Golden Goose

Category: Bank Accounts

  • Best Japanese bank accounts for Foreigners

    Best Japanese bank accounts for Foreigners

    Introduction

    This account seems to come up more often than one would think, so I will cover it here for reference. Note that the situation may change over time, so I will update this post as necessary.

    Many Japanese banks only support Japanese language on their apps, web sites, customer support, etc. This is to be expected because:

    1. Over 98% of the population in Japan is Japanese.
    2. Most non-Japanese residents do speak read, and write the language. (Bear in mind that the majority are from Asian countries, and learn the language before coming. There are also many Japanese-born Koreans).
    3. Most people in Japan that don’t speak the language are tourists and business travelers who don’t (and aren’t eligible for) need a bank account here.

    So, there really isn’t a strong demand for English language banking services in Japan, and in general it isn’t profitable to do so. Therefore, banks that target foreigners typically either charge more for that privileged or offer related profitable services such as overseas transfer services, etc.

    To be honest, if you are living in Japan, I strongly recommend you learn the language because it will make life easier for you in every way. Having said that, I do realize that some people may be here for just a few years, suddenly assigned for their company, or may not have had a chance to learn the language for other reasons. Most importantly, as a practical matter, you need to open a bank account to get paid by most companies.

    Also, since Japan has a “working holiday” program, people from various countries can come here and legally work for 6 months at a time – and we can’t expect someone learns the language just for that.

    How it was

    It used to be the case that English speaking foreigners could use Citibank, and Chinese speaking foreigners would often use HSBC. Both of these have closed retail banking operations in Japan now.

    The current situation

    With Citibank and HSBC gone, you’ll have to rely on a Japanese bank. To get an account, you’ll need to prove residency.

    Choosing a bank

    JP Post / Yucho Ginko

    If you are on a short term student visa or working holiday, and your stay is less than 6 months, then most banks will refuse you. In this case, your best option is probably JP Bank. They are also known as Japan Post Bank, or Yucho Ginko. As the name suggests, this bank is basically run by the post office.

    Apparently many foreigners don’t love this bank because it is a bit light on features – but JP Bank is safe and stable. It is the 4th largest bank in Japan by market cap in 2025. They hold over 20% of all deposits in Japan (For a total of over 129 trillion yen), and have 120 million active accounts – which means basically everyone in Japan has an account there.

    In addition to the above, they have the largest number of physical branches in all of Japan. This means if you need to go to a window to talk to someone, you will always find a branch nearby – after all, you only need to go to the closest post office! (Whether they speak English will depend on the person you get).

    JP Post was created to offer accounts to everyone back when many private banks only wanted wealthy customers, so even today they are one of the easier banks to open an account with.

    You can apply for an account online or in person, though applying in person may be simpler for many people. Make sure to bring your Japanese ID card.

    JP Bank accounts are free to set up and have no monthly fees.

    Some employers will say they don’t support JP Bank for payments. This is because JP Bank used to not be part of the “Zengin” (All bank) system. Recently, they have joined, so you just need to convert your bank information to the common branch + account format used by other banks when giving it to your employer if they don’t support JP Bank directly. There is a link below in the references section that allows you to input your account information (as it appears on your cash card) and have it converted to the Zengin format to allow transfers from other banks. The financial institution code for Yucho Bank is “9900”.

    Yucho has an online banking service, Yucho direct – though note it is only available in Japanese.

    The standard cash card issued by JP bank is a card that can be used at ATMs only, and it does not expire. You can apply for a Visa Debit card that will allow you to do online shopping, etc. – but this card will have an expiration date, and they are fairly strict about approvals. Either way, you need to apply for the standard cash card first and then apply for the visa debit card once you receive the normal cash card.

    JP Bank is a good “first” account to set up, and a good account for those staying in Japan only between 3 and 6 months.

    If you don’t speak Japanese, you may find the service a bit difficult to navigate.

    Prestia / SMBC Trust

    When Citibank folded in Japan, their Japanese operation was acquired by SMBC Trust. They re-branded it as “Prestia”.

    Prestia accounts charge a monthly fee (2,000 last we checked), unless you have a maintain a relatively large account balance.

    The Prestia web site and app are available in English.

    Prestia has few branches, so if you need to visit in person, there may be travel required.

    Prestia ATMs are not so common, but you can use normal SMBC ATMs for free.

    Prestia has a “MultiMoney” account which allows you to store both Yen and Foreign currency. This also allows you can also receive foreign currency directly.

    Prestia can issue you a “GLOBAL PASS” visa debit card which supports payments in multiple currencies, and also “tap” payments using iD (in Japan) and Visa Touch (overseas and Japan).

    Prestia will also allow foreigners to apply for home loans without having a permanent resident visa, and even in English if they don’t speak Japanese! Note, however that you will be paying an “English Tax”, since their rates aren’t as good as other banks.

    Prestia is a reasonable option for those who travel a lot overseas and don’t speak Japanese.

    Sony Bank (MoneyKit)

    Sony Bank has a been around for a long time, and is an internet only bank. This means they have no physical bank branches (anymore), and no ATMs.

    You can use ATMs from the following list up to 4 times per month for free:

    • 7-11 ATMs
    • Aeon bank ATMs
    • e-Net ATMs (Mainly in convenience stores)
    • Lawson ATMs
    • JP Bank ATMs
    • MUFJ ATMs
    • SMBC ATMs

    Unlike Prestia, they have no monthly account maintenance fees, and their interest rates on loans, etc. are among the best.

    Like Prestia, they offer multi-currency deposits.

    Their web site is mostly available in English, and of their two mobile apps, the simpler one (Sony Bank WALLET) is available in English.

    Seven bank has a unique feature of allowing you to use your face as biometric identification to withdraw money from 7-11 ATMs. This is called “Face Cash“.

    They offer a multi-currency account that supports 12 different currencies, and a Sony Bank WALLET Visa Debit card that also functions as a cash card – though iD isn’t supported. (You can also opt for the MoneyKit cash card if you don’t need the Visa debit functionality and don’t want to worry about expiration dates).

    If your banking needs are simple and you need an account you can access in English, then Sony Bank is not a bad choice.

    If you can understand Japanese, you may want to expand your search to include some of the best net banks like JRE Bank, Rakuten Bank, and Sumishin SBI.

    Seven Bank

    This one seems to be missing from many lists compiled in English, even though 7-11 specifically markets their accounts towards foreigners.

    The difference is that while Prestia markets to posh Expats from the US and UK who don’t mind paying a monthly fee to stay in their English bubble, Seven Bank markets more to migrant workers who want a low cost account with easy ATM access, and an easy ability to send money to their family overseas cheaply.

    This becomes clear when you realize that they support not only Japanese and English, but also Chinese, Vietnamese, and Indonesian.

    Unlike the other banks, you can open an account at the ATM!

