You don't need a book on the new NISA system, it's easy enough to fit in a short reddit comment.
With (new) NISA, you can set up to 1,200,000 yen/year as DCA(tsumitate), and invest up to another 2,400,000 yen/year by buying assets using your "growth quota"(seichouwaku), for a total of up to 3,600,000 yen/year.
There is a total limit of 18,000,000 yen investment, which you can theoretically fill in 5 years if you max your yearly investment. However, there is no limit on how long you can hold the assets in the NISA account before you sell. You can fill the entire 18,000,000 total using DCA, but that would take at least 15 years because of the 1,200,000 yearly limit. On the other hand, the growth quota can only make up a total of 12,000,000, so the strategy is obviously to set up your DCA first. If you max that out and still have spare money, then you can look into buying with your growth quota.
The NISA account is tax free, which means that when you eventually sell, you do not need to pay taxes on any gains you have made on your investment.
That's really all there is to be said about the NISA system. Investment in general on the other hand, is a topic one could write a whole book on.
That's not all there's to know about NISA.
What's the withdrawal constraints, what are the tax benefits, what is DCA anyway, What are type of securities & equities involved !
You explained it to someone who would already know quite a lot about this.
OP is clearly a beginner and needs detailed explanation.
I addressed all there is to know about *NISA*. There are *no* withdrawal constraints, and I mentioned that it is tax *free*.
The other points you mention are about investing in general, and I did point out that that is something one could get a book on. Unfortunately, I don't have any good recommendations for such books, and explaining everything that *might be* relevant for OP to know is a bit too much for a single reddit comment. If OP has follow-up questions about the terminology I used or investment in general, I would answer those to the best of my ability.
Thanks to both of you for the comment. I am really a beginner, so there might be a lot to learn from now on. I hope I can get help from seniors like you after learning and have some questions in mind!
No, NISA does not have the concept of "early withdrawal", that's ideco.
If you sell an asset from your NISA account, at any time, the corresponding investment amount will be deducted from your 18M total cap so it can be reused later. That's all.
I think Junior Nisa currently is in a status where a single withdraw necessitates, a complete liquidation of all funds.
You cannot touch it unless you want to liquidate all holdings.
Looked at my kid’s Rakuten account and it says the account continues to accrue tax free until he becomes 18, just can’t add any funds.
You pull out any time now, still tax free, but it must be the full amount as you said.
> ■ジュニアNISAで保有している商品について
> 現在ジュニアNISAで保有している商品は、非課税保有期間5年が経過しても、18歳になるまで、継続管理勘定にて非課税で保有し続けることが可能です。
> なお、継続管理勘定への移管は自動で行いますので、お客様ご自身で対応いただく必要はございません。
> また、2024年以降は18歳未満であっても、ジュニアNISA口座で保有している商品の払い出しや預り金の出金が非課税で行えるようになります。
> なお、非課税で払い出しを行う場合、一部のみを払い出すことはできず、ジュニアNISAで保有する全てのお預かりを払い出した上で、ジュニアNISA口座は廃止となります。
I’m not clear on the cap when selling. So if I max out the growth this year and buy ¥2.4m now, and sell say ¥1m next month, I lose that 1 million Nisa forever? Or does it reset next year and I’m allowed to buy ¥3.4m during next year?
The yearly quota is the same every year, but you open space in the total quota by selling.
Say in your example, you buy 2M with your growth quota now. This means you have (2.4M - 2.0M) 0.4M left on the growth quota this year, and (12M - 2M) 10M left on your total.
Price goes up by 10%, and you sell 1.1M next month. After the sale, you still have 0.4M left on the quota this year, but (10M + 1.0M) 11M left on your total. Next year, you will get the same 2.4M limit to buy on the growth quota.
The quota is calculated using the amount *invested*, not the current value of the asset. At the point of purchase these are obviously the same, but then they start to differ as the price goes up and down, and most likely they differ when you sell. I'm not sure whether they use average cost basis or FIFO to calculate how much of your quota will be opened up. That would be worth checking if you plan to gamble on it. The flipside of not having to pay tax on any profit is that you also cannot deduct a loss to counter taxes on other taxable capital profits.
Still, in theory, if you know prices will tank into the new year and then recover later, it is a legit play to sell before it's down, to open your total quota without incurring a loss, and then rebuy the same amount at a lower price to have more shares on the same amount of yen counting towards your quota. However, that would be timing the market, and I'm not qualified to give advice on that.
NISA has no penalities when withdrawing.
iDeco on the other hand is locked until you are 60, dies, or become invalid.
Edit: I forgot the NO, very important
May I ask, if I understand correctly using the seichouwaku you can just buy whenever you want for how much you want up to the yearly limit.
But how should I imagine the tsumitate?
Do I set a monthly number that gets invested automatically and can‘t be changed?
> Do I set a monthly number that gets invested automatically and can‘t be changed?
You can adjust the number up or down (though many providers won't let you set the monthly amount higher than the annual limit / 12), but yeah pretty much.
u/m50d said it well, but I will give an example.
