Banking in Indonesia offers the same range of services commonly offered by banks elsewhere in the world. This includes savings, deposits, checking, online banking, currency exchange, foreign currency banking, wire transfers, ATM services, wealth management and so on.
Author’s note: There are two main banking entities in Indonesia, traditional banks and rural banks (Bank Perkreditan Rakyat – BPR). This article focuses on traditional banks, while a follow-up article on the merits of Rural Banks will be published at a later date.
Advantages of a local bank account in Indonesia
- Indonesia is still largely a cash based society. Most transactions beyond that of international hotels, malls and restaurants are often in cash. Having access to local banking card and ATM machine saves exchange fees and the hassles of having to carry large amounts of cash.
- The largest Indonesian currency denomination is Rp 100,000 (approx USD 7.50), so many cash transactions require ridiculous amounts of paper currency. You can largely avoid this by using online banking and ATM transfers.
- Paying various utility bills is much easier via online banking.
- A large number of vendors, including airlines, government offices, the state rail company, cellphone providers, cable TV providers, etc. accept payments via bank transfers.
- Indonesians use bank transfers for transacting larger amounts of money, which would be impractical using cash.
- Banks often offer better currency exchange rates than money changers, and if you open a foreign currency account along with your Rupiah account you can easily transfer between those two accounts.
Requirements to open an Indonesian bank account for foreigners
Despite recent loosening of requirements from the Financial Services Authority (Otoritas Jasa Keuangan – OJK), banks still require at least a KITAS to open a bank account. In addition to that, you will have to show a passport. Occasionally you may be asked to provide a reference letter from your employer or sponsor.
Common types of bank accounts in Indonesia
Savings – This is by far the most common type of account. Nowadays, online banking makes this type of account very versatile. You can often do real time transfers to pay your bills and make purchases. The most common transactions include paying for phone bills, electricity, and transfers to merchants for purchases. You should receive a bank card (ATM card) with this account. You earn interest on your savings, although at a worse rate than you would for a term deposit. Note that interest is automatically taxed at 20% by the bank.
Giro – This functions similarly to a checking account. This is not at all common for private parties, and mostly companies still use this form of accounts to write checks. For everyone else, the online transfer functions of a savings account does what normally would have required writing a check.
Term deposit – Term deposits, or deposito in Bahasa Indonesia, pay a higher interest rate, in exchange for keeping the money for a set term. Usually 1, 3, 6 and 12 months terms are available. You can often negotiate for a better rate and/or gifts if you deposit large amounts, so don’t be shy to ask.
Foreign currency accounts – Most banks will have the ability to open a USD account for you, and some will have accounts in other currencies as well, including for EUR, RMB, AUD and JPY. Naturally these pay a much lower interest rate than a Rupiah account would. However but it gives the ease of banking in another currency, and shields you from currency fluctuations.
Virtually all banks can confer preferred banking status to customers who keep large amounts of money with them. Preferred banking often rewards its members with additional perks. These include personalized customer service, skipping lines via dedicated tellers, waiving of many banking fees, lounge use at airports and so on.
Automatic Teller Machines (ATMs)
ATMs are ubiquitous in Indonesia. In addition to easy withdrawals, ATMs can handle other transactions such as bill payments, prepaid purchases and person to person transfers. Curiously enough, most of them can NOT accept deposits. ATMs that can accept deposits will be clearly marked as such.
You will likely be charged a usage fee if you use an ATM that does not belong to your bank.
The largest ATM network is ATM Bersama, which connects virtually every large bank into one network. The usage fee for using an ATM from a different bank, but still in the ATM Bersama network is typically lower than using a non-network ATM. Some banks even waive the usage fee completely.
ATMs dispense either Rp 50,000 or Rp 100,000 bills. The dispensed denomination will usually be written on the machine.
You can use usually use your home country’s bank or credit card to withdraw Rupiahs from ATMs. Seek out ATMs that display the logos of one of the worldwide interbank networks: Alto, Maestro, Cirrus, Plus, Master Card, and Visa. You should match the network with your own bank’s, usually printed on your bank or credit card.
It is possible for an expat to obtain an Indonesian credit card, however there may be additional hurdles to overcome, especially for the first Indonesian credit card. Some Indonesian banks will require a reference from another customer or proof of income. Additionally, they may require opening a term deposit equal to the credit limit to secure the card.
Credit cards in Indonesia are not nearly as competitive as they are abroad. Almost no card will waive their annual fees. The rewards program, if any, is also usually worthless. Dispute resolution is often in favor of the bank. This is true even in cases where there was theft or fraud, so be very careful with the card. One positive is that most cards will act as a discount card at many vendors. Some of the discounts can be quite attractive.
Banking in Indonesia Tips
Banks in Indonesia are insured by Lembaga Penjamin Simpanan – LPS (www.lps.go.id). Ensure that your bank is a member of LPS. It insures accounts up to Rp 2 Billion per individual per bank. Please note that this is the total amount of funds across any number of accounts an individual may have at one bank. For example, if you have a long term deposito of Rp 2 Billion, any interest accrued will not be insured by LPS, since it exceeds the insured amount. If this is a concern, you should withdraw all amounts beyond Rp 2 Billion as soon as possible, even if the funds are in different accounts.
Indonesian banks are not very friendly when it comes to dispute resolution. If you lose your ATM card or credit card, you must immediately inform your bank and close the account. You may be held liable for any spending incurred between losing your card and calling the bank, which goes against all international banking norms. Keep the contact numbers of your bank handy so that you may call them immediately in the event of losing your card.
You can often get a better interest rate or other incentives (cash back, gold or electronics) if you want to keep a large amount of money with your bank. However, ensure that the interest rate do not exceed the maximum rate authorized by LPS.
Swift Codes for Major Banks
In order to transfer money internationally to an Indonesian bank, you will need the bank’s SWIFT Code. Here are the codes for the major banks:
1. Bank Danamon: BDINIDJA
2. Bank Mandiri (not Bank Syariah Mandiri): BEIIIDJA
3. Bank CIMB Niaga: BNIAIDJA
4. Bank Negara Indonesia (BNI): BNINIDJA
5. Bank Rakyat Indonesia (BRI): BRINIDJA
6. Bank Bukopin: BBUKIDJA
7. Bank Central Asia (BCA): CENAIDJA
8. Bank Internasional Indonesia (BII): IBBKIDJA
9. Pan Indonesia Bank: PINBIDJA
10. Bank Tabungan Negara (BTN): BTANIDJA
11. Bank UOB Indonesia: UOBBIDJA
12. Bank Permata: BBBAIDJA
13. Bank Maybank Indocorp: MBBEIDJA
14. Bank OCBC NISP: NISPIDJA
15. Bank Commonwealth: BICNIDJA
16. Bank Mega: MEGAIDJA