    They will issue you a JCB Debit card that you can use for online shopping, etc., as well as at the ATM.

    They also have a money transfer app for international transfers, and special support for sending money to the Philippines using BDO bank, and other countries using Western Union.

    Seven Bank has at times refused to open accounts for American Citizens. This is not limited to Seven bank, and is not surprising, given the unreasonable demands by the US government for foreign banks to comply with US laws like FATCA.

    Fees:

    • Seven bank charges no monthly account fee, though there are fees for things like reissuing cards, etc.
    • You can use any 7-11 ATM between 7am and 7pm for free. (There is a 110 JPY fee for transfers outside these hours).
    • Transfers to other banks are 165 JPY.

    If you need an account with convenient ATM access for free and don’t speak Japanese, Seven bank might be a good option.

    If you need to make a lot of international transfers to family back home, then Seven bank has you covered.

    Being a minor bank, Seven bank might not be supported by all companies (Such as credit cards) for direct debiting.

    Shinsei Bank

    Often considered the most foreigner-friendly, Shinsei Bank offers extensive English online banking, mobile apps, and customer service. They generally do not require a hanko and have a relatively straightforward application process.

    Conclusions

    If you want English speaking physical branches, 100% English support in apps and phone support, and a wide Range of services including loans, etc., then Prestia is your option – but you will pay a premium for this support.

    If you just need a basic bank account with basic app & web site service available in English, then Sony Bank or Seven bank should be fine for you, and cost less than Prestia.

    Of the accounts listed, JP Bank and Sony Bank are popular even with normal Japanese people. JP Bank is seen as being reliable and safe, while Sony Bank has some of the best rates around.

    People often confuse “Best account for foreigners” with “Best account for English” – but these are two different things. In actuality, most foreigners in Japan do speak Japanese, and most banks in Japan will allow foreigners to open accounts provided they are medium or long term residents. This means that if you are okay dealing with Japanese, then there is no need to restrict yourself to the banks listed here. You can choose the bank with the most benefits for you, including local and regional banks, net banks with the best features, best interest rates, etc.

    Even if your Japanese isn’t great, you can try to use browser plug-ins such as “Rikai-kun” to help you understand Kanji you don’t understand on Japanese web pages while learning.

    Understand Japanese?Other RequirementBest Bank
    No3 – 6 months residencyJP Post / Yucho
    NoMost Physical BranchesJP Post / Yucho
    NoEnglish online banking & AppSony / MoneyKit
    Seven Bank
    Prestia / SMBC Trust
    Shinsei Bank
    NoMight need home loanPrestia / SMBC Trust
    NoEnglish Speaking Physical BranchesPrestia / SMBC Trust
    Shinsei Bank
    NoNeed 24/7 English phone supportPrestia / SMBC Trust
    NoMulti-Currency AccountSony / MoneyKit
    Prestia / SMBC Trust
    NoiD debit cardPrestia / SMBC Trust
    NoEasy International TransfersSeven Bank
    NoUnlimited Free 7-11 ATM useSeven Bank
    NoSupport in languages other than English and JapaneseSeven Bank
    YesMore Features
    Lower Fees    		JRE Bank
    Sumishin SBI
    Rakuten Bank

    References

  • The Best Bank Accounts in Japan

    The Best Bank Accounts in Japan

    Factors to Consider

    There are a number of factors to consider when thinking about which bank is “best”, here is a short list:

    1. Security (Ability to disable cash cards/debit cards, set daily and monthly limits, time of day limitations, block foreign transactions, etc).
    2. Ease of Use (Web site and mobile app usability, etc).
    3. Features (online banking, debit cards, sub-accounts, one time use virtual numbers, cardless ATM use, automatic transfers, etc).
    4. Fees (Charges for domestic and international transfers, withdrawals, deposits, etc).
    5. Language (Ability to use the bank in languages such as Chinese and English, in addition to Japanese).
    6. Physical branch and ATM locations.
    7. Support – How many credit card companies, utilities, etc. will let you use each bank as an automatic withdrawal (Direct debit) source, and whether your paycheck or pension can be deposited to this bank.
    8. Rates – Rates for savings and loans.

    Security

    When you open an account at any of the brick and morter banks (including JP Bank), they will ask if you want to allow your cash card to be used at other banks, or at convenience store ATMs, etc. I suspect most people say “Yes”, but typically if you use your own bank’s ATMs, transactions are free, or at least cheaper. The locations and operating hours are limited, of course. If you have an account you plan only to use for savings and access infrequently, you may opt to not allow access from other ATMs at all. Sometimes your bank’s ATMs will have additional security features, such as fingerprint scanning, etc. – so you will need to use their ATMs to get the best security.

    Likewise, you can opt out of online banking with the megabanks, and your account will be even more secure. Likewise, debit cards are dangerous in that a single charge could wipe out your balance, and the money may be gone for a long time while you dispute the charge, so maybe don’t ask for a debit card for accounts that will hold huge amounts of money.

    Cash card only cards also have another advantage over debit cards – a normal cash card (even one with J-Debit) has no expiration date. Cards with Visa, JCB, etc. debit features always have an expiration date and have to be replaced – typically every 4 years. This could be very inconvenient if you are living overseas for a few years or you move around replacement time.

    With the net banks, using convenience store ATMs will usually be your main option, but they still have the ability to block foreign ATMs, block ATMs in certain regions, etc. Some banks (f.e. au Bank) let you quickly disable the card in the app, or even have it so that it automatically locks after a certain amount of time.

    Password Cards and OTP/MFA Tokens

    Often for online banking, you will have 3 options:

    1. A password card – This card has a matrix of numbers and letters on the back, and looks like a bingo card. When you try to make a transfer, etc., the site will prompt you, f.e. “A7”, and you need to read the character at A7, which say might be “9”, and type that in. These are usually free, and used by the likes of Mitsubishi and 7 bank.
    2. A hardware token – This is a little device or card that you can press a button on in order to get a one time password to enter when logging in or doing transactions. Sometimes they will charge extra for this. It is more secure and safer than using option 3. Mitsubishi, PayPay Bank, JP Bank (Yucho), Sony bank, and many more offer this. The JP Bank one can be complex to use, and the Rakuten does not offer such an option, preferring OTP emails instead.
    3. An OTP app – This will be an application on your phone that you can use to generate OTP codes just like the hardware token listed above. This has an advantage for the bank since it’s basically free to them, and the advantage for you that you don’t need to carry a separate token. This is also a disadvantage since it means you could be cohered into giving the code, you will need to set it up again whenever you upgrade your phone (or it is lost or stolen), and furthermore phones can be hacked. Mitsubishi, for example, has been nagging people to convert to this method.

    Spending, Withdrawal, and transfer limits.

    Most banks have some sort of system to allow you to set up daily or monthly limits of some sort.

