Hi,
I understand the importance of keeping an emergency fund thats always readily accessible, ideally partially even in cash. But nevertheless the idea that there is a significant amount of money sitting in a regular bank account collecting non-existing interest also bothers me somewhat.
How do you approach it? is there any deposit that would allow to withdraw money relatevely instantly in case of emergency, but still yielding some decent interest (compared to a bank account)?
by Iekei_ramen
6 comments
Japan is relatively safe country (e.g. you will not suddenly need 10 million yen to pay for a surgery), so you don’t need a big emergency fund.
A month/two worth of expenses (or a bit more if you are not permanent resident/you might need to suddenly move) on a separate account + everything else invested in stock is a good option.
If you’re with Shinsei you can consider Power Yokin. There’s no lock-up and you can deposit and withdraw directly from the yen savings account without much setup.
Unfortunately the interest is bad, but that’s probably the best if you want it as liquid as possible. Though I personally won’t recommend any fixed deposits with minimum time lockups for parking emergency funds.
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In case you haven’t seen it, there’s a list of some of the higher interest rate bank accounts available for yen [in the wiki](https://japanfinance.github.io/handling/banks/#interest-rate). They are still low, but often they’re better than even the term deposit interest rates.
I have about 3 million yen in the short-term (1-3 months) US Treasury bill ETFs. I use this fund as my “dollar wallet.” When I need money, I can sell the funds and withdraw the money after a few days.
Because the ETFs invest in treasury bills with very short maturity periods, they are *less* affected by macroeconomic policies. The dividend is about 2% at this moment. Although the principal is not guaranteed, it’s better than leaving yen in a bank account with almost zero interest.
Wouldn’t it be easier to just have a line of credit or credit card that is stashed away only for emergencies?
Probably easier to utilize than having to cash some securities out, waiting for settlement, then transferring from investment to bank account, and forwarding it to where is needed.