% and another one just a week ago which was ready to pay up to 11% on a 6 month term deposit. However at this level of interest, and due to the capital structure of the privately owned bank, I prefered to refuse because the deposit won't be insured by LPS.
In short shopping around really pays and you can get the best of every bank by really comparing what they have to offer.
The Tingkat bunga yang wajar I've been giving in this post (ie 7,25% for bank umum and 10,25% forbank perkreditan rakyat) are the one effective for the period until September 14th 2011. They may be revised after this date, though I doubt it will change. Inflation is well controlled (It has decreased from 7,02% in January to 4,61% in July) but they can't afford to lower the interest rates at the moment. However, it wouldn't be stupid for you to secure a high rate now and for 6 months.
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