    Mitsubishi, for example, has a lot of options to set limits per transaction or per day for various categories, but like many banks, most of these limits can only be set per increment of 10,000 yen. This is useful for preventing someone from with access to you account from transferring out your life savings, but maybe not so useful to prevent you from taking out too much at the ATM once you’ve had one too many drinks.

    Examples of banks with very fine controls include Rakuten Bank & JRE Bank (which is run by Rakuten). These both let you set limits at the 1000 increment for both cash card and debit card usage, as well as setting limits on which regions of Japan your card can be used in, and what times of day it can be used.

    PayPay bank lets you generate virtual debit card numbers to use for online shopping, and each one can have a specific limit set.

    Ease of Use

    Ease of use is something I often hear foreigners complaining about, but honestly, I don’t feel the same way. Japanese web sites in general tend to be a lot “busier” than foreign sites.

    Just compare the following sites from the most popular search engines in the US and Japan.

    Quite a difference, right? But neither is better than the other. Most Japanese people prefer the “busy” look. It has more information, and more detail. You don’t need to click as many times to get to where you want to go – but there is much more presented at once which can overwhelm some people. This difference can be seen not only in web sites, but also mobile apps, PowerPoint presentations, etc. It’s not a failure of IT, but a cultural difference. If you live in Japan, you’ll need to get used to it at some point.

    That said, some of the apps are “simpler” than others, often simply because they have fewer features. For Example, au Bank has a simpler app than PayPay – though I find both perfectly easy to use.

    JP Bank is probably the most difficult bank to make transfers from, since you need to convert account numbers between the JP bank system and the system that every other bank uses if you want to transfer to an account that isn’t with JP bank. This is actually very easy once you get used to it (There is a set formula to use), and you can save “favorites” – but I am sure it can be confusing the first time.

    The reason for this, incidentally is because JP bank was set up by the Post Office when it was still owned by the government, for people who couldn’t afford regular commercial banks.

    Features

    Online banking

    Almost all banks offer online banking these days, but the web sites of “Traditional” banks are often clunky and somewhat difficult to use, even by Japanese standards.

    Debit Cards

    It’s important to know that there are two types of debit cards:

    1. International Branded debit cards (i.e. JCB, Visa, Mastercard, etc)
    2. J-Debit Cards

    You can tell an international brand card because it will have the logo of the payment processor somewhere, and often a card number and expiration date (though this is becoming less common now with so-called “numberless” cards)

    A J-Debit card is just a normal cash card with the J-Debit feature enabled. You can use these cards at major retailers such as BIC camera to make purchases just by using your PIN. I think most foreigners are not even aware of this feature.

    Net banks often have virtual and sometimes disposable debit cards as well. For example, PayPay will let you generate Visa Debit card numbers in the mobile app. au Bank has a fixed number you can use.

    Electronic Money

    eMoney here has a very specific meaning. It refers to contactless payment using the Felica standard.

    Common examples include Suica & Pasmo (which can be used on the train and bus as well), Nanaco, Waon, EDY (Which is becoming less common), QuickPay, and iD.

    QuickPay and iD are similar to Visa touch, etc., in that the account information is stored on the card, but the money isn’t. This means you don’t ever need to “charge” these.

    Suica, Nanako, etc. store your actual balance on the card itself, which means they process extremely fast (think 0.1 seconds), and don’t rely on the internet to work – but they need to be charged.

    The above can [basically] only be used in Japan, but are better supported and more useful than features like “Visa Touch”, etc.

    Cards with Visa/Mastercard/JCB Touch are also a thing, and can be useful for shopping overseas. Some cards even have both iD and Visa touch.

    Some banks won’t have this technology built into the card, but let you install it on your phone instead, though often it will need to be a Japanese market phone.

    Sub-accounts

    Usually banks will only let you have one of a specific type of account, and since most people want “futsu” (normal) accounts, you can effectively only open one account. This means if you wanted to have one account for groceries, one for paying your utility bills, and one for saving up for that vacation, you would need 3 separate accounts.

    This isn’t a big deal since most accounts charge no monthly fee, and many people have multiple accounts for transfer fee reasons (i.e. using the SMBC account when transferring money to your landlord who uses SMBC) – but it’s also mildly annoying.

    Sumishin SBI has a “sub account” feature that lets you set up separate balances for things like “Winter Vacation”, “Pet Insurance Fund”, etc. You can create these, choose the name you like, and transfer money between them easily. Only the main account will be connected to the ATM/Debit card, so you can’t accidentally spend money in the other accounts.

    Multicurrency Accounts

    Many banks offer this in some form or another, but it is simpler with some banks than other. For example, Prestia and Sony Bank support a lot of currencies and make this very easy.

    Cardless ATM

    Some banks, f.e. au Bank and PayPay Bank have so-called “Cardless ATM” features, where you can use the app to scan a QR code on the ATM and take out money without using a card. This may be more of a curse than a blessing, though, since it means that leaving your card at home to prevent over-spending won’t work very well for the willpower deprived unless they install the app on a separate phone that they also leave at home.

    Automatic transfers

    There are two main types of automatic transfers.

    1. Where you set up an account to take money from another account on a set schedule once per month. These are typically free, but can only take money from your own accounts, only with a set timing, and there is usually a lag of a week or more from the time the money is debited from the source account and when it is available in the destination account. This can be useful, for example, to transfer 50000 JPY from your payroll account to your savings account at another bank without paying fees. Many banks have this feature, though with Megabanks you will probably have to submit a request using a paper form.
    2. Furikomi Transfers – These are the same transfers you would do from an ATM or Online banking, but you set them up to go automatically on a certain bank. They will charge fees the same as a manual Furikomi – but they can be very useful for paying bills, rent, etc. PayPay Bank, for example, supports this feature.

    Fees

    With the exception of Prestia, most Japanese banks don’t have monthly fees, but they do have fees for just about everything else. The main two fees most people need to be concerned about are ATM fees and furikomi (domestic transfer) fees.

    With the megabanks, using their own ATMs is often free, but the operating hours of the ATMs are limited. There also may not be one within a convenient distance from you. One reason you see people lining up at ATMs at lunch time on pay day is the desire to withdraw cash curing operating hours from their own bank to avoid paying ATM fees.

    With the net banks, they don’t have their own ATMs, so you can usually withdraw money from convenience store ATMs, and sometimes the ATMs of major banks as well. There will often be a few free withdrawals per month, with more being allotted to those meeting certain conditions, such as having their paycheck deposited to that account, having a related credit card, having a certain balance or certain amount of spending, etc.

    Rakuten is a great example here. Even though they let you limit withdrawals at the 1000 JPY level, if you limited yourself to 5000 JPY per day to prevent impulse spending and watch your budget, you would need to withdraw money a lot more often, and end up paying a lot of ATM fees!

