《New NISA 2️⃣》A Complete 5-Minute Guide to the System—Organizing How to Use the "Tsumitate Investment Quota" and "Growth Investment Quota" with Diagrams

End the "NISA seems complicated" mindset today

Information about the new NISA is overflowing on the internet, but it often looks unnecessarily complex.

"What is the difference between the Tsumitate quota and the Growth quota?" "What is the lifetime investment limit?" "How is it different from the old NISA?"

If you break it down one by one, the system itself is very simple. By the time you finish reading this page, you will have a clear understanding of the entire new NISA system.

The core of the new NISA: A system where "profits are tax-free"

Let's start with the most important fact.

Normally, profits earned from stock investments or investment trusts (capital gains, dividends, and distributions) are subject to a tax of approximately 20.315%.

Even if you make a profit of 100,000 yen, your take-home amount is about 79,700 yen. About 20,000 yen is taken away as tax.

If you invest through a new NISA account, this tax becomes zero.

That is all there is to it. "Profits from investments made within a new NISA account are tax-free"—this one sentence says it all.

The structure of the new NISA: Two quotas and one limit

The new NISA has two types of investment quotas.

Tsumitate Investment Quota (up to 1.2 million yen per year)

This is a quota exclusively for installment investments. It is specialized for automatically investing a fixed amount into investment trusts every month.

The products you can invest in are limited to investment trusts and ETFs that the Financial Services Agency has certified as "suitable for long-term, installment, and diversified investment." These are all products with low fees that are suitable for long-term holding.

Converted to a monthly basis, you can invest up to 100,000 yen.

Growth Investment Quota (up to 2.4 million yen per year)

This is a quota that allows you to invest in a wider range of products, including individual stocks, ETFs, and investment trusts. Lump-sum investment is also possible, and it is a quota for intermediate users and above who want to choose their own stocks.

Lifetime Investment Quota (up to 18 million yen in total)

Combining the Tsumitate Investment Quota and the Growth Investment Quota, you can invest up to a total of 18 million yen tax-free over your lifetime.

However, the upper limit that can be used solely for the growth investment quota is 12 million yen. The remaining 6 million yen must be used for the Tsumitate investment quota.

The Decisive Difference from the Old NISA

Compared to the "Old NISA" that existed before 2023, the New NISA has been significantly improved in three ways.

① The tax-exemption period has become indefinite
The old NISA had a limited tax-exemption period of 5 years (General NISA) or 20 years (Tsumitate NISA). The New NISA is indefinite. "You can hold it forever."

② The lifetime investment quota has been significantly expanded
The annual limit for the old General NISA was 1.2 million yen x 5 years = 6 million yen total. The New NISA allows for 3.6 million yen annually up to a lifetime total of 18 million yen. The scale has expanded threefold.

③ The quota for sold assets is restored the following year
In the old NISA, once you used your quota, it was gone, but in the New NISA, when you sell, the quota is restored from the following year onward. It is no longer "once you use it, it's gone."

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Available to everyone, but "one account per person"

The New NISA can be used by anyone aged 18 or older living in Japan.

However, you can only hold a NISA account at one financial institution per person. Even if you have accounts at multiple securities firms, you can only use NISA at one company.

Choosing which securities firm to open your NISA account with is an important decision. In the next episode, Part 3, I will explain in detail "where you should open it."

Summary: Key Points of the New NISA

You can invest up to a lifetime maximum of 18 million yen in an "account where profits are not taxed." There are two types of quotas (1.2 million yen for Tsumitate, 2.4 million yen for Growth), the tax-exemption period is indefinite, and the quota for sold assets is restored the following year—that is all you need to remember.

About this series

This series concludes in 10 episodes (including this compilation).
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⚠️ Disclaimer
This article is intended for informational purposes only and does not recommend the buying or selling of specific stocks or financial products. Please make investment decisions at your own risk.
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#NewNISA #SystemExplanation #TsumitateInvestmentQuota #GrowthInvestmentQuota #Beginner #TaxFree #AssetFormation #DailyNote #DailyUpdate #Column

Evidence:

• Financial Services Agency – New NISA: https://www.fsa.go.jp/policy/nisa2/about/nisa2024/index.html

• Financial Services Agency – NISA Annual and Lifetime Investment Quotas: https://www.fsa.go.jp/policy/nisa2/about/nisa2024/assets/nisa2024_gaiyou.pdf

• National Tax Agency – NISA Tax-Exemption Measures: https://www.nta.go.jp/publication/pamph/koho/kurashi/html/06_2.htm