Junior Nisa - investment amount

[crew]

...but after that it could just be moved into the ordinary account and would be able to continue to grow (although no longer tax-free). There is no limit on the amount of investment in the ordinary account.

How does this work exactly. Lets say I maxed out 4M in the Junior NISA.
After 5 years it has grown to 6M.
No tax, my kid gets to keep the entire 6M worth of assets (but it stays in the account until he is 18).
It gets converted to a regular account.

If he does nothing with the account and when he turns 18, the value is now 20M, is that entire 20M tax exempt?
If he adds 1 million every year from the 6th year, this portion will be the only one taxed?
If we sell the assets on the 5th year and convert to another asset (is it even allowed) will this be treated as a new investment?

[Bushiman]

Apologies for hijacking this older thread, but can anyone just answer my quick question, please...

Do JR NISA payments (with Rakuten) have to be monthly? Or can you put in whatever whenever as long as you don't go over the ¥80man max?
I was hoping to just put the kid's government child allowance (4~6man every 4 months) into their JR NISAs when it arrives...

Thanks!

[mule96]

You have one year time to get to yearly maximum of 80 Man!

[Sybil]

I buy funds on a lumpsum basis for my son's junior NISA. This is with SBI but I'm sure all the online platforms will be the same.

[Bushiman]

Great news! Thanks for the information people...
I just want to bulk buy within the NISAs when the government money comes through. It would be a pain to split that money into separate months...

[Sybil]

I invest on fixed dates with my Tsumitate NISA and iDeCo so for the Junior NISA I invest on market dips.


I guess by 'government money' you mean child allowance. As it isn't mega-money, I would put the equivalent into your child's account at the start of the year and invest it in funds when there are market dips. Then use the actual child allowance payments for your own purposes when it comes into your bank.

[Bushiman]

I guess by 'government money' you mean child allowance.

That is correct... family allowance.

As it isn't mega-money, I would put the equivalent into your child's account at the start of the year and invest it in funds when there are market dips. Then use the actual child allowance payments for your own purposes when it comes into your bank.

I didn't think of that -thanks! I'm guessing you mean a market dip as close to the beginning of the year as possible, giving the entire amount plenty of time in the market, is that right?
Now I'm thinking about it, investing the money every 4 months when it arrives will act like dollar cost averaging, which may not reap higher rewards, it may be a bit safer, no?
Lump sum vs Dollar Cost Averaging
Thanks for the input Sybil!

[Leafs_Raps]

...but after that it could just be moved into the ordinary account and would be able to continue to grow (although no longer tax-free). There is no limit on the amount of investment in the ordinary account.

How does this work exactly. Lets say I maxed out 4M in the Junior NISA.
After 5 years it has grown to 6M.
No tax, my kid gets to keep the entire 6M worth of assets (but it stays in the account until he is 18).
It gets converted to a regular account.

If he does nothing with the account and when he turns 18, the value is now 20M, is that entire 20M tax exempt?
If he adds 1 million every year from the 6th year, this portion will be the only one taxed?
If we sell the assets on the 5th year and convert to another asset (is it even allowed) will this be treated as a new investment?

I am in the process of starting an account for my child now, so I was wondering what exactly was the answer to this question? Thank you in advance.

[Fred589]

Resurrecting this thread.

I want to invest more than the 80Man per-year allowed by the Junior NISA into toshi shintaku. From the above replies, am I understanding correctly that I can open a regular investment account (taxable) in my child's name and invest there?

Plan being,
1) invest max 80man into junior NISA each year, lump sum beginning of year
2) invest money beyond that, contributions monthly into the child's regular investment account, buying toshi shintaku

Currently comparing Gakushihoken (poor returns), different life insurance policies (would rather diversify portfolio myself via toshi shintaku than pay insurance company), and this third option.

If anyone else has any other tips for saving for their child's education here in Japan, I am all ears.

Thank you.

[TokyoWart]

From the above replies, am I understanding correctly that I can open a regular investment account (taxable) in my child's name and invest there?

Yes, this is relatively easy to do. I set up accounts for my children at Nomura before the Junior NISA system started. The accounts are linked to my children's individual postal bank accounts which we had to establish for them because of some club activity fees. The kids are not allowed to trade in or withdraw from the accounts until they are adults. One disadvantage (which may be a Nomura rule) is that any transactions have to go through a phone or in-person interaction instead of the much cheaper online trading. Also keep in mind that the gift tax limit in Japan is 1.1 million yen/year so you would not want to add more than that to their account in any one year without being able to show that the money did not all come from you.