Things to know before starting NISA! Explaining the differences from time deposits and government bonds for individuals from a housewife's perspective

Today, for those thinking about starting NISA, I would like to explain from a housewife's perspective

why in this day and age,
“you cannot protect your money just by keeping it in the bank.”

I want to explain this from a housewife's perspective.

1. You cannot protect your money with bank deposits alone due to rising prices

Due to rising prices and inflation, the value of money (yen) has decreased.


For example, suppose a cup of instant noodles that used to cost 100 yen now costs 120 yen.

This is partly due to price hikes by manufacturers.


It is also due to the soaring costs of crude oil and raw materials, but let's consider it as a decline in the value of the yen.


A car that could be bought for 1 million yen now costs 1.3 million yen.

Looking at it this way, just having 1 million yen in savings cannot cover the extent of the price increases.

“I got a raise, so my salary went up, so it's okay!”

Many people might think that.

But please check your monthly take-home pay once.

For example, suppose your monthly take-home pay increased by 5,000 yen.

On the other hand,
if your children are in a growth spurt,
or you need to prepare bento lunches every day,
what if your food expenses increased by 10,000 yen?

If your expenses increase more than your increased income,
you will have to reduce expenses somewhere,
or dip into your savings.

“I got a raise, so I'm safe” is not necessarily true,
and it is important to consider not only income but also changes in expenses when managing household finances.

2. Let's calculate time deposits

Let's break down bank time deposits.

When depositing 1 million yen for one year at an annual interest rate of 1.25% (before tax)

Deposit amount: 1,000,000 yen
Interest before tax: 12,500 yen

【Breakdown of taxes】
・Income tax and special reconstruction income tax (15.315%): 1,914 yen
・Resident tax (5%): 625 yen
・Total tax: 2,539 yen

Interest received after tax: 9,961 yen

※The actual amount received may vary by about 1 yen due to rounding by financial institutions.

I calculated the interest rate by referring to a campaign from an internet bank (Sony Bank).

When the inflation rate exceeds the interest rate,
the real value of money decreases,

so I felt that it is limited in its effectiveness as a countermeasure against rising prices.

However, cash and bank deposits are for life defense funds,

and it is said that you should keep half a year's worth of your take-home monthly income on hand.

You also have to consider the risks of sudden bankruptcy or resignation.

There is no such thing as being absolutely safe in the future.

If you have a family, I think you need a year's worth of take-home monthly income.
That's quite difficult, isn't it?


That's why our family was in a situation where we couldn't invest for a long time.

In our household, where our monthly income was not enough, we lived relying on bonuses.

The first thing I did every year was
to secure money for annual payments when my husband's bonus came in.

Depending on the amount of the bonus,
I would set aside half a year or a year's worth of living expenses,
and managed it exclusively for annual payments.

I calculate annual special expenses (annual payments).

Vehicle inspection fees,
voluntary car insurance,
life insurance,
seasonal dry cleaning costs,
homecoming travel expenses,
travel costs, etc.,

necessary expenses that cannot be covered by monthly incomeare
set aside in advance.

For time deposits, I used to
deposit money so that it would mature
in line with when I needed to use it, such as in 3 months, 6 months, or 1 year.

For example, SBI Sumishin Net Bank has a feature called "Purpose-Specific Accounts."

This makes managing money very easy.

You can decide on names yourself, such as for education expenses, car expenses, or travel costs,
and you can create them,
and for each of those purpose-specific accounts,
you can use both regular savings and time deposits.

It is also recommended to set up your monthly savings to be done automatically.

For example, Sony Bank's "Accumulation Time Deposit"

allows you to set a monthly accumulation amount and save automatically.

If life gets difficult, you can reduce the amount, withdraw a portion, or cancel it.

In either case, if you need cash,
you can easily make cash available in your main regular savings account using the smartphone app.

When my son was in high school,
I diversified 5 million yen in university tuition in 1 million yen increments.

At the time, my husband thought, "I'm worried about depositing the full amount in an online bank," so I also diversified and deposited it into Japan Post Bank time deposits.

Since there was news about unauthorized use at financial institutions back then, I would regularly update my passbook to check for any unauthorized withdrawals.

At online banks,
I used time deposits with relatively high interest rates, and each time they matured, I would reinvest them into the next time deposit to prepare for education expenses.


