Savings Account

[pastor Ralph]

Me and wife-chan recently opened a savings account at a Japanese bank. Not surprisingly, the interest is nearly 0%. If they would only fire the guy they send every month to pick up the money and use his salary to pay us some interest....
Well, to come to the point, I wonder what your experiences are with saving money in Japan. Australian interest seems to be pretty high. Does anyone here have an Australian yen-savings account or something like that? I prefer to keep the money in yen.
With the crisis dragging on, we'd rather stay out of stocks and bonds.
I'm interested you hear what you're doing, about your good and bad experiences etc. All advice is welcome.

[ksnasi lurker]

The interest is nearly 0%. If they would only fire the guy they send every month to pick up the money and use his salary to pay us some interest....
Well, to come to the point, I wonder what your experiences are with saving money in Japan. Australian interest seems to be pretty high. Does anyone here have an Australian yen-savings account or something like that? I prefer to keep the money in yen.
With the crisis dragging on, we'd rather stay out of stocks and bonds.
I'm interested you hear what you're doing, about your good and bad experiences etc. All advice is welcome.

But the point is: interest rates are zero, inflation is zero, pay rises are zero. Everything's zero, so by keeping money on deposit - despite earning virtually no interest - it doesn't lose its value. This is different from Australia, where you need to earn at least the rate of inflation in interest to ensure the value of your money doesn't go down.

You don't say why you are saving money. If it's just for a rainy day, then no worries, because prices aren't going up either. If it's a substantial sum and designed to generate an income then I'm afraid you need to look at bonds or stocks - or foreign currency accounts. The problem with the latter, of course, is that if the Yen gets stronger you lose money.

Arguably, this is a great time to buy stocks - if you're prepared to be patient (i.e. wait for 5 years or more).

By the way, your comment about firing the guy they send - tongue in cheek though it may be - is trite. You need to remember that things are done here the way they were 30 years ago in the West. Don't try to create a revolution in a country that doesn't want one. Live with it!

[Chromedome]

I was reading your reply and thinking....'hang on a tic, this couldn't be KansaiBen replying to the post...it's making too much sense'....then I checked!

I was right!

[pastor Ralph]

You don't say why you are saving money. If it's just for a rainy day, then no worries, because prices aren't going up either. If it's a substantial sum and designed to generate an income then I'm afraid you need to look at bonds or stocks - or foreign currency accounts. The problem with the latter, of course, is that if the Yen gets stronger you lose money.
Arguably, this is a great time to buy stocks - if you're prepared to be patient (i.e. wait for 5 years or more).

Well, it's not that much yet. We're still in our twenties and trying to put away a couple of man each month, but the goal is slowly creating an additional source of income.
We'd rather don't buy foreign currency (commissions, devaluation risk), but are looking for some kind of (off-shore maybe) yen denominated savings account that pays us about 3-5% interest.

By the way, your comment about firing the guy they send - tongue in cheek though it may be - is trite. You need to remember that things are done here the way they were 30 years ago in the West. Don't try to create a revolution in a country that doesn't want one.

You're right, a low unemployment rate is worth something too. Even though his job isn't that useful, the money is better used towards his salary than to some rich CEO (like in the West).

[ksnasi lurker]

...looking for some kind of (off-shore maybe) yen denominated savings account that pays us about 3-5% interest.

Good luck!

By definition, an account in Yen - whether on-shore or off-shore - will pay virtually no interest. Your only option if you want a higher rate of interest is an account in a different currency - and you then immediately expose yourself to exchange rate fluctuations, which could potentially wipe out (and more) and interest you get. (However, the Yen is very strong at the moment, so many people argue that now is a good time to buy other currencies with Yen). Countries like India and Brazil pay very high rates of interest, largely because they have high inflation. I certainly wouldn't feel comfortable depositing money in these currencies! Anyway, everything depends on your attitude to risk. If you don't and won't need the money for a while (i.e. several years), you should look at bonds or equities. If you might need it quickly or in the near future the safest option is a Japanese bank.

For the record, I have some money in a foreign currency account - with a Japanese bank - but I feel like it's 'trapped' there by the current exchange rate situation (i.e. the strong Yen). One day it might be worth moving it back into Yen, but certainly not now.

[outkast]

Compared to other parts of the world, it ain't great, but a few banks (especially online ones) do have savings rates slightly better than normal if you use their special programs. I use Rakuten for my savings accounts, and if you put in say 1000man for 5 years (at a rate of 0.36%), you end up with 144,000 after taxes in interest. There are also other banks with similar programs lately.

Is 0.36% (the rate decreases based on initial sum and time period- 50man @ 0.17% for 1 year = 680 yen...) better than forex or stocks? Probably not, but safer at least if you're not ready to gamble yet. In any rate, it's better than the 0.02% rate whatever normal account you're using now is assuredly earning you (Japan Post is 0.03%!!).

[pastor Ralph]

Compared to other parts of the world, it ain't great, but a few banks (especially online ones) do have savings rates slightly better than normal if you use their special programs. I use Rakuten for my savings accounts, and if you put in say 1000man for 5 years (at a rate of 0.36%), you end up with 144,000 after taxes in interest. There are also other banks with similar programs lately.

Is 0.36% (the rate decreases based on initial sum and time period- 50man @ 0.17% for 1 year = 680 yen...) better than forex or stocks? Probably not, but safer at least if you're not ready to gamble yet. In any rate, it's better than the 0.02% rate whatever normal account you're using now is assuredly earning you (Japan Post is 0.03%!!).

