TLDR: See the bold questions at the bottom of the post!
In line with most advice, I am keeping an emergency fund (currently in cash) separate from my investments. I'm the cautious type, so I keep enough to cover expenses for a year, for me that's ¥3m. Currently, it is just sitting my bank account losing money to inflation.
I recently switched my bank account to Rakuten Bank for easy securities linkage etc, and it looks like by linking my securities account I get a preferential 0.28% on my regular account ballance. That's a little better than my local bank's 0.2%.
But I was wondering if I could do any better. I know my family in the UK all keep their emergency funds in high yeild savings accounts that simply don't exist here. I maintain my UK HSBC account and it looks like I still have access to some decent (~4%) rates there. But that has FX exposure and the hassle of international transfers & declaring the interest on my tax returns etc.
I found this page on the Rakuten Bank website. It looks like you can make fixed term deposits for 1 year at a 1% rate. That seems good. The details on this page seem to indicate that the 'penalty rate' for early withdrawal is 10% of the listed rate; so 0.1%? As I'm not planning on touching this money except in case of an absolute emergency, I think it seems like a decent idea. And in case of emergency, I still wouldn't lose anything I had put in, right? I'd just recieve a much lower interest rate.
Have I understood those pages correctly? Anyone else using fixed term deposits for their emergency fund? Any better alternatives? One final question; Do you know if it is possible to have two (or more) separate fixed term deposits? That way in case of a minor emergency you'd only lose the 1% rate on a single deposit…
by Hearthian-Wanderer