RetireJapan

Our family recently reorganized our finances in Japan and we decided to move a chunk of our investments to the US. This necessitated a transfer of more than 10M yen to USD to a Schwab brokerage account. I used the opportunity to compare some of the costs, and came to a perhaps surprising conclusion. Looking for some feedback, or perhaps some holes in my logic.

The basic conclusion is that, after all my years of Shinsei, is that keeping a chunk of money in yen or forex just to keep Gold/Platinum status has been financially inefficient. The light savings on wire transfers compared to Wise/Revolut, the here-and-there savings for furikomis, and the free ATM withdrawals, are just not worth having a 3M yen equivalent (or more) rotting away in a low-interest account.

My average return on investments in the USA is 5-18%. Going by the conservative side of that (5%), I would have made USD 1,500 on the 3M yen that I didn't transfer to the USA for investment there. If I weren't an American citizen, and could buy into eMaxis Slim, I would have "lost" even more. Now, do any of you rack up anywhere near USD 1,500 of wire, furikomi and ATM fees in a year (scaled to this scenario of 10M yen)?

I checked my own records painstakingly, and I would have accumulated up between 40-50k (USD 450) of such fees between 1 January 2021 and 15 December 2021. Yes, I also made a negligible amount of interest in my Shinsei account, which is not even worth mentioning.

Furthermore, while Shinsei Platinum did reduce my fees to wire the money to the the US, I gave Revolut a go for half of it. Roughly, the fees for transferring 5M from Shinsei was 4,000 Yen while the fees to transfer 5M from Revolut (including furikomis to Revolut, 1 month of Revolut Premium and the break fees, and estimating their marginal take) were 17,000 yen. Yes, Revolut was more and it took 5 transfers. But the "cost" in lost earnings to have the Platinum status at Shinsei was way more.

Could someone justify for me why I should keep more than what is needed for everyday costs in Shinsei?

* A secondary bonus here about Revolut - to avoid my US broker (Schwab) determining that I'm in Japan, I have to wire the money to a different account and then transfer the money domestically to Schwab. It turns out that Revolut's transfers were viewed as domestic transfers from JP Morgan NY, and so I could directly transfer to my brokerage.

* The tax office did call me about the Revolut transfers AND the Shinsei transfer. Our conversation lasted 3 minutes and they were just fine with my reasoning.

toscanini wrote: ↑Sat Dec 18, 2021 6:44 am The basic conclusion is that, after all my years of Shinsei, is that keeping a chunk of money in yen or forex just to keep Gold/Platinum status has been financially inefficient.

You 'only' needed 300,000 yen in a foreign currency to keep Shinsei Gold, but they are of course scrapping this soon. For me keeping some of my emergency fund in there kind of made sense for the ATM withdrawals and free transfers.

Might switch my main bank account to Rakuten going forward though. Seems easier to maintain free status.

Although it is possible that Shinsei will evolve once it is acquired by SBI.

RetireJapan wrote: ↑Sat Dec 18, 2021 7:04 am You 'only' needed 300,000 yen in a foreign currency to keep Shinsei Gold

As I don't have Gold, I couldn't check what the costs for the wire transfer would be. However, some Redditors suggest it is not really competitive with Wise/Revolut. Only Platinum would be. https://www.reddit.com/r/JapanFinance/w ... /transfers

Of course, Gold seems to have enough furikomi and ATM withdrawals but even keeping ~ USD 3,000 worth of forex in Shinsei would lead to a net less of at least USD 150 in lost investment earnings... I'm not sure that pans out for my yearly furikomi and ATM costs.

toscanini wrote: ↑Sat Dec 18, 2021 7:24 am

RetireJapan wrote: ↑Sat Dec 18, 2021 7:04 am You 'only' needed 300,000 yen in a foreign currency to keep Shinsei Gold

As I don't have Gold, I couldn't check what the costs for the wire transfer would be. However, some Redditors suggest it is not really competitive with Wise/Revolut. Only Platinum would be. https://www.reddit.com/r/JapanFinance/w ... /transfers

Of course, Gold seems to have enough furikomi and ATM withdrawals but even keeping ~ USD 3,000 worth of forex in Shinsei would lead to a net less of at least USD 150 in lost investment earnings... I'm not sure that pans out for my yearly furikomi and ATM costs.

Oh, sure. But I need to keep my emergency fund somewhere, so this seemed like a semi decent option.

Of course, it will no longer be available next year.

Did the same thing with shinsei--kept my emergency funds there, which maintained platinum status (free international transfers). But that's been a while, and as they always do, things change.

It sounds like you moved 10M all at once (due to 'reorganizing'). I'd think a single wire transfer for that amount from most any bank would be cheaper than ~10 transactions via Wise.

https://www.reddit.com/r/JapanFinance/w ... /transfers

captainspoke wrote: ↑Sat Dec 18, 2021 11:17 am I'd think a single wire transfer for that amount from most any bank would be cheaper than ~10 transactions via Wise.

Of course, I assumed as much as well for many years. And as I said, I did 5M in one transfer from Shinsei and 5M in 5 transfers via Revolut to compare the amounts received. As I wrote, Shinsei Platinum outperformed Revolut by 13,000 yen. By this, I mean that I finally received 13,000 more yen from the Shinsei transfer of 5M than the sum-total of 5x1M transfers via Revolut. I won't dispute it was cheaper with Shinsei Platinum, but I was disappointed that the difference was SO negligible. Shinsei Gold would have been more expensive. And considering the cost of maintaining Platinum (3M in forex sitting in a no-interest account year after year) is a minimum of USD 1,500 in terms of lost interest/earnings elsewhere, I now consider Shinsei status to have been a waste.

Moral of the story: transfer costs are relatively competitive with Revolut, even for amounts up to 5M or 10M transferred in a short period. On the other hand, keeping cash in no-interest accounts for the purpose of saving a bit on atms/furikomi and int'l wires is not efficient. I'll be letting Platinum lapse ASAP.

toscanini wrote: ↑Sat Dec 18, 2021 6:44 am Our family recently reorganized our finances in Japan and we decided to move a chunk of our investments to the US. This necessitated a transfer of more than 10M yen to USD to a ... brokerage account.

Sorry, I guess I misunderstood--this seemed like it was more of a sudden-all-at-once change in direction, rather than that you'd have the same funds parked at shinsei for a long time.

Not gonna go look, but I suppose the yen/dollar rate would have an effect, tho probably just six of one, half dozen of the other.

Thought about that. Looks like there would have been a slight currency impact, around 3,800 yen. In this case, still doesn't affect the overall calculus concerning Platinum status maintenance. However, if one had more money to transfer regularly, needed to do so faster, and occasionally speculated in currency, Shinsei Plat would be ideal.