    Rakuten has a “level” system, though, where as you meet more conditions, your level increases, and you can get more free ATM use and transfers. Most net banks have a similar system. (f.e. Sony, Sumishin SBI, and JRE have this style). The thing is, you may not want to keep a large balance in, or have your payroll deposited into an account you use mainly for daily spending, and you may not want to carry around the ATM card for the bank your payroll gets deposited into and bills are paid out of.

    Transfer fees follow a similar pattern to ATM fees in general.

    There are two stand-outs in the area of fees:

    1. JRE bank – Because the infrastructure of JRE bank is in fact run by Rakuten bank, the use of ATMs owned by convenience stores and other banks follows a similar pattern to Rakuten and other net banks – but – You can use “View Altte” ATMs present in JR Train Stations for free! Unlimited for all! No minimum balance requirement or anything like that. This is mainly useful for people in Tokyo, but an amazing benefit. Train stations are open long hours and conveniently located for many people. In a pinch you can still use convenience store ATMs.
    2. Sumishin SBI – Say you’re not in Kanto or you don’t have a JR station anywhere nearby your home or work, well then Sumishin SBI (Neobank) is still a great option. Just for setting up the mobile app with biometric security, you get 5 ATM withdrawals and 5 transfers to other banks for free. That’s more than any other bank I am aware of. The criteria to get 10 withdrawals and transfers is relatively easy to meet, and it’s possible to get up to 20. One way to get to 20 is to sign up for their platinum debit card. This is not free, but may be cheaper than paying ATM fees if you use the ATM a lot – and also comes with 1~2% cash back (depending on campaigns, etc)

    Foreign Language Support

    I’ll start by saying that I don’t think #6 is very important. Usually megabanks like Mitsubishi and SMBC will have good support and lots of branches, but fare poorly in most of the other categories.

    I don’t think #5 is very important either. If you don’t know enough Japanese to use a bank account, learn it. Less than 2% of the population in Japan is foreign, and most of those are Korean and Chinese and learned the language before coming or were born here. There really is no excuse. If you insist on using a bank that supports English well, then you will be limiting yourself severely. (And in this case, look no further – 7 Bank or Prestia are probably the way to go).

    Prestia (Also known as SMBC Trust) is what is formerly known as Citibank before they fled Japan. Citibank targeted wealthy westerners, and so supported English, and Prestia still does. Note that Prestia is one of the only banks to charge a monthly fee just for having an account.

    7 Bank (owned by the same 7&i holdings company that owns 7-11 convenience stores and Ito Yokado supermarkets) mainly targets immigrant workers who want an easy way to send money home, just as people from Philippines and Indonesia. 7-11 ATMs also accept foreign cards and can give guidance in English, making them useful for tourists as well.

    Physical Branch and ATM Locations

    Many of the so-called “net banks” have no physical location at all – that’s why they offer lower fees, better interest rates, etc. Sony bank had one branch in Marunouchi, but that closed during COVID.

    JP Bank and Mega banks have locations everywhere, JP bank basically anywhere there is a post office. It isn’t normal that you would physically need to visit a bank, and most of the banks are out to scam you with overprices investment products and insurance – so honestly I would avoid going to a bank branch when possible.

    If you want to have a branch nearby, then JP Bank or a local bank is best for most people. (Local banks also offer better rates and easier approvals than Megabanks, and are necessary for certain government loans, etc.)

    Prestia has fewer locations than the likes of SMBC and Mitsubishi, but of course the net banks have the most locations in the sense that you can usually use any ATM at 7-11 a few times per month for free. Again, JRE bank is the most impressive if you are near Tokyo, given that nearly every single JR station has a View Altte ATM. In fact, honestly, there are a lot quite far from Tokyo as well, as you can see below:

    Support

    “Support” here means support by other financial institutions, the government, employers, credit card companies, etc.

    For example, with a megabank, it’s guaranteed that your employer will pay you there, the government will deposit your pension there, credit card companies will let you use the account for direct debit, etc. With some of the net banks, this is not always the case.

    Employers will typically pay to any “normal” bank (traditional, regional, local, or net banks), but sometimes not pay JP bank accounts. In this case, you can just convert the account number.

    Pension funds, etc. will often only pay to certain major banks.

    Credit card companies can be picky. For example, you can select Mitsubishi bank as a direct debit source for View card, but you can’t select PayPay bank.

    Likewise, loans payments can often only be debited from accounts at the same bank. (i.e. SMBC might only allow be to debit an SMBC account to pay a home loan). The above is another reason many people have accounts with multiple banks.

    Interest Rates & Approval Rates

    Rates are an area where net banks and small local regional banks almost always win.

    Interest rates come down to simple math. Large brick and mortar institutions that have been around for hundreds of years and have to pay for lots of branch offices obviously have more employees and higher operating costs.

    Even though operating at vast scale has allowed them to out-compete the likes of Citibank and HSBC, it’s hard to compete with net banks that have only a small fraction of the fixed costs.

    Simply put, this means that net banks can typically offer higher savings account rates, lower loan interest rates, and lower fees than megabanks. They have the same insurance and regulation, so there is usually literally no reason to use a Megabank (other than the fact that other people use them).

    On the other hand, approval rates at Megabanks can be lower than net banks. They will often demand more documentation, and be less willing to approve loans. There are certain large banks that will approve loans more easily, but charge much higher interest rates (Resona and SMBC Trust come to mind).

    Loans are also easier to obtain from regional banks and trusts (Think: Bank of Yokohama)as compared to megabanks like Mizuho, MUFJ, etc.

    Most banks will also want foreigners to have Permanent Residency status before handing out large loans, though this can be worked around in many cases by setting up a Japanese company to take out the loan instead. Credit cards can be easier to obtain.

    Conclusion

    This entry was meant to be an introduction, however we will cover specific banks in more detail in the future.

    For now, know that if you need English, then Sony, 7 Bank and Prestia are your main options.

    If you want tight ATM controls, then Rakuten and JRE Bank are your options.

    If you want a lot of free ATM use at all hours, then JRE Bank and Sumishin SBI are great options.

    If you want to set up a lot of automatic transfers and/or set up a lot of virtual debit card numbers for online shopping, consider PayPay bank.

    If you are looking for the best rates and easier approval, avoid Megabanks.

    If you are looking for an account that has wide support, use Megabanks.

    If you need to open an account ASAP and it should have a physical branch nearby, then JP Bank is a good option.

    In reality, If you’re like most people, you’ll probably end up with at least one Megabank and one Net bank account.

  • Basic Bank Accounts in Japan – Opening An Account

    Basic Bank Accounts in Japan – Opening An Account

    If you want to open an account at a major bank, it is as easy as walking into the nearest branch – if you speak Japanese.   If not, you might want to bring a friend.  

