Jakarta, CNBC Indonesia – Deposits are one of the savings products offered by banks with an initial deposit system and predetermined disbursement conditions. Although deposits from large banks are often known for their relatively small interest rates, this does not apply to deposits from rural credit banks (BPR).

As we know, several BPRs offer deposit interest rates above 6.5% per year.

One of the advantages of having a deposit is that it has a fixed income feature, low risk, and its simple nature. This instrument is easy to understand and provides fixed income, meaning we will receive regular returns from the funds we place.

However, are deposits from BPR the right choice to diversify your investments? Let's look at the review.

LPS is not careless in guaranteeing deposit savings

Although it is natural for every bank to offer high deposit interest rates, the Deposit Insurance Corporation (LPS) will only guarantee deposits in accordance with the guaranteed interest rate that has been determined.

If a bank or BPR offers a deposit interest rate above the guaranteed interest rate set by LPS, then the deposit will not be guaranteed by LPS. For the period 01 February 2024 to 31 May 2024, the LPS guarantee interest rate is 4.25% for commercial banks and 6.75% for BPR.

Check the legality of BPR

It is important to carefully monitor the legality of BPRs offering deposit products. Before being lured by promotions or deposit offers with high yields, it is recommended to check first via the Financial Services Authority (OJK) website.

Check the financial health of the BPR concerned

Apart from that, it is also important to check the financial condition of the targeted BPR. Disclosure of financial information from BPR can be accessed through financial reports which are usually available on their website. This financial transparency can help investors to assess the liquidity capabilities of the bank where they deposit funds.

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