RetireJapan

I have recently started working out my finances, and I'm wondering where should I keep my emergency funds in Japan.
Back in my country I have some good savings on long term government bonds, which I can retrieve whenever I need (T+1, I think...)), so I guess I'm ok for a while if I ever need to move back home for some reason, but I have no idea of what to do with my emergency funds in Japan.

Should I just keep on a savings account separate from my current account?
Or are there better options to keep the emergency savings untouched but still keep the money working a bit?

Generally speaking you will want to have quick access to your emergency fund, and to avoid the risk of it falling in value just before you need it.

For these reasons most people tend to keep their emergency fund in cash. A separate bank account works well.

I keep some of mine at home in cash (my experience after the 3/11 earthquake taught me the value of cash when there is no electricity), and some in various bank accounts in Japan and abroad. That is probably overkill though

Most of mine sits in an SBI Bank Hybrid account (for a few pennies - 0.01％ - of interest, some bonus points on their ranking system, and convenience because you can use it directly from SBI Securities). Although I still have to make an (instant) transfer to the non-hybrid (bank) account to withdraw. So if their website goes down, I might be in trouble. That's why I do the same as RetireJapan and also keep some physical cash just in case, because we live in a country of natural disasters.

I used to use Shinsei 2-week term deposits, but that's it's not ideal if you need to wait 2 weeks for cash in an emergency, and they lowered the rates so much it just wasn't worth it anyway.

There's almost no interest available right now, so you have to accept that it's a basically a cost to keep cash. But that's the price of security! I would try to resist trying to make money off your emergency fund by putting in into any kind of risky asset class, including bonds. The purpose of an emergency fund is to provide the security you need to take more risks with the rest of your assets. At least that's what I tell myself. I do wonder if I'm being too conservative sometimes, but it works for me.

As far as I am aware there are no JPY accounts that pay any meaningful interest so we just keep a few months' expenses in my wife's account (no joint accounts in Japan). And if my wife leaves me for the mailman, I have credit cards that should cover me .

Credit Cards can be stopped, and come with high interest, which you probably won't be in a position to pay off quickly if you're needing emergency funds. Better put some money in your own name .

Cash is king for a reason when the shiz hits the fan.In our school,students pay in cash and I want to hold off on any other way as long as possible.Two years ago,safety boxes were a best seller in Japan because the thought of tying your My Number card to your banking transactions was a hell no to most people.Keeping in the bank makes as much money as under the mattress and just yesterday when at the bank, they wanted to know if I'm paying taxes elsewhere.Having readily accessible money is paramount in whatever form.

Cracaphat wrote: ↑Thu May 14, 2020 12:22 pm... and just yesterday when at the bank, they wanted to know if I'm paying taxes elsewhere. ...

Would you care to mention the name of the bank? (or if not the name, something about it--regional, national, credit union)

Also, was it verbal, or did they give you a form to fill out, etc? If the latter, what kind of form was it?

captainspoke wrote: ↑Thu May 14, 2020 9:31 pm

Cracaphat wrote: ↑Thu May 14, 2020 12:22 pm... and just yesterday when at the bank, they wanted to know if I'm paying taxes elsewhere. ...

Would you care to mention the name of the bank? (or if not the name, something about it--regional, national, credit union)

Also, was it verbal, or did they give you a form to fill out, etc? If the latter, what kind of form was it?

It was Mizuho bank and I was verbally asked.The same thing at that bank happened last year, when I first opened an account.In fact, the staff said that it is the law to declare any overseas tax paying.She stated It was only Americans in the beginning, but now all foreigners.I'm sure when I received the phone call thirty minutes later to pick up my bank book,they'd check to see if I really didn't.And two things: 1/. My Japanese isn't that good.I was there with my wife! 2/.Went to close account in my name and change to our school's name.What an ordeal of paperwork it was.

Cracaphat wrote: ↑Fri May 15, 2020 4:38 am It was Mizuho bank and I was verbally asked.The same thing at that bank happened last year, when I first opened an account.In fact, the staff said that it is the law to declare any overseas tax paying.She stated It was only Americans in the beginning, but now all foreigners.I'm sure when I received the phone call thirty minutes later to pick up my bank book,they'd check to see if I really didn't.And two things: 1/. My Japanese isn't that good.I was there with my wife! 2/.Went to close account in my name and change to our school's name.What an ordeal of paperwork it was.

I'm pretty sure this is referring to being resident for tax purposes in another country. The reason they are asking is because countries that signed the information sharing treaty have agreed to share account information regarding tax residents of other countries.

If you are not resident for tax purposes in another country (doesn't matter if you otherwise pay taxes in some form) you should just say no. If you are tax resident somewhere else you'll have to provide your TIN (tax identifier number) for that country.

Refers to this I believe: https://www.oecd.org/ctp/exchange-of-ta ... stieas.htm

Ironically the US has not signed this treaty, but most other developed countries have.