Rakuten Card Investment -> Huge Point Reduction

[TBS]

Yes, thanks Haystack. The point about 楽天証券 nerfing the points for continually holding mutual funds (removing the partial refund on the trust fee) is an important one - it will be painful for those with large holdings. Japanese sites are already discussing that it could be better to transfer out the funds to another broker: https://www.toushikiso.com/column/secur ... o-sbi.html
To SBI transferring appears to be free.

The point I've been making about the opportunity benefit of CC leveraging is not unique to Rakuten's Card. With Monex's Card the opportunity is actually slightly better as the investment is made on the 24th and only paid for on the 27th of the following month: https://info.monex.co.jp/news/2021/20211028_03.html
So the interest free period is slightly longer than with Rakuten.

SBI's card is the same as Rakuten in that the investment is made on the first. But there are two versions on the payment date: either 10th or the 27th. https://www.smbc-card.com/mem/for_sbi/t ... /index.jsp
If you get a card with the earlier payment the opportunity is basically lost.

[adamu]

Japanese investors are spoiled by the budget brokers, really. It's funny to read that report of people jumping from Rakuten to SBI because Rakuten pays fewer points. My UK ISA charges to hold investments... In fact, I should probably close that account and bring the funds here - not much point in it after becoming a permanent tax resident of Japan.

[Haystack]

Japanese investors are spoiled by the budget brokers, really. It's funny to read that report of people jumping from Rakuten to SBI because Rakuten pays fewer points. My UK ISA charges to hold investments... In fact, I should probably close that account and bring the funds here - not much point in it after becoming a permanent tax resident of Japan.

True, but Rakuten is also timing things very poorly.

With Monex just starting to offer 1.1% , and SBI offering .5-2% they are removing the incentives to stay with them.

SBI also offers to pay you stock transfer fee, and often gives your more free points to boot.

[zeroshiki]

SBI also announced that they are partnering with dPoints. So now you can choose between the 3 main point systems in Japan (outside of Rakuten).

Couple with the points for holdings, SBI makes more and more sense. The only thing that gives me pause is we're not guaranteed that SBI won't pull the plug on us in the future either.

[adamu]

I tend to get caught up in point optimisation, but really as long as the fundamentals are there: As high a savings rate as you can manage, and keeping costs low - then I think the point systems for investing are not that relevant in the long run. Even if they switched to charging a platform fee, it would still be worth doing.

For example, increasing your savings rate by 1% is going to have a massively bigger effect on your savings than switching from Rakuten to SBI to save 4-digits of yen a year. It is worth doing, but it's probably way down on the list of importance for most people when there are other big wins (equivalent yearly savings could be made every month by switching mobile plan, for example).

Personally I've been using SBI since the beginning anyway, and recently started Rakuten. I'm going to keep using both for diversification purposes. But I joined SBI back in the days when nobody would give me a credit card, so I don't use their CC investing scheme. This Rakuten degradation makes me think I'm not going to bother either . I probably will do the Rakuten Cash thing though...

[zeroshiki]

The only card I was ever turned down from was the SMBC NL card they were running a promo on for the tsumitate. I took that as a sign that SBI doesn't want my money and stuck with Rakuten Now Monex won't let my write my full name in the CC application form so I've given up on that too. I don't want to have to deal with the back and forth.

[adamu]

In Rakuten's case you receive the investment at the start of the month (usually 2nd or 3rd), but only have to pay for it via the CC bill at the end of the month (27th). So it helps cash flow, and means effectively you can gain an extra month of investing.

Sorry to dig this up again. I'm still not convinced it's worth considering, especially when you consider things like Furusato Nozei is doing the reverse, and other activities such as cutting large expenses or increasing savings rate will have a much bigger effect - but the actual time seems to be about two weeks.

Looking at my CC/Securities statements:

Money deducted from CC: 17 January
Money credited to securities account: 4 February
Tsumitate Investment cleared: 14 February
January CC usage deducted from bank account: 27 February.

So the time being getting the investment (14 February) and paying for the investment (27 February) was 13 days - round it up to two weeks.

[TBS]

... but the actual time seems to be about two weeks.

Looking at my CC/Securities statements:

Money deducted from CC: 17 January
Money credited to securities account: 4 February
Tsumitate Investment cleared: 14 February
January CC usage deducted from bank account: 27 February.

So the time being getting the investment (14 February) and paying for the investment (27 February) was 13 days - round it up to two weeks.

You need to be comparing the contract date (約定日) between the two scenarios - that's the date the purchase price is set.

Assuming you bought an eMAXIS Slim product here, then February was a special case as these funds had vacation days on 02/01, 02/02 & 02/03. Therefore monthly tsumitate orders went in on 02/04, and because of the weekend the price was set on 02/07 (contract date 約定日).

Now if you had invested on 02/27, that is a Sunday so the order date would be 02/28 and the price is set on 03/01 (約定日).

Comparing 02/07 to 03/01, that's the difference and the free investment time you gain. In normal months when eMAXIS Slim isn't on holiday it is closer to a month.

Sorry to dig this up again. I'm still not convinced it's worth considering, especially when you consider things like Furusato Nozei is doing the reverse, and other activities such as cutting large expenses or increasing savings rate will have a much bigger effect...

Yes, I agree with your fundamental point. Yes, Furusato Nozei has the opportunity cost of paying taxes early, I have posted on this in the past. The flip side is you get points and gifts. Value it all up. I did and the value of the points and gifts beats the opportunity cost of paying taxes early.

You are right, other things have a much bigger effect. However if you understand it, the effort required to do this Credit Card leveraging is minimal in practical terms. It is just a one off effort of setting the initial timings. Or investing any extra cash-in-hand you have if your CC tsumitate is already set up. It is still ok to pick low hanging fruits if there will remain time to pick the larger, more difficult to access ones.

[hitsuji182]

I'm assuming I could take advantage of this (CC and Cash combo) on my regular NISA account? I send exactly100k monthly to Rakuten Securities.

[zeroshiki]

I'm assuming I could take advantage of this (CC and Cash combo) on my regular NISA account? I send exactly100k monthly to Rakuten Securities.

Yes, as long as you don't have any name issues. This is very common to do.