I use SBI, and as it was said, they only let me set up to 100,000 (1,200,000 / 12) as tsumitate per month. However, I can change the amount at any time, or I can even split it up into daily transactions, with a limit of 1,200,000 / 365. I can also set up to 2 "bonus months" per year, where you can invest a lump sum into the tsumitate quota. I'm not sure if I can change the bonus month after it has been used (to get more than 2 bonus months in a year), but you could set a 1,200,000 bonus investment for January to fill the entire quota in one go if you like. The details here might differ based on where you do your investments. I'm only familiar with SBI as that's the one I'm using.
Thanks for your example, especially regarding the bonus lump sump payment, that helped.
I recently opened an account with SBI as well but was not 100% sure yet how the tsumitate works.
Thank you!
NISA is tax free HERE IN JAPAN... but one thing I'd love to know is do US taxpayers have to pay any gains on those gains we make here in JP in our NISA?
This is a big concern because if we are just taxed in the US on our gains made in JP NISA then there is no benefit to this account :(
If you’re new to investing, I think you could do with learning about investing basics (how to choose funds, decide asset allocation) more than about NISA, which is quite simple, as others have said.
Take English language investment advice with a pinch of salt as it’s not intended for people investing in a low interest market like Japan (bonds are not such an obvious choice here). However, I found the following YouTube accounts helpful.
[James Shack](https://youtu.be/16bauiT1F20?si=BRd4cAQeokzK0_X1)
[Ben Felix](https://youtu.be/7gkQHSW3hkE?si=Ei_uYB4Oaqm_kGGO)
Some else who is more Japan specific is the chap who runs [smartmoneyasia.com](https://smartmoneyasia.com)
Related question: the nisa s&p500 funds are at all time highs, and the yen is at lowest since 1990. Is it better to wait for either to rebound slightly before purchase?
The tsumitate quota only allows a smaller list of funds, and you can only invest into them via a periodic investment.
The list of funds seems to screen out the high risk leveraged and other derivatives.
The periodic investments can be setup in various frequencies (daily / weekly / monthly) based on your NISA provider.
You don't need a book on the new NISA system, it's easy enough to fit in a short reddit comment. With (new) NISA, you can set up to 1,200,000 yen/year as DCA(tsumitate), and invest up to another 2,400,000 yen/year by buying assets using your "growth quota"(seichouwaku), for a total of up to 3,600,000 yen/year. There is a total limit of 18,000,000 yen investment, which you can theoretically fill in 5 years if you max your yearly investment. However, there is no limit on how long you can hold the assets in the NISA account before you sell. You can fill the entire 18,000,000 total using DCA, but that would take at least 15 years because of the 1,200,000 yearly limit. On the other hand, the growth quota can only make up a total of 12,000,000, so the strategy is obviously to set up your DCA first. If you max that out and still have spare money, then you can look into buying with your growth quota. The NISA account is tax free, which means that when you eventually sell, you do not need to pay taxes on any gains you have made on your investment. That's really all there is to be said about the NISA system. Investment in general on the other hand, is a topic one could write a whole book on.
That's not all there's to know about NISA. What's the withdrawal constraints, what are the tax benefits, what is DCA anyway, What are type of securities & equities involved ! You explained it to someone who would already know quite a lot about this. OP is clearly a beginner and needs detailed explanation.
I addressed all there is to know about *NISA*. There are *no* withdrawal constraints, and I mentioned that it is tax *free*. The other points you mention are about investing in general, and I did point out that that is something one could get a book on. Unfortunately, I don't have any good recommendations for such books, and explaining everything that *might be* relevant for OP to know is a bit too much for a single reddit comment. If OP has follow-up questions about the terminology I used or investment in general, I would answer those to the best of my ability.
Thanks to both of you for the comment. I am really a beginner, so there might be a lot to learn from now on. I hope I can get help from seniors like you after learning and have some questions in mind!
Are there penalties for early withdrawal in case of leaving the country for good?
No, NISA does not have the concept of "early withdrawal", that's ideco. If you sell an asset from your NISA account, at any time, the corresponding investment amount will be deducted from your 18M total cap so it can be reused later. That's all.
Sorry for piggybacking on OP. What about junior NISA? Can we withdraw early if we leave Japan?
Junior NISA stopped on 2023/12/31. You can take the money out anytime now.
I think Junior Nisa currently is in a status where a single withdraw necessitates, a complete liquidation of all funds. You cannot touch it unless you want to liquidate all holdings.
Looked at my kid’s Rakuten account and it says the account continues to accrue tax free until he becomes 18, just can’t add any funds. You pull out any time now, still tax free, but it must be the full amount as you said. > ■ジュニアNISAで保有している商品について > 現在ジュニアNISAで保有している商品は、非課税保有期間5年が経過しても、18歳になるまで、継続管理勘定にて非課税で保有し続けることが可能です。 > なお、継続管理勘定への移管は自動で行いますので、お客様ご自身で対応いただく必要はございません。 > また、2024年以降は18歳未満であっても、ジュニアNISA口座で保有している商品の払い出しや預り金の出金が非課税で行えるようになります。 > なお、非課税で払い出しを行う場合、一部のみを払い出すことはできず、ジュニアNISAで保有する全てのお預かりを払い出した上で、ジュニアNISA口座は廃止となります。
Thank you! I feel like that little "detail" gets glossed over.
