No need to wait for bank interest rate hikes. Thoughts on continuing to use the Rakuten Money Fund

The other day, the Bank of Japan decided on an additional interest rate hike, raising the short-term interest rate (the BOJ’s uncollateralized overnight call rate) from 1.00% to 1.25%.With this, I think more people will start thinking, “I want to deposit my money in a bank with even slightly higher interest rates.” Beyond just the ordinary savings accounts at megabanks, there are also banks like SBI Shinsei Bank and au Jibun Bank that have already announced their revised interest rates, and it has even become a topic of conversation on social media.However, rather than comparing bank interest rates, I strongly recommend that you consider investing using Rakuten Securities’ “Rakuten Money Fund”.I myself keep almost all of the “cash” that should ideally be in a bank account, such as living expenses and funds waiting for investment, in the Rakuten Money Fund.I have introduced the Rakuten Money Fund on Note before. Since then, I have continued to use the Rakuten Money Fund for my investments, and during that time, I have experienced the Bank of Japan’s interest rate hikes several times.And seeing this latest rate hike, I am once again thinking, “This really is a quite excellent product”.The reason is not simply because the yield is high.What I like most is that when the Bank of Japan raises interest rates, the impact is reflected in the yield quite quickly.? The article I wrote previously about the Rakuten Money FundWhat is so good about the Rakuten Money Fund?The Rakuten Money Fund is an investment trust called an “MRF”.I will skip the detailed explanation, but in a word, it is a product that invests primarily in financial products with high creditworthiness, such as government bonds, that have short periods until maturity.To put it simply, it means “investing in extremely safe investment targets. Moreover, investing in targets where the principal will be returned in the immediate future.”.For example, there might be a possibility that a major bank that is currently extremely sound could go bankrupt in three years. However, most people would say there is almost no chance of it going bankrupt in one month.The Rakuten Money Fund is managed by repeating this cycle with such safe investment targets: “invest -> get it back soon -> invest again -> get it back soon”.With ordinary bank savings accounts, even if the Bank of Japan raises interest rates, the deposit interest rate does not increase by the same amount the very next day.This time as well, after the Bank of Japan decided on the interest rate hike from 1.00% to 1.25% on September 18, megabanks and others announced hikes to their ordinary savings interest rates. However, for banks like Mitsubishi UFJ Bank, the hike from 0.40% to 0.50% will not actually be applied until November.The Bank of Japan raised rates by 0.25 points, yet ordinary savings rates only increased by 0.10 points. And you have to wait more than a month until it is applied.On the other hand, because the Rakuten Money Fund is managed in the short-term financial market (a market where professionals lend and borrow funds among themselves), when the Bank of Japan raises interest rates, the yield also moves relatively quickly.I really like this aspect of it.Because you don’t have to go through the trouble of finding a bank with high interest rates, opening an account, and moving your funds every time, as market interest rates rise, the yield of the Rakuten Money Fund naturally follows. Yields rise faster than at banksThese figures are based on past performance.Looking at past numbers makes it very easy to understand.When the Bank of Japan raised its policy interest rate from 0.75% to 1.00% in June 2026, the 7-day average yield of the Rakuten Money Fund rose from 0.657% for the period of June 10–16 to 0.870% the following week, June 17–23.(Responding immediately to the Bank of Japan’s 0.25% rate hike,) it rose by 0.213 percentage points in just one week.After that, it remained between 0.865% and 0.870% in August. During the period when the policy interest rate was 1.00%, the Rakuten Money Fund was quite stable with a yield of just under 0.9%.It is even easier to see when looking at the yield trend graph in the monthly report.Yield trends of the Rakuten Money FundEvery time there is a rate hike, the yield steps up and then levels off at a new plateau. It forms a clean, staircase-like shape.I have been watching the yield of the Rakuten Money Fund for some time, and when the Bank of Japan raises rates, the yield rises in a short period, chasing after the short-term interest rate. This movement is not unique to this time.This time, too, a rate hike to 1.25% has been decided, and while it has not yet reached the 1.25% level, the yield has already begun to rise toward the new interest rate level.Of course, this does not mean that if the policy interest rate is 1.25%, the Rakuten Money Fund will also be 1.25%. Since there are costs such as the “trust fee” which is the manager’s commission, the actual yield will be slightly lower than the short-term interest rate.Even so, there is no need to wait for bank deposit interest rate revisions. I believe this speed of response is a significant advantage for a place to keep cash.What I love about the Rakuten Money Fund!1. Yields start to rise immediately in response to Bank of Japan rate hikes 2. You can obtain a yield close to the short-term interest rate set by the Bank of Japan
Moreover, if you look at the contents, 94% is government bondsInformation as of the time of writing (August 2026 monthly report)When people hear “investment trust,” some may have a high-risk image like an equity fund.However, looking at the contents of the Rakuten Money Fund at the end of August 2026, 94.2% is government bonds.The remaining 5.8% is in short-term financial assets, with Ueda Yagi Tanshi, Central Tanshi, and Tokyo Tanshi each accