What is this offer from Rakuten?

[Roger Van Zant]

I received an email from Rakuten earlier today with this offer:

https://ibb.co/G9FzyW6

Am I right in thinking that if I deposit one million yen into this dollar account for one week (7日もの?), I will receive post-tax interest of 6.374%, so 63,740 yen after seven days?

That can't be right, surely?

[sutebayashi]

Yes, that’s an annual rate they quote - see the 年 in front of it. But they won’t be paying you that interest rate for a whole year.

Kinda amazing that this sort of advertising is let to pass, because it is somewhat deceiving… although they do say it’s an annual rate.

[Yokohama]

Yes, when it sounds too good, it usually is

My understanding is those are yearly interest rates (it lists 年 and the rate). It is just they double the interest rate for 7 days. So instead of receiving amount * 4% * 7 / 366 for that period, you will receive double that, just for that week.

Update: sutebayashi beat me to it

[sutebayashi]

As an aside, if you used a Rakuten FX account, and bought the equivalent of 10,000 USD with them, it looks like they would pay you 236 yen a day (as of checking right now), or around 1,650 yen for a week or 85,000 yen a year.

If the fx rate is 148, that’s 1,480,000 yen‘s worth (ignoring the potential to use leverage), so it’s above 5% annual return that way - of course you have to take the forex risk, and the interest rates may shift against as well (many seem to be counting on that this year).

These special bank foreign currency interest rates don’t seem to be a good deal, whereas at least with the forex account you could sell your USD position any weekday you want.

[Roger Van Zant]

Ah, thanks, everyone.
I should have spotted the 年.