Introduction. The modern investor's dilemma
You have some free money and you want to increase it. You are faced with a classic choice: deposit or real estate. This question torments thousands of Russians who understand that money should work, and not lie as a dead weight.
Today the situation is especially confusing. Banks offer a tempting 19-20% per annum on deposits. Sounds fantastic, right? But at the same time, the real estate market has sank, and many experts are talking about profitable buying opportunities.
What is more profitable: investment or real estate right now? Let's figure it out without water and advertising promises.
What is more profitable: investment or real estate right now? Let's figure it out without water and advertising promises.
In 2025, major changes have occurred. The Central Bank raised rates to record highs, mortgages became unaffordable for most, and apartment prices began to decline in real terms. This created a unique situation in the market.
Some investors grab high deposit rates, realizing that such a freebie will not last long. Others see falling property prices as a chance to enter the market at attractive prices.
The truth, as always, is somewhere in the middle. Investment instruments should be selected based on your goals, capabilities and risk tolerance. Diversification and capital protection trump the pursuit of maximum returns.
We'll break it all down: real returns, hidden costs, taxes and risks. After reading, you will know exactly where to invest your money.
Bank deposits. Reliability with limited return
Now banks are literally bombarding customers with offers with interest rates of up to 20% per annum. It seems that it is impossible to imagine anything better. But there are nuances.
The maximum rates are offered by small regional banks that are desperately fighting for every client. Giants like Sberbank or VTB are more modest - their rates rarely exceed 12-15% per annum. But the reputation and reliability are at their best.
Table of interest rates of leading Russian banks for 2025:
| Bank | Maximum bid | Conditions | Deadline | Minimum amount |
|---|---|---|---|---|
| Gazprombank | 15% | Savings account | Poste restante | RUB 1,000 |
| VTB | 12% | Minimum balance | Poste restante | RUB 30,000 |
| Sberbank | 10% | Standard contribution | 12 months | RUB 1,000 |
| ICD | 18% | Contribution "Perspective" | 18 months | 50,000 rub. |
| Sovcombank | 16% | With the card "Halva" | 12 months | 1 00 rub. |
| Alfa-Bank | 13% | Deposit "Victory" | 24 months | 10,000 rub. |
Advantages of bank deposits
A bank deposit is like a warm sweater in winter. Maybe not the most fashionable, but reliable and comfortable.
Your money is insured by the state up to 1.4 million rubles. Even if the bank collapses tomorrow, you will receive compensation. No other investment instrument has such protection.
Deposit liquidity is simply excellent. Need money urgently? A couple of clicks in the mobile application - and the funds are on your card. Yes, if you withdraw early, you will lose some of the interest, but you will keep the principal amount.
No management headaches. You open a deposit, the interest rate is fixed, and you know exactly how much you will receive in a year. You can calmly go about your business while the money works.
Modern banks offer a lot of conveniences: automatic extension of deposits, capitalization of interest, bonuses for regular customers. You can manage your deposits without leaving your couch.
Disadvantages of deposits in conditions of inflation
But there is a fly in the ointment. Inflation protection for deposits is poor. With inflation of 8-9% per annum, your real return shrinks like shagreen leather.
Fixed rates are not keeping up with rising prices. If inflation suddenly shoots up, you will be left with nothing. You will nominally have more money, but you will be able to buy less with it.
Real return after taxes and inflation
The government also wants its share of your profits. In 2025, on income from deposits over 210,000 rubles per year, you will need to pay an income tax of 13-15%.
Let's do the math using a specific example:
- Invested 2 million rubles at 15% per annum
- Earned 300,000 rubles in a year
- The first 210,000 rubles are not taxed
- On the remaining 90,000 rubles, pay a tax of 11,700 rubles
- In total you will receive 288,300 rubles
- With inflation of 8%, the real return will be only 5.4% per annum
Not as rosy as it seemed at first, right?
Real Estate Investments. Growth potential and risks
Rental yield
Rental yields in major cities vary greatly depending on the location and type of property. Usually it ranges from 5% to 9% per annum, but these figures require serious adjustments to reality.
