A time deposit is a fixed-term bank deposit that can only be withdrawn at a specified maturity date with a fixed interest rate agreed upon at the beginning. This product differs from a regular savings account because the funds cannot be withdrawn anytime without consequences.

In Indonesia, time deposits are widely used banking products because the system is simple, returns are clearly defined, and the risk is relatively measurable compared to capital market instruments.

What Is a Time Deposit?

A time deposit is a fixed-term savings product with a fixed interest rate and a specific tenor, typically ranging from 7 days to 12 months.

Main characteristics of a time deposit:

• Has a specific term (tenor)

• Offers higher interest returns than regular savings accounts

• Funds are locked until maturity

• Can be automatically renewed (Automatic Roll Over / ARO)

• Interest is subject to final tax according to tax regulations

Today, time deposits are also available in digital or online formats that can be accessed directly through banking applications.

Read: Recognize the Wrong Transfer Fraud Mode to Stay Alert 

Things to Consider When Choosing a Time Deposit

Time deposits are considered relatively low-risk instruments, but there are still several risks to understand:

Liquidity Risk

Funds cannot be withdrawn before maturity without consequences, according to the bank’s terms.

Interest Rate Risk

Interest rates may change for new deposit placements.

LPS Insurance Risk

Pay attention to the deposit insurance rate set by LPS. Deposits with interest rates exceeding the guaranteed rate are not covered by LPS.

The LPS guaranteed interest rate until May 31, 2026 is 3.50% (https://apps.lps.go.id/BankPesertaLPSRate).

Inflation Risk

If inflation exceeds the deposit interest rate, purchasing power may decrease.

By understanding these factors, customers can more wisely choose the tenor and amount according to their needs.

How to Choose a Bank for Time Deposits

Choose a bank that is licensed by OJK, participates in LPS, and is transparent about interest rates and fees.

Key factors to consider:

• Licensed and supervised by OJK

• LPS participant

• Fee transparency

• Minimum deposit requirement

• Tenor options

• Flexible tenor choices

• Ease of access (branch or digital)

• Early withdrawal terms

Banks with digital services now also offer online time deposits that can be opened through applications, making the process more practical.

Example of a Digital Time Deposit Product

One example is WOW Time Deposit available in neobank from Bank Neo Commerce. This product is accessible digitally through the application, offers flexible tenor options, and provides competitive interest rates according to the applicable period.

Advantages of WOW Time Deposit

• Competitive interest rates based on the tenor: 5%, 6%, 6.5%, 7%, and 7.5% per annum.

• Terms vary from 7 days to 1, 3, 6, and 12 months.

• No admin fees

• Low initial deposit starting from Rp100,000

• Interest paid at maturity

• Rollover option available

Visit https://s.id/fbdepositowow for more information about WOW Time Deposit interest rates. Interest rates may change for new placements according to bank policy.

Why Do People Choose Time Deposits?

Fixed and Predictable Returns

The interest rate is determined at the beginning, making returns easier to estimate.

Relatively Low Risk

Time deposits are not affected by market fluctuations like stocks or cryptocurrencies.

Encourages Financial Discipline

Because funds are locked, the risk of impulsive spending is lower.

Suitable for Short- to Medium-Term Funds

For example: education funds, home down payments, or business reserve funds.

A 2025 Ipsos Indonesia survey shows that savings accounts and time deposits are considered instruments that can provide capital protection and stable returns.

Which Bank Offers the Best Time Deposit?

There is no single absolute answer because everyone’s needs are different.

In general, an attractive time deposit typically offers:

• Competitive interest rates

• Flexible tenor options

• Affordable minimum deposit

• Easy account opening process

• Transparent fees and tax information

• A bank licensed by OJK and participating in LPS

A time deposit is a fixed-term savings product with a fixed interest rate, suitable for funds that will not be used for a certain period. It differs from a current account (giro), which focuses more on business transactions.

By understanding the differences, risks, and how to choose a bank, a time deposit can become a financial instrument that supports stability and medium-term planning.

FAQ

1. Is a time deposit suitable for emergency funds?

Time deposits are less flexible for emergency funds because the money is locked until maturity. Emergency funds are generally better placed in liquid savings accounts.

2. What is the minimum amount to open a time deposit?

Each bank has different requirements. Some banks set a minimum starting from Rp100,000, while others require higher amounts.

3. Can time deposit interest rates change?

Interest rates may change for new placements according to bank policy, but they do not affect active deposits until maturity.

4. Can a time deposit be withdrawn early?

A time deposit generally cannot be withdrawn before maturity. However, certain products, such as FLEXI Time Deposit in neobank, allow early withdrawal with adjusted interest calculations.

5. How long is the tenor of a time deposit?

Typically, deposit tenors range from 1 month to 12 months.

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Interest information for the period February 24, 2026.

To learn more about available products, you can check them through the neobank application on the PlayStore or App Store. For the latest updates, visit https://s.id/fbdepositowow.

PT Bank Neo Commerce Tbk is licensed and supervised by the Financial Services Authority (OJK) and Bank Indonesia (BI), and is a participating bank of the Indonesia Deposit Insurance Corporation (LPS).