I didn’t know until I saw your comment and went to check Rakuten.
I’m not clear on the cap when selling. So if I max out the growth this year and buy ¥2.4m now, and sell say ¥1m next month, I lose that 1 million Nisa forever? Or does it reset next year and I’m allowed to buy ¥3.4m during next year?
The yearly quota is the same every year, but you open space in the total quota by selling. Say in your example, you buy 2M with your growth quota now. This means you have (2.4M - 2.0M) 0.4M left on the growth quota this year, and (12M - 2M) 10M left on your total. Price goes up by 10%, and you sell 1.1M next month. After the sale, you still have 0.4M left on the quota this year, but (10M + 1.0M) 11M left on your total. Next year, you will get the same 2.4M limit to buy on the growth quota.
So it’s worth selling if you feel the price will decrease next year? And that 0.1 profit is not included in the sales calculation?
The quota is calculated using the amount *invested*, not the current value of the asset. At the point of purchase these are obviously the same, but then they start to differ as the price goes up and down, and most likely they differ when you sell. I'm not sure whether they use average cost basis or FIFO to calculate how much of your quota will be opened up. That would be worth checking if you plan to gamble on it. The flipside of not having to pay tax on any profit is that you also cannot deduct a loss to counter taxes on other taxable capital profits. Still, in theory, if you know prices will tank into the new year and then recover later, it is a legit play to sell before it's down, to open your total quota without incurring a loss, and then rebuy the same amount at a lower price to have more shares on the same amount of yen counting towards your quota. However, that would be timing the market, and I'm not qualified to give advice on that.
NISA has no penalities when withdrawing. iDeco on the other hand is locked until you are 60, dies, or become invalid. Edit: I forgot the NO, very important
No penalties
my bad, I meant to type No penalities lol
lol
May I ask, if I understand correctly using the seichouwaku you can just buy whenever you want for how much you want up to the yearly limit. But how should I imagine the tsumitate? Do I set a monthly number that gets invested automatically and can‘t be changed?
> Do I set a monthly number that gets invested automatically and can‘t be changed? You can adjust the number up or down (though many providers won't let you set the monthly amount higher than the annual limit / 12), but yeah pretty much.
I see, makes sense. Thank you!
u/m50d said it well, but I will give an example. I use SBI, and as it was said, they only let me set up to 100,000 (1,200,000 / 12) as tsumitate per month. However, I can change the amount at any time, or I can even split it up into daily transactions, with a limit of 1,200,000 / 365. I can also set up to 2 "bonus months" per year, where you can invest a lump sum into the tsumitate quota. I'm not sure if I can change the bonus month after it has been used (to get more than 2 bonus months in a year), but you could set a 1,200,000 bonus investment for January to fill the entire quota in one go if you like. The details here might differ based on where you do your investments. I'm only familiar with SBI as that's the one I'm using.
Thanks for your example, especially regarding the bonus lump sump payment, that helped. I recently opened an account with SBI as well but was not 100% sure yet how the tsumitate works. Thank you!
Thank you so much for the detailed explanation. Much appreciated!
NISA is tax free HERE IN JAPAN... but one thing I'd love to know is do US taxpayers have to pay any gains on those gains we make here in JP in our NISA? This is a big concern because if we are just taxed in the US on our gains made in JP NISA then there is no benefit to this account :(
If you’re new to investing, I think you could do with learning about investing basics (how to choose funds, decide asset allocation) more than about NISA, which is quite simple, as others have said. Take English language investment advice with a pinch of salt as it’s not intended for people investing in a low interest market like Japan (bonds are not such an obvious choice here). However, I found the following YouTube accounts helpful. [James Shack](https://youtu.be/16bauiT1F20?si=BRd4cAQeokzK0_X1) [Ben Felix](https://youtu.be/7gkQHSW3hkE?si=Ei_uYB4Oaqm_kGGO) Some else who is more Japan specific is the chap who runs [smartmoneyasia.com](https://smartmoneyasia.com)
Thank you so much! I am trying to learn from the basics so I am pretty sure these will help me a lot.
Related question: the nisa s&p500 funds are at all time highs, and the yen is at lowest since 1990. Is it better to wait for either to rebound slightly before purchase?
Retire Japan. The best resource available!
To add to your question, I was wondering if anyone could explain the difference between tsumitate and growth quota?
The tsumitate quota only allows a smaller list of funds, and you can only invest into them via a periodic investment. The list of funds seems to screen out the high risk leveraged and other derivatives. The periodic investments can be setup in various frequencies (daily / weekly / monthly) based on your NISA provider.
retirejapan.com
[RetireWiki](https://retirewiki.jp/wiki/NISA)
Second this and the YouTube channel of Retire Japan as well~
Thank you! I will have a look for sure.