    Typically anyone can open an account, so long as you are a legal resident.  This means no tourists, but most anyone else.  There is apparently a rule that you must be here for 6 months or more, but apparently this is enforced by some banks more than others.

    Since a basic bank account does not allow you to run a negative balance or borrow money, there is generally no credit check or credit history needed.  

    You will be asked to provide identification, which for a foreigner might include your MyNumber card, Zairyu card, health insurance card and/or your passport.  You may be asked to provide a copy of your Jyuminhyo (residence record), which you can get from city hall.  They may ask for information on your employer as well.  Basically, the only two real requirements are that you are a legal resident, and you will be in Japan at least 6 months.  

    You may or may not be required to provide an Inkan (Stamp), so you may want to have that made up ahead of time.  Some banks will allow signature instead.  You will need an Inkan eventually if you live in Japan, so you may as well get one made.

    There are two basic types of accounts

    • Futsuu
    • Tozan

    All you need to know is that Futsuu means “normal”.  This is the type of account msot everyone has.  You can accept direct deposits from your employer, and set up direct debits for things like electricity and gas payments.  

    Most banks do not charge any monthly fee for maintaining an account, and don’t charge any fee to open an account either – this means you can feel free to set up multiple accounts at different banks if that’s useful to you.  

    Typically a bank will not let you set up accounts at more than one branch, and will not let you set up more than one account of the same type.  This is one reason why people will often hold accounts at multiple banks.  

    Technically, banks will pay you interest on your balance – but in practice, the interest rates are so low in Japan that you may as well consider the account to be interest free.  

    You can of course earn slightly higher interest by opening a time deposit account (CD), but even then the interest is so low as to not be worthwhile for most people.  

    Typically banks have no minimum balance, but you may get some perks by having a higher balance or setting up direct deposit for your paycheck.  Examples would be reduced ATM or transfer fees.  

    Banks will usually offer you a “Cash Card” (ATM card), which you will probably want to accept.  There are various options, including the ability to use the ATM card at convenience stores such as 7-11.  You might have to pay more when you use a convenience store ATM, but they are usually located more conveniently than your bank’s ATM corner, and almost always open 24/7.  

    Manually Transferring Money

    You can easily transfer money to anyone else’s account using your ATM card, or online – so there is really no need for services like Vinmo or PayPal for domestic payments.  

    The information you’ll need to know to transfer money is the following:

    • The financial institution name or 4 digit code
    • The branch name or 3 digit code
    • The account type (Probably Futsuu)
    • The account number
    • The account holder’s full name in Katakana

    If you know those pieces of information, you can transfer money from your account using your ATM card, or with internet banking.  You may need to at least be able to read enough Japanese to select the bank name and branch name from a list, or enter the first few characters into the ATM or internet banking.  

    Once you have entered the bank, account type, and account number, one of two things will happen:

    1. The ATM/web site will display the account holder’s name in Katakana
    2. The ATM/web site will ask you to enter the account holder’s name in Katakana

    Either way, the purpose here is to confirm that you didn’t mess up the information and that the person (or company) you are sending money to is correct.  Once you have confirmed this, then the payment will go through.  Once you have sent the payment, the money is gone, and there is typically no easy way to get it back.  

    The checks are typically done in real-time, but if somehow the payment was sent to an invalid account, the money would be returned within a few days.  Otherwise, the money now sits in the account of the person you sent it to.  

    You can of course use this method to send money between your own accounts.  

    Note: JP Bank uses a different system, but the account information can be transformed to conform to the system listed above.  

    Transfers used to only take effect during business hours on business days, and could take several hours if you were sending to a different bank.  This meant that even if you sent money on a weekend or holiday, the money would not arrive until the next business day (even though it would disappear from your account immediately).  

    Recently, there is a new “instant transfer” system being instituted at most banks.  This system will always transfer the money in less than 10-15 minutes between participating banks, any time of any day (unless they are undergoing maintenance).    You don’t need to opt into this in most cases, it’s automatic.  

    Not all banks subscribe to this new system, though, so if you have an account that doesn’t (like Prestia), then you might need to wait a bit longer for transfers to  clear.  

    Where do you find the information for your bank, branch, and account number?  The branch and account number are printed on your cash card.  

    Note that because you can just transfer money to anyone, any time: Personal checks aren’t really a thing.  

    Passbook  vs. Eco

    Japanese accounts traditionally issue Tsucho (Passbooks), which can also be used at the ATM, and will print a record of your transactions.  More recently, banks are pushing “Eco” accounts, which do away with the passbook.  It’s most cases, it’s your choice.  You can usually get both a passbook and an cash card (ATM card) on the same account.  It is expected that passbooks will eventually be phased out – as some banks already charge extra for the use of passbooks.

    Note that banks don’t typically send paper statements since the idea is that you have a passbook instead, or reference your statement online if you have subscribed to Eco Tsucho.  Bear in mind that if you need an official paper record of your balance for a loan application, visa application, etc. and you have switched to a passbook-less account, then you may need to ask for a balance statement printout.  This can be a hassle and take several days.  The bank will also not retain your records forever – so you might want to save or print your bank data once per year if you might need to check it later.

    Debit Card Features

    Banks will also sometimes ask you if you want to have a debit card feature on your ATM card.  This has nothing to do with the “Check Card” type feature often offered by foreign banks where you get a Visa logo or something like that.  If a mega bank asks you about a debit card feature, they are likely talking about J-Debit, which is a system that lets you pay with your ATM card at some merchants, such as Bic Camera.  

    The Check Card,  or Visa Debit card type feature  has also become available at many banks over the past few years.  This is typically called a “Shopping Card” by the big banks. 

    Sometimes this will be a debit card that has both a credit card number and cash card features, sometimes there will be two separate cards issued.  I believe the reason for this is that the IC part of the card could be Visa, or Cash, but not both, so there was a decision to be made by the banks about whether to use only Mag Stripe for  one feature, or wanting to have the extra security of using IC for both.

    Another thing to consider is that like real credit cards, check card style cards have expiration dates, whereas normal Cash cards issued by Japanese banks do not.  The larger banks tend to issue the cash cards and shopping cards as two separate cards. Recently, cards combining both features are becoming more common. For example, SMBC Olive combines Cash Card (ATM), Debit card, and credit card features into a single physical card.

    For example:

    • SMBC offers a Visa debit card that supports both Visa contactless payment and iD debit.  It has an IC chip so you can use it at stores, and a number printed on it which you can use online.  It also has a PLUS logo on the back, which I believe means that it can be used for cash withdrawels overseas.
    • MUFJ offers a Visa debit card that supports Visa contactless, but not iD or QuickPay, making it less convenient in Japan.  
    • Rakuten bank offers Visa or JCB built into their cash card if you apply for it.  
    • Prestia (SMBC  Trust) offers a multicurrency combined Cash & Shopping (debit) card that works with Visa Touch and iD Debit.  
    • JP Bank recently started offering Visa debit cards as well, and their cards are integrated debit/cash cards.
    • Sony bank offers a multicurrency combined visa debit/cash card.  
    • au Jibun Bank only offers a basic ATM card, but their app will generate a virtual card with a number than can be used for online shopping, and QuickPay contactless payment from your phone.  

