Ordinary Savings 0.5% vs. Government Bonds 2.39%: The Difference is 18,900 Yen per Year | November Offering for Individual Government Bonds Starts November 9, Interest Rates …
The interest rate for ordinary savings at major banks rose to 0.5% on November 2. Even so, compared to the interest rates on government bonds for individuals, the difference is clear.
For the October 2026 offering of government bonds for individuals, all three types reached the 2% range. The 5-year fixed rate is 2.39% per annum, the 3-year fixed rate is 2.07% per annum, and the 10-year floating rate is 2.05% per annum (all before tax). If you deposit 1 million yen, the annual interest would be 5,000 yen for ordinary savings and 23,900 yen for the 5-year fixed rate, a difference of 18,900 yen.
And the next opportunity is just around the corner. The November offering runs from November 9 to November 30, and the interest rates are scheduled to be announced on November 6.
Interest Rates and Mechanisms for the 3 Types (October 2026 Offering, Before Tax)
10-year floating: 2.05% (initial applicable rate): 10 years: interest rate reviewed every six months
5-year fixed: 2.39%: 5 years: interest rate at issuance fixed until maturity
3-year fixed: 2.07%: 3 years: interest rate at issuance fixed until maturity
If you purchase 1 million yen of the 5-year fixed bond, the total interest you will receive over 5 years is 119,500 yen (before tax). A minimum interest rate of 0.05% per annum is guaranteed for all types, and they can be purchased from 10,000 yen in 10,000-yen increments. Interest is paid twice a year every six months, and the principal is returned at maturity.
Comparison with Ordinary Savings and Time Deposits (1 million yen, per year, before tax)
Major bank ordinary savings (from Nov 2): 0.5%: 5,000 yen
Mitsubishi UFJ Bank 1-year time deposit: 0.5%: 5,000 yen
Mitsubishi UFJ Bank 5-year time deposit: 1.0%: 10,000 yen
Government bonds for individuals, 5-year fixed (October offering): 2.39%: 23,900 yen
Looking only at the figure of approximately five times that of ordinary savings, government bonds are overwhelming. However, when comparing, you also need to look at the following points of caution.
Looking only at the figure of approximately five times that of ordinary savings, government
1. Interest is subject to approximately 20% tax
Government bonds for individuals are not eligible for NISA. 20.315% is withheld from the interest paid every six months. Looking at the after-tax interest rates, the 5-year fixed rate is 1.9044715% per annum, and the 10-year floating rate is 1.6335425% per annum.
2. Cannot be cashed in for 1 year
You can cash them in midway after one year has passed since issuance, but in that case, an amount equivalent to the two most recent interest payments (before tax) multiplied by 0.79685 will be deducted. The usability is different from “ordinary savings that can be withdrawn at any time.”
3. The 10-year floating interest rate is not “the same as the 10-year government bond yield”
The 10-year floating interest rate is determined by multiplying the base rate (yield of 10-year interest-bearing government bonds) by 0.66. For the October offering, it was 3.10% base rate × 0.66 = 2.05%. If interest rates rise, interest payments will also increase, but you do not receive the market interest rate as is.
4. The interest rate for the November offering has not been decided yet
The interest rate for the November offering will be announced on November 6. Some estimates suggest that all three types for the November offering will be slightly lower than the October offering (around 2.19–2.21% for the 5-year fixed), but this is just an estimate. Before applying, please check the confirmed values in the announcements from the Ministry of Finance or the handling financial institutions.
Why are government bonds selling well now?
The issuance amount of government bonds for individuals for fiscal year 2026 exceeded 6.1 trillion yen from April to October, already surpassing the initial issuance plan for the fiscal year (5.9 trillion yen). The issuance amount in October was 1.0251 trillion yen, exceeding 1 trillion yen for the third consecutive month. If this pace continues, it is expected to break the record high of fiscal year 2005 (7.2712 trillion yen).
The background is the full-scale arrival of a “world with interest rates.” Ordinary savings rates have also risen, but the increase in government bonds is larger, and the option of “principal-guaranteed 2% range” has become a realistic choice for household savings.
Note that from the January 2027 issuance, government bonds for individuals will be renamed “Government Bonds for Individuals Plus.” The composition of 3-year fixed, 5-year fixed, and 10-year floating, the method of determining interest rates, and the rules for mid-term redemption are said to remain unchanged. Even if the name changes, the numbers to look at remain the same.
3 checks for reviewing where to deposit your money
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Is it money you don’t plan to use?——If it is money you won’t use for more than a year, it is a candidate for government bonds. Money for living expenses and sudden expenditures should safely remain in ordinary savings.
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Should you compare after-tax figures?—2.39% is the pre-tax figure. Please compare it with fixed deposits and other options using the 1.90% after-tax rate.
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Should you wait for the November 6 announcement?—Applications for the November offering start on November 9. Checking the confirmed interest rate on November 6 before deciding is the best way to avoid rushing.
Now that interest rates have risen, keeping money in an ordinary savings account is not necessarily the right answer. However, jumping in based solely on the size of the number is also premature. First, calculate the after-tax interest per 1 million yen and choose a deposit destination that fits your lifestyle.
*This article does not recommend the purchase of any specific financial product. Please check the latest issuance terms in the Ministry of Finance’s announcements.
(Source: Ministry of Finance “Issuance Terms for Individual Government Bonds” announced October 7, 2026 / Mynavi News October 25 & October 27, 2026 / LIMO October 7, 2026 / Rakuten Securities “Individual Government Bonds” sales terms page *All confirmed as of November 5, 2026. Since the interest rates and estimated values for the November offering are not yet announced, please confirm the final values in the November 6 announcement.)