The situation in Moscow is interesting. Since the beginning of 2025, rent has fallen in price by 9%. Landlords have to reduce their appetites - there is more supply on the market, and there are fewer solvent tenants.
Here's how much it costs to rent a house in the capital:
Studios: 67,000 rubles per month
One-room apartments: 68,000 rubles per month
Two-room apartments: 110,000 rubles per month
With an average apartment price of 278,200 rubles per square meter, the gross return of a one-room apartment with an area of 40 sq.m is about 7.3% per annum. But this is before all maintenance costs and taxes are deducted.
Property value growth potential
With rising prices for purchasing real estate in 2025, it's a complete disaster. Instead of traditional growth, we see stagnation and even decline in real terms.
In 2024, Moscow housing prices fell by 8.7%, taking into account inflation. In the first half of 2025, losses amounted to another 1.9%. Nominally, prices are rising by a measly 0.2% per month, which is several times lower than general inflation.
The reasons are simple and clear:
- Mortgages have become prohibitively expensive - over 25% per annum
- Preferential lending programs have been curtailed
- Population incomes are declining
More sellers enter the market
The only exception is luxury real estate. In the premium segment, prices remain stable and in some places even rise. The rich buy real estate with cash and are not dependent on mortgage rates.
Foreign Property Investment Options
Foreign real estate has become problematic for Russians due to sanctions and currency restrictions. But some destinations remain accessible.
Popular options:
- UAE: yield 6-8% per annum, tax incentives for residents
- Türkiye: yield 5-7% per annum, possibility of obtaining citizenship
- Serbia: yield 4-6% per annum, visa-free regime
Georgia: yield 8-12% per annum in resort areas
The minimum entry threshold is from $50,000 in Serbia to a quarter of a million in premium projects in the UAE. Consider additional purchasing, management and currency risks.
Risks and challenges of property management
Property management is a full-time job. Forget about passive income if you are going to start a rental business yourself.
What you have to do on a regular basis:
- Search for tenants (in 2025 the search takes 1.5-2 months)
- Show the apartment to potential tenants
- Check documents and solvency
- Draw up lease agreements
- Monitor timely payment
- Solve everyday problems of tenants
- Make repairs between tenant changes
Cost structure will bite off a decent chunk of return:
- Property tax: up to 2% of the cadastral value
- Utility payments during downtime: 3-5 thousand rubles per month
- Repairs and maintenance: 10-15% of the rent
- Services of management companies: 8-12% of rent
- Insurance: 0.3-0.5% of the apartment price
Income tax: 13% on rental income
One expert estimated that managing one apartment takes 5-10 hours a month. Time is also money.
Entry barriers and liquidity
To buy a decent one-room apartment in Moscow, you will need at least 8-12 million rubles. To form a portfolio of several properties you need 20-30 million rubles.
Real estate liquidity is a sore spot. In 2025, selling an apartment will take 4-6 months in the middle segment and up to a year in the elite segment. Urgent sale means a 10-20% discount from the market price.
Additional selling costs:
- Real estate services: 3-6% of the cost
- Notary fees: 0.3-0.5%
- State duty: 2000 rubles
Personal income tax on sales up to 5 years of ownership: 13% on profit
Which is better, an apartment or a deposit in terms of liquidity? Deposits are won dry - money is available within a few days.
Comparative analysis: investment vs real estate in 2025
Yield: bank interest vs rental yield
What is more profitable: investment or real estate in 2025 is not a question for the lazy. You need to count real numbers, not fancy percentages from advertising.