    Most banks will issue a shopping card with Visa or JCB, and a few with Mastercard.  Some banks, like Rakuten bank will allow you to choose.  Being Japan, I would choose JCB if given the option, but if you plan to use the card overseas, then Visa or Mastercard may be a better option.  This includes if you want to use the card to pay for subscriptions to overseas web sites, etc.  (though bear in mind this won’t work with some sites anyway, if they want to verify your address and don’t support Japanese addresses).  

    Some shopping cards will  support Visa Touch, iD, or QuickPay.  iD and QuickPay are the native Japanese options for postpaid (or in this case, real time debit) contactless payment, Visa Touch may work overseas.  Some cards even have both, or have one built into the card, but will let you set up the other on your phone.  You really want to get both, because iD and QuickPay are supported many more places in Japan than Visa Touch.  These options will deduct money from your account the instant that you use them, and so require a balance in your account, but they don’t need to be charged.  

    Some banks will issue cards that include other forms of contactless payment, including Waon (Aeon Bank), Nanaco (Seven Bank), EDY (Rakuten bank), Suica (JP Bank and others).  These are all convenient, especially the Suica (since you can use it to ride the bus, subway, and train), but they are prepaid, and have to be charged before you can use them.  You can charge the Suica and Nanaco cards at any 7-11 ATM, and of course Suica can be charged in train stations as well.  

    It’s interesting to note that a new trend is that many new credit cards are “numberless” (often called “NL”), meaning that they don’t have any number on them at all, and there is no mag stripe.  They only work with an IC reader.  This means they can’t be used for online  purchases, but they may allow you to generate temporary numbers on their net banking site or app.  This trend may filter over to debit cards in the near future.  A separate card with a credit card number printed on it is often shipped with these cards – this card can be kept safely at home and used for online purchases.

    Apps

    Most banks now have smartphone apps, though what you can do in these apps differs wildly between banks.  Some only allow you to check your balance, while others will act as an OTP, allow transfers, set up contactless payments, and sometimes even withdrawals & deposits.  In particular, PayPay bank and au Jibun bank both have apps that allow you to scan a QR code at the ATM and withdraw or deposit money without an ATM card.  Seven Bank even allows the use of facial recognition at 7-11 ATMs.

    OTP Tokens

    Many banks allow you to request onetime password tokens.  These will either be in the form of a physical token or a special app that allows you to generate a code which you must input to the web page in order to proceed with transfers, etc.  For example, Mitsubishi UFJ bank will give you a physical token or you can set up their app to generate codes.  Often times, the app will be free, but there will be a small charge for a physical token.  The physical token is better in some ways, as you won’t need to worry about anything when upgrading your phone, and it isn’t likely to be prone to hacking.  

    Rakuten bank doesn’t have an OTP token as an option last time I checked, but they send one time passwords to your email instead.

    What the OTP token is required for, and how it is used also vary between banks.  For example, most banks just require you  to press one button and generate the code which you enter – but JP Bank requires you to enter the transferree’s bank account number into the OTP in order to generate the token code.  When registering a payee for PayPay bank, you can decide whether OTP will be required to make transfers to this payee in the future, but some banks will just always require the OTP code for any transfer.  

    Direct Debits

    As mentioned above, direct debit can be set up to let money be withdrawn automatically by credit cards, utilities, etc.  This is something that in general needs to be requested to the company in question, and they will forward you request your bank.  Your Inkan (stanp) is typically required for the paper application form you must fill out.

    Sometimes these forms can be filled out online, and after filling out the portion on the company’s site, they will often forward you to the bank’s site, where you will be required to log in, and probably enter your OTP.  

    Some banks, such as PayPay will let you see a list of currently authorized transfers, and cancel them from the site.  Most banks, however don’t have this feature.  

    You can think of this as a “Pull” feature, as Tokyo Gas, Nuro Internet, Docomo Phone Service, etc., will initiate the transaction and “pull” the money from your account each month once you authorize them to do so.  

    You can also use your shopping debit card to set up payment for the comanies that support that – the main difference from a practical point of view is that shopping card transactions will show up on your online statement or passbook as something like “DEBIT 0234” instead of something more specific like “Tokyo Electric”. This will often incur a small fee, in contrast to using direct debit, which will usually be free.

    If there is no money left in your account, there is typically no “insufficient balance fee” from the bank – the transfer simply doesn’t go through.  Some companies will try the debit again at the end of the day, or the next day.  Other companies won’t, and so you will need to then send them the money another way.  Usually this will mean either manually transferring the money to an account they give you the information for, or using a card to deposit the money.  (For example, if you have a Marui credit card, you can deposit money to pay off your balance using cash by using a Marui ATM at one of their department stores).  

    Not all companies will allow direct debit from all banks.  For example, View Card will not allow you to set PayPay Bank as a direct debit source, but they will let you use MUFJ.  This is unlikely to be an issue if you use one of the Megabanks.  

    Post Card Payments (Paper Invoices)

    Many bills will show up in your mailbox as postcard type pieces of paper with a bar code until you set them up to be paid some other way (such as the direct debit mentioned above).  These can include utility bills, credit card bills, tax bills, and more.  

    The typical way to pay these is to take them to the convenience store and pay in cash (or Nanaco electronic money) at the cash register. 

    There are apps and banks that will let you pay these paper invoices by scanning them with a smartphone app and deducting the money from your bank account – but often with a service fee.  

    Automated Transfers

    Surprisingly, most banks don’t have “Push” features to automatically send money to other accounts.  Some, such as PayPay do, but these may incur transfer fees.  If this is important to you, you may want to have your pay deposited into the account with the automated transfer feature, and then this bank can send the funds elsewhere is required.  Obviously, when pushing money, the amount needs to be determined beforehand, so this can’t really be used for things like utility bills which change every month.  It can be used for things like rent, however.  

    Some companies will allow you to split your pay and have it split up and deposited into more than one account, but many don’t want to deal with the hassle.  If your company supports it, this may be one option to fund multiple accounts.  Also, some companies allow you to specify one account for standard payroll, and another for bonuses.  

    On the other hand, something that most banks do offer is automated import of money from other accounts on a regular basis.  These typically don’t cost anything, but may be limited to once per month, and the timing is usually predetermined.  For example, au Jibun Bank and PayPay bank offer the ability to transfer money from other banks on a regular basis, but this works something like this:  The money appears from the source account just like any other debit, on the 27th of the month.  The money appears in the destination account on the 4th of the following month.  This type of transfer usually needs to be set up well ahead of time, and is intended for long term use, for example to move money to a account every month for savings purposes, etc.  