What should I do next?

③ Let's calculate government bonds for individuals

One way to invest with low risk is government bonds for individuals.


Because the Japanese government guarantees the payment of principal and interest, they are considered a relatively safe financial product.

Let's calculate for a 3-year fixed rate.


If you deposit 1 million yen for 3 years at an annual interest rate of 1.56% (pre-tax, fixed rate),

Deposit amount: 1,000,000 yen

[Pre-tax]
・Annual interest rate: 1.56%
・Annual interest: 15,600 yen

[Taxes (annual)]
・Income tax and special reconstruction income tax: 2,389 yen
・Resident tax: 780 yen
・Total tax: 3,169 yen

[Post-tax]
・Post-tax annual interest rate: 1.243086%
・Annual interest received: approx. 12,431 yen

・Total interest received over 3 years: approx. 37,293 yen


※ The "post-tax annual interest rate of 1.243086%" is the rate after deducting income tax, special reconstruction income tax, and resident tax.


The post-tax interest is approximately 12,431 yen per year.


In reality,
interest of approximately 6,215 yen is paid every six months,

and the principal of 1 million yen is returned at maturity after 3 years.

Where can I buy government bonds for individuals?

Government bonds for individuals can be purchased at many financial institutions, including banks, credit unions, credit cooperatives, securities companies, and Japan Post Bank.

If you already have an account at a financial institution, the procedure is relatively smooth.

Since interest rates and campaign details may vary by financial institution, it is recommended to compare a few before applying.

You can also check the list of participating financial institutions on the Ministry of Finance website.

[Points to Note]

There may be times when you need money for unexpected expenses after depositing it.

Even if you cancel a time deposit early, your principal is generally guaranteed (an early withdrawal interest rate will be applied).

On the other hand, while government bonds for individuals can be cashed in early after one year has passed since issuance,

because an amount equivalent to the last two interest payments (one year's worth) before tax is deducted,

the amount you receive may be slightly less than the amount you deposited.

Therefore, it is important to keep this money separate from your living expenses and emergency funds,
and to invest only surplus funds that you do not plan to use in the near future.

4. For those who are separated or considering divorce

If you are separated with the intention of divorce,
a spouse with a lower income may be receiving, or may be entitled to receive, marital expenses depending on the situation.
Also,

the date of separation is often considered the time when the marital relationship effectively broke downas,

it can become apoint of contentionin mediation or court.


Therefore, if you deposit your spouse's bonus or similar funds received after separation into a time deposit or government bonds for individuals

without consulting them,

it could potentially lead totrouble later ondepending on the circumstances.


If you are unsure about what to do,
it is reassuring to check with a lawyer during a free consultation beforehand.


Also, if you are on speaking terms with your spouse,
confirming the deposit with them in advance,
and keeping a record of that communication via email or similar means is one approach.

*This is a general perspective.

The handling of marital expenses and property division varies depending on individual circumstances.

If you are worried, it is recommended to consult with a lawyer.

5. Choose where to deposit your money based on 'when you will use it'

・Government bonds for individuals

It is recommended to deposit surplus funds that you will not need for at least three years.

・Time deposits

For money you plan to use in the near future, it is safer to manage it by matching the deposit term to when you need it, such as using a six-month or one-year time deposit.

・In our family's case

we usedJapan Post Bank's fixed-amount savingsfor our children's New Year's money.

Since we didn't know when it would be needed, we left it deposited for about 10 years and explained it to them once they reached high school age.

And, I handed over the full amount when they became a university student.

I believe it is important not only to "grow" your money, but also to choose where to deposit it by considering "when you will use it."

Let's think about a combination that suits your own life.

That is precisely why "long-term surplus funds" that you do not plan to use in the near future,

come up as an option for "NISA" to help grow your money so it doesn't lose out to rising prices (inflation).

Next time, while also incorporating the differences from the bank deposits and government bonds for individuals introduced this time,

I would like to introduce how to save little by little every month using NISA,

in a way that is easy for beginners to understand.

In addition, I also plan to introduce the NISA products I am actually using for savings and the reasons why.

※Systems, tax laws, and service details are subject to change.

Please check the latest information on the official websites of the government, financial institutions, and telecommunications companies.

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