Yield: bank interest vs rental yield
| Parameter | Bank deposits | Real Estate |
|---|---|---|
| Nominal yield | 15-20% per annum | 5-9% + cost increase |
| Real yield | 5-7% after taxes | 3-6% after all expenses |
| Minimum amount | From 1,000 rubles | From 8 million rubles |
| Liquidity | 1-3 days | 3-12 months |
| Risk of loss | Minimum | Medium/High |
| Control time | 0 hours | 5-10 hours per month |
| Taxes | 13-15% from excess | 13% + property tax |
| Inflation protection | Partial | Good long term |
| Entry barrier | Low | Very tall |
;
Practical calculation for 10 million rubles:
Bank deposit (15% per annum):
- Annual income: 1.5 million rubles
- Tax on excess: 167,700 rubles
- In hand: 1.332 million rubles
- Real yield: 5.32%
One-room apartment in Moscow:
- Rental income: 816,000 rubles per year
- Operating expenses: RUB 163,200
- Personal income tax from rent: 106,080 rubles
- Property tax: 40,000 rubles
- Net income: 506,720 rubles
- Yield: 5.07%
As you can see, the difference in the final return is meager, but the labor costs are not comparable.
Protection against inflation and currency risks
What is better: real estate or interest-bearing deposits to protect against inflation? Theoretically, real estate should grow along with the general price level, but in 2025 this mechanism is faltering.
Fixed-rate bank deposits are vulnerable to unexpected accelerations in inflation. Variable rate savings accounts adapt better.
Real estate has in the past been an excellent hedge against the depreciation of money. But now prices lag behind inflation by 8-10% per year. Rental rates are also growing slower than general inflation.
Currency risks when investing in rubles are minimal for both groups of assets. Foreign real estate adds a foreign exchange component, which can work both as a plus and as a minus.
Liquidity and ROI
Liquidity is an absolute advantage of deposits. Modern banking applications allow you to manage your money around the clock.
Even time deposits can be closed early with interest recalculation. Yes, you will lose part of your income, but you will receive the main amount quickly.
Properties have been on sale for months:
- Studios and one-room apartments: 3-4 months
- Two and three rubles: 4-6 months
- Luxury real estate: 6-18 months
- Country real estate: up to 2 years
A quick sale requires a significant discount to the market price.
Taxation of different types of income
Deposit taxes have become more transparent and predictable. The limit of 210,000 rubles protects small investors, and the rate of 13-15% on the excess is quite reasonable.
Real estate taxation is much more complex:
- Rental income: 13% personal income tax (can be reduced for expenses)
- Property tax: 0.1-2% of cadastral value
- Personal income tax on sale: 13% on profit when owned for less than 5 years
- VAT: 20% upon recognition of entrepreneurial activity
The total tax burden can reach 15-25% depending on the income structure.
The advantage of real estate is more opportunities for tax optimization through deductions and expense accounting.
Choice factors: when to choose what
Capital Amount and Investment Objectives
It's better to buy real estate or a deposit - the answer directly depends on the thickness of your wallet.
Up to 3 million rubles - deposits only. This money is not even enough for a down payment on a mortgage on a decent property. High rates in 2025 make banking products especially attractive.
3-8 million rubles - intermediate zone. You can consider a combination: part in deposits, part as a down payment on a mortgage. But at rates of 25%+, a mortgage makes economic sense.
Over 10-15 million rubles - real estate becomes a real alternative. You can buy a quality one-room apartment in a good area for cash and receive rental income.
Goals are also important:
- Short-term retention (1-3 years) - deposits only
- Regular passive income - deposits are more predictable
- Long-term accumulation (10+ years) - real estate can benefit
- Asset inheritance - real estate is easier to transfer
Ready for active control
What is more profitable than an apartment or a bank deposit in terms of labor costs? Deposits require no effort at all once the money is deposited.
Real Estate Turns You into a Manager:
- Looking for tenants for 2-4 weeks
- Draw up contracts and resolve disputes
- Coordinate repairs and monitor condition
- Plan income and optimize taxes
- Take photos and post ads
Many people underestimate the amount of work. One apartment takes 5-10 hours a month minimum.
Investment time horizon
Time is a decisive factor in choosing between an apartment or a bank deposit.
Up to 3 years - deposits have no alternative. Real estate will not recoup the purchase and sale costs within such a period.
3-7 years - zone of uncertainty. In 2025, high deposit rates compete even on the medium-term horizon.