    Real Time Debits

    Some accounts and services have the ability to be linked in such a way that they will immediately withdraw funds from your account for a specific purposes.  A good example of this is that most banks have a related company that operates brokerage accounts, and it is typically possible to set things up so that you can transfer money from your bank account to the brokerage account in real time in order to invest.  This feature is often called “Money Bridge” or similar.  For example, Rakuten Bank and Rakuten Securities can be used in this fashion.  

  • Why Foreign Banks Can’t Compete in Japan

    Why Foreign Banks Can’t Compete in Japan

     As I am sure most people know, banks accept deposits from customers, and then pay interest.  This costs the bank money.

    Banks also typically lend money out for business loans, home loans ,and other types of loans on which they of course charge interest.  

    Basically, the way banks have historically made profit is that they borrow money from depositors, lend that money out, charge interest, pay some percentage of that back to the depositors, and keep the rest for themselves.  

    Here are some average numbers from the United States as of the end of 2022.

    • Car Loan – 3.3% – 5.99
    • Savings Account – 3.3% – 4.35 %
    • Standard Home Loan – 5.5% – 6%
    • Business Loans (bank) – 4.2% – 4.5%

    As an example, an average consumer might put money into the bank, which pays them 3.3% interest.  The bank lends that money out as a home loan at 6%.  That gives them a 2.7% margin.    Since the banks have many millions of depositors, many thousands of home loans, and are operating billions of dollars, this more than covers their cost for renting expensive bank buildings and paying their employees, and leaves plenty of profit for returning to investors, expansion, etc.  

    Sadly banks in the US have gotten into less honorable, but more profitable operations such as pay day loans, title loans, excessive fees, and credit cards – but we’ll leave that discussion for another day.  

    The point is: banks in the US, and in most countries, have a large customer base and a wide percentage point spread to work with.  

    So how about Japan?

    I’ll use Mitsubishi UFJ Bank as an example: 

    • Normal Deposit Account (Futsuu Yokin Kouza): 0.0010%
    • Variable Rate Home Loans: 0.345% – 0.475%

    Yes, you read that correctly: The interest rate they charge on home loans is less than half a percentage point in the most expensive case!  10 year fixed rate loans are closer to 1%, but that’s still extremely cheap compared to most countries.  

    These rates aren’t special to Mitsubishi either.  As of this writing, Sony bank charges 0.397% (if you put a 10% deposit), and SBI Shinsei Bank charges 0.320%

    What that means is that the bank has to lend out the money, collect the payments, pay their rent, employee payroll, IT fees, utility bills, taxes, pay for losses on bad loans, and then pay interest back to the depositors.  It’s no wonder the rate on deposit accounts is essentially zero.  

    If you are willing to lock your money away for a year or more, then you can get an increased rate of return, say.. 0.0020%!  

    Having to live on a margin of less than 0.5% of interest requires massive scale and low costs.  A foreign bank operating in Japan is by its very nature likely going to have a small scale and higher costs.  

    Difficult Market Conditions in Japan:

    • Low Interest Rates: Japan’s prolonged period of ultra-low, and at times negative, interest rates made it difficult for retail banks to generate significant profits from traditional lending and deposit-taking activities.
    • Intense Competition: The Japanese retail banking market is highly competitive, dominated by large domestic megabanks (like SMBC, MUFG, Mizuho) with extensive branch networks and deep customer bases.
    • Small Market Share: Despite its long history in Japan (entering in 1902), Citibank’s retail banking market share remained relatively small.
    • High Operating Costs: Despite efforts, foreign banks often faced higher operating costs in Japan compared to local counterparts, including staffing, real estate, and compliance. Operating in Japan’s highly regulated financial sector still incurs significant compliance costs and requires navigating complex local rules, especially for foreign institutions that may not have the same deep-seated relationships with regulators as domestic banks.

    Because of this, the two main foreign banks operating in Japan both closed their retail branches in the past 10 years.  

    HSBC

    HSBC closed all of their retail/consumer operations and fled a number of years back.  Their branches were simply closed as they said goodbye to their customers.  

    Cultural and Operational Mismatches: Some analyses suggest that HSBC struggled with an “ethnocentric” approach in its Japanese retail operations. This includes:

    • Language Barrier: HSBC’s internal official language is English, which created challenges for recruiting bilingual local staff and daily communication.
    • Centralized Decision-Making: HSBC’s more centralized decision-making process clashed with the more consensual, decentralized, and often slower decision-making culture prevalent in Japanese organizations.
    • Employment Practices: Difficulties aligning with Japan’s “lifetime employment” culture and the challenges of dismissing staff. (It isn’t easy to terminate employees in Japan).
    • Technical Incompatibility: Issues with standardizing global ATM and internet banking systems to meet specific Japanese market requirements.
    • HSBC had also faced global scrutiny and fines related to anti-money laundering (AML) practices, which further underscored the need to consolidate operations and focus resources on core, compliant businesses.

    Exit from Japan:

    • As part of its exit, HSBC sold its Japanese private banking business (targeting ultra-high-net-worth individuals) to Credit Suisse Group AG in late 2011/early 2012.
    • For its broader Premier and retail banking services, HSBC phased out operations, gradually closing its branches and assisting existing clients in moving their assets to other banks and financial institutions.

    In essence, HSBC’s exit from Japanese retail banking was a strategic decision to withdraw from a market where it faced intense competition, low profitability, high operating costs, and cultural/operational hurdles, allowing it to reallocate resources to areas like corporate banking and asset management where it believed it could achieve better returns globally.

    Citibank

    Citibank also operated in Japan, essentially catering to rich foreigners, and also closed.  In many retail markets, including Japan, Citibank was a relatively small player compared to dominant local banks. Competing effectively in a saturated, low-interest-rate environment like Japan’s retail banking market was challenging and didn’t align with Citibank’s desired returns. This was not just to profit crunch, Citibank Japan was punished by the Japanese government multiple times for dealing with the Yakuza, as well as deficiencies in its governance, internal control, and business management systems.

    In the case of Citibank, though, SMBC Trust Bank took over the operations, absorbing Citibank Japan into  SMBC Trust Bank in 2015, and branding it “Prestia”.

    Because of this history Prestia is one of the only banks  where most everything is available in English, and one of the only banks to charge a monthly fee just for having an account (Depending on your balance).  

