This is definitely a question that has an answer that is purely personal opinion.
For me, I rarely, if ever, redeem points for individual nights. The four nights get the fifth night free, is my standard, if I can't get cheap rates.
If you don't foresee accumulating enough points for four nights, IMO, you don't have a bad deal at all.
There is no fee/penalty to re-deposit your points - just don't forget to do it!