7+ years - real estate has historically benefited from rising costs and rental indexation. Plus you get tax benefits for long-term ownership.
Risk Tolerance
Your attitude to risk is a key factor in your choice.
Conservatives must choose deposits. Guaranteed return of up to 1.4 million rubles, predictable income, no management difficulties.
Moderate investors can combine: the core of the portfolio is in deposits, with a small part in real estate for diversification.
Thrill seekers are willing to take risks for potentially greater profits. For them, real estate can become the basis of a portfolio.
Alternative Strategies and Combination Approaches
Flipping as a short-term alternative
Real estate flipping - buying apartments for quick resale after renovation - can bring 20-50% profit for the project. But in 2025, this business has become extremely risky.
The market has sank, there are few buyers, and sales times have increased significantly. What used to sell in a month now hangs around for six months.
To successfully flip you need:
- Know the market well and be able to find undervalued properties
- Have experience in construction and communication with contractors
- Have a minimum capital of 5-7 million rubles
- Be prepared for serious losses
In the current environment, flipping is more likely to be a way to lose money than to make money.
REITs as a compromise solution
Real estate funds (REITs) are still exotic in Russia, but they are a popular instrument abroad.
They give exposure to real estate without the management headaches.
Advantages of REITs:
- High liquidity - traded on the exchange
- Professional Asset Management
- Diversification between multiple properties
- Low entry threshold - from several thousand rubles
- Regular dividend payments
In developed countries, REITs yield 4-8% per annum with moderate risks.
Combining deposits and real estate
Capital distribution scheme by stages:
- Stage 1: Up to 3 million rubles
- 80% - time deposits at high rates
- 15% - savings accounts for liquidity
- 5% - stocks and bonds for variety
- Stage 3: 8-15 million rubles
- 45% - bank deposits as a basis
- 35% - first investment apartment
- 20% - liquidity reserve
- Stage 2: 3-8 million rubles
- 60% - deposits with different maturities
- 25% - savings for real estate
- 15% - alternative investments
- Stage 4: Over 15 million rubles
- 35% - deposits for stability
- 45% - portfolio of 2-3 apartments
- 20% - international diversification
- Gradually increasing investment
A smart investment strategy is built gradually. Beginners should:
Years 1-2: Learn banking products, study rates from different banks, understand taxes.
Years 3-4: Research the real estate market, go to viewings, analyze neighborhoods and prices.
Years 5-6: Buy your first apartment when you reach the required amount, gain experience in rental management.
Years 7+: Optimize your portfolio, expand your geography, master complex tools.
This approach will protect against costly mistakes for newbies.
Practical recommendations and conclusions
Whether a deposit or real estate is better in the reality of 2025 depends on your circumstances. There is no universal answer.
Choose bank deposits if:
- You have capital of up to 5 million rubles
- Want guaranteed passive income without the hassle
- Value stability over maximum profit
- Need quick access to money
- Planning investments for up to 5 years
- Looking for the foundation of a conservative portfolio
Real estate makes sense if:
- You have an amount of over 10-15 million rubles
- Invest for 10+ years
- Ready to spend time on asset management
- Want to diversify a large portfolio
- Planning to inherit assets
- Looking for protection against long-term inflation
Key findings for 2025:
High deposit rates have temporarily made banking products super attractive. This situation will not last long - in a year or two, rates will decrease.
The real estate market is undergoing a correction. Falling prices create opportunities for patient long-term investors.
Diversification is more important than chasing maximum returns. A combined approach reduces risks and ensures stability.
A reduction in the Central Bank's key rate may change the balance in favor of real estate in the next year or two.
Your action plan:
Start with high-yield deposits to create a financial cushion
At the same time, study the real estate market and save up to buy
View real estate as a long-term investment, not a get-rich-quick scheme
Consider all hidden costs when calculating apartment return
Regularly review strategy based on changing conditions
Remember: Successful investing requires patience, discipline and constant learning. Decide where to invest your money based on your goals and capabilities, not fashion trends. Proper diversification and long-term planning will bring more benefits than the pursuit of short-term gain.
Read in full
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