Stocks vs. Time Deposits: Which Is the Best Choice in 2025?

The classic question of whether stocks or deposits are more profitable has resurfaced among investors. Amid ongoing global economic uncertainty, the answer to this dilemma is not as simple as choosing one over the other.

Current Trends: Deposit Stability vs. Stock Potential

The main advantage of time deposits remains their stability: unaffected by BI interest rate fluctuations, easily accessible, and guaranteed by the Deposit Insurance Corporation (LPS).

Conversely, the stock market offers much higher long-term returns. Based on 2023 data, the historical average return on stocks reached 15–20% annually, outperforming deposits that remain stagnant at 3–4%.
However, stocks come with high volatility risks and require in-depth analysis before making decisions.

Do the Math: Taxes & Inflation Reduce Real Returns

Taxes are a crucial factor in calculating net returns. Interest from deposits is subject to a 20% tax, while dividends and capital gains from stocks follow different schemes, often more favorable to investors.
According to Bibit, the net return of money market mutual funds (similar to deposits) is around 5–6% per year after tax, while post-tax deposit returns are only about 2.5–3%.

Deposits rank lowest compared to government bonds (SBN) and money market mutual funds, which each deliver 5.5–6% tax-free returns.

Liquidity & Accessibility: Stocks Offer More Flexibility

Deposits are ideal for short- to medium-term needs, but early withdrawals incur penalties. In contrast, stocks can be sold anytime during trading hours—though the risk of price declines remains (Reku, Cermati, Bank Luna).
For emergency funds or near-term financial plans, deposits are the safer choice. Meanwhile, stocks are better suited for long-term investment goals (≥ 5 years).

Risk Profile: Conservative vs. Aggressive

Deposits fit conservative investors who prioritize capital security and peace of mind. On the other hand, stocks are for investors prepared to face volatility for potentially higher returns.

• Deposits = low risk, fixed return

• Stocks = high return potential, high volatility risk

RHB Tradesmart analysts emphasize that diversification and fundamental analysis are key for stock investors to withstand market shocks.