Thanks, I'll check it out. 0.36% might be the highest interest on a savings account in Japan. It's not much, but adjusted for inflation, it's about the same as many standard European savings accounts offer.

By definition, an account in Yen - whether on-shore or off-shore - will pay virtually no interest. Your only option if you want a higher rate of interest is an account in a different currency - and you then immediately expose yourself to exchange rate fluctuations, which could potentially wipe out (and more) and interest you get. (However, the Yen is very strong at the moment, so many people argue that now is a good time to buy other currencies with Yen). Countries like India and Brazil pay very high rates of interest, largely because they have high inflation. I certainly wouldn't feel comfortable depositing money in these currencies! Anyway, everything depends on your attitude to risk. If you don't and won't need the money for a while (i.e. several years), you should look at bonds or equities. If you might need it quickly or in the near future the safest option is a Japanese bank.

It might be a good time to buy other currencies now, but the yen may also continue becoming stronger. As far, it doesn't show signs of weakening. The plan is actually to never need the principal.
Yeah, I should look into bonds I guess. I've just read too many stories about Greek bonds and the debt levels of many countries, but lots of bonds should be fine I suppose. I read that some of them are (partly) guaranteed and also that some foreign yen dominated bonds come with a nice interest.

[Super Grover]

Thanks, I'll check it out. 0.36% might be the highest interest on a savings account in Japan. It's not much, but adjusted for inflation, it's about the same as many standard European savings accounts offer.




It might be a good time to buy other currencies now, but the yen may also continue becoming stronger. As far, it doesn't show signs of weakening. The plan is actually to never need the principal.
Yeah, I should look into bonds I guess. I've just read too many stories about Greek bonds and the debt levels of many countries, but lots of bonds should be fine I suppose. I read that some of them are (partly) guaranteed and also that some foreign yen dominated bonds come with a nice interest.

I would tend to disagree. With all of the volatility, trying to pick the right currency could be a bad move. That said, if it were me, I'd be in CAD or AUD. It seems to me that with the strength of the yen, it is a good time to buy into a real, stable currency or use the strong yen to buy things elsewhere that retain long term value and can be used any time, assuming you plan to move somewhere later (eg., quality leather sofa, bed frame, vintage car, good furniture, prep work done on property, etc.). Or pay down foreign debt, if any. Lots of things to consider, though.

I agree with Ksnasi Lurker. Imo, if one has some money to invest, soon or even now might be right. I believe some stocks will fall quite a bit more yet, but others are worth buying now. I am referring to solid blue chips. I have been mostly on the sidelines for a year at least (I am too lazy to check specifics), but am preparing/ strongly considering going back in maybe even in this month, but probably more toward the summer. I think that in a relatively short timeframe it will be possible to gain 100% (3-5 years?) with some stocks.

[minamon]

Besides Rakuten, I noticed that Tokyostar bank is offering 0.96% after tax, on amounts over 3 million for 10 years.
(I think they have the normal government guarantee up to 10 million).

http://www.tokyostarbank.co.jp/staro...n/soaring.html

Yen...
the experts have been predicting yen would/should start to weaken for over a year now (but it just gets stronger or stays the same!) Sometime it should weaken (but when?)

[minamon]

I believe some stocks will fall quite a bit more yet, but others are worth buying now. I am referring to solid blue chips. I have been mostly on the sidelines for a year at least (I am too lazy to check specifics), but am preparing/ strongly considering going back in maybe even in this month, but probably more toward the summer. I think that in a relatively short timeframe it will be possible to gain 100% (3-5 years?) with some stocks.

SG - do you mean stocks in Euro/US?
Do you have a recommended platform (online?) for buying them? (Etrade?)
Thanks for opinions.

[Super Grover]

SG - do you mean stocks in Euro/US?
Do you have a recommended platform (online?) for buying them? (Etrade?)
Thanks for opinions.

I do. I might. I would prefer not to discuss exactly online. Feel free to PM me.

[Tatsuo]

All advice is welcome.

OP: How about if you guys open an account with a broker like 楽天証券, put 35 per cent in MRF, 35 per cent in an index funds with Japanese bonds and 30 per cent in a cheap mixed index funds like http://www.smtam.jp/fund/detail/_id_39/ and re-balance every year ? You'd be invested in thousands of companies, countries and courencies around the world and had a well-balanced and safe asset-allocation with a target of 3-4 per cent / year. Trading a cero-sum game minus comissions etc. will not lead to anything but losses in the long run. Predicting FX movements that are being influenced by millions of factors in the future is arrogant and stupid. Investing in targets with actual cash flow isn't.

[minamon]

Super Grover has exceeded their stored private messages quota and cannot accept further messages until they clear some space

Feel free to PM me.

quote: "Super Grover has exceeded their stored private messages quota and cannot accept further messages until they clear some space"

[IparryU]

OP: How about if you guys open an account with a broker like 楽天証券, put 35 per cent in MRF, 35 per cent in an index funds with Japanese bonds and 30 per cent in a cheap mixed index funds like http://www.smtam.jp/fund/detail/_id_39/ and re-balance every year ? You'd be invested in thousands of companies, countries and courencies around the world and had a well-balanced and safe asset-allocation with a target of 3-4 per cent / year. Trading a cero-sum game minus comissions etc. will not lead to anything but losses in the long run. Predicting FX movements that are being influenced by millions of factors in the future is arrogant and stupid. Investing in targets with actual cash flow isn't.

Ya... since taxi drivers and AKB48 started the whole Japan Bond gig... they must be good...