    Strategic Advantage for SMBC Trust Bank:

    • Acquisition of Desirable Assets: For SMBC Trust Bank, acquiring Citibank Japan’s retail operations was a strategic move. Citibank had a base of affluent, globally-minded customers, many of whom were expatriates, with significant foreign currency deposits and a preference for global financial products. This niche was attractive to SMBC Trust Bank, which aimed to expand its private banking services and enhance its foreign currency funding base.
    • Expertise and Brand: SMBC Trust Bank also gained Citibank’s know-how in foreign currency investment management, product development, and the established “PRESTIA” brand, which was well-known among a specific segment of the Japanese and expat population for its global services.
    • In essence, Citibank’s exit from Japanese retail banking was a calculated decision to shed a less profitable, high-compliance-cost segment in a challenging market, allowing it to reallocate resources to more lucrative global wealth management and institutional businesses where it held a stronger competitive advantage. The repeated regulatory issues in Japan likely accelerated this decision.
  • Basic Bank Accounts in Japan – Types of Banks

    Basic Bank Accounts in Japan – Types of Banks

    Overview

    Even though cashless payments are becoming increasingly prevalent, there are still many instances where traditional banking services are essential – whether it’s for sending money, withdrawing cash, or arranging a loan. In fact, you typically need an account just to receive your salary or pay your rent. What might surprise some is the variety of banking institutions we have.

    There are several national mega banks, numerous regional and local banks, as well as many online banks.  The lines between these are a bit blurred in some cases, but these are the three main categories for practical purposes.  

    Mega banks

    When most people outside Japan, or even new residents, think of a “bank,” their minds likely jump to the large “Mega-banks.” These are the titans of the financial world here, with their imposing, modern branches dotted across major cities and beyond. They offer a comprehensive suite of services, ranging from standard savings and checking accounts to complex financial products like mortgages and investment vehicles, catering to both individual and corporate clients. Their extensive ATM networks and robust online banking platforms make them incredibly convenient for everyday use.  

    Many older and/or conservative people feel that megabanks are somehow “safer” than the other types of banks. This has no basis in reality since all banks are required to follow the same rules and to have the same deposit insurance.

    Examples of Mega Banks:

    • Mitsubishi UFJ Bank (MUFJ) (三菱UFJ銀行)
    • Sumitomo Mitsui Banking Corporation (SMBC) (三井住友銀行)
    • Mizuho Bank (みずほ銀行)
    • Japan Post Bank (JP Bank) (ゆうちょ銀行) – Run by the post office – See more about this below.
    • Resona Bank　（れぞな銀行）

    Regional Banks

    Moving down in scale, we have the “Regional Banks” (地方銀行 – chihou ginkou). As their name suggests, these institutions operate primarily within specific prefectures or regions. They often possess a deeper understanding of the local economy and community needs, which can translate into more tailored services for residents and local businesses. Many people appreciate their more “hometown” or familiar feel compared to the larger institutions.

    Regional banks are often willing to give loans to people that megabanks aren’t, and sometimes have better interest rates and lower fees.

    Examples of Regional Banks:

    • Chiba Bank (千葉銀行)
    • Yokohama Bank (横浜銀行)
    • Tokyo Star Bank (東京スター銀行)
    • Fukuoka Bank (福岡)

    A distinct category includes “Shinkin Banks” (信用金庫 – shinyou kinko) and “Credit Cooperatives” (信用組合 – shinyou kumiai). These are unique in that they are member-owned financial cooperatives, similar to Credit Unions in the US. Their core mission is to support and foster the prosperity of their local communities and small to medium-sized enterprises (SMEs). They are generally smaller than regional banks and are often lauded for their community-centric approach and supportive services for local entrepreneurs.

    Often government loans and grants (f.e. small business support programs) require the use of a these institutions.

    • Tokyo Shinkin Bank (東京信用金庫)
    • Setagaya Shinkin Bank (世田谷信用金庫)
    • Hyogo Shinkin Bank (兵庫信用金庫)
    • Kobe Shinkin Bank (神戸信用金庫)

    Net Banks

    In recent years, “Internet-only Banks” (ネット銀行 – netto ginkou) have seen a significant surge in popularity, particularly among a younger demographic and those who prioritize digital convenience. Operating without physical branches, they leverage technology to offer services entirely online. This often results in competitive advantages like lower transaction fees, more attractive interest rates on deposits, and highly intuitive mobile applications, making them a preferred choice for many digital-savvy users.

    A recent phenomenon is the emergence of Banking as a Service (BaaS) and “Virtual banks”. This allows companies without a banking license or infrastructure to launch a bank with their own branding and financing. These include (for example) JRE Bank and Takashimaya Neobank.

    Examples of Online Banks:

    • Sony Bank (Moneykit) (ソニー銀行)
    • SBI Sumishin Net Bank / NEOBANK (SBI住信SBIネット銀行)
    • Seven Bank (セブン銀行) – (Run by 7&i, the holding company of the popular 7-11 convenience store chain).
    • Rakuten Bank (楽天銀行)
    • JRE Bank (Run by Japan Rail East with the infrastructure provided by Rakuten Bank)
    • PayPay bank (Previously Japan Net Bank) (PayPay銀行)
    • au Jibun Bank　（auじぶん銀行）
    • Aeon Bank (イオン銀行)

     More about Japan Post Bank

    Japan Post bank started as the “Postal Savings” system in 1875, based on a similar system that was in place in the UK. The primary goal at the time was to provide a simple, secure, and universally accessible means for the public to save money.

    We listed this in the megabank section above, and it is a mega bank, but it is a bit different from the others. Japan Post Bank is distinctive because it was historically an arm of the national postal service, its immense network is unparalleled. Thanks to its origins, Japan Post Bank has service points (or at least ATMs) in virtually every post office across the archipelago, making it incredibly accessible, even in the most remote rural areas where other banking options might be scarce.

    Investment Banks

    Investment banks (証券) are also common, but not really considered “banks” in Japan. These allow you to trade stocks and bonds, etc., but require a separate type of license, and are often linked to a “normal” consumer bank.  

    Examples:

    For example, Rakuten Securities is a separate company set up by Rakuten that lets you set up investment accounts. You can set up a normal Rakuten account at Rakuten bank, an investment account at Rakuten securities, and link them for easier transfers. The same situation applied to SBI and other companies.

    Personal Experience

    I’ve had accounts at 2 of the commercial megabanks, numerous net banks, one regional bank, and JP Post.

    Summary

    This has been a brief overview of the diverse banking landscape here in Japan. Each type of institution serves a particular niche and contributes to the overall financial ecosystem. It’s quite fascinating when you consider the unique roles they each play in our society.

    • Megabanks will have the most branches around the country, and you can walk into one any time you need to do some paperwork, etc.  
    • Regional and local banks will often offer your better deals on interest rates, etc., but may not have ATMs all around the country.  
    • Online banks will generally offer the best deals, and the best online banking, but have few or no physical branches.  The other banks also have online banking, though the available features often lag behind the online banks.
    • Japan Post Bank has the most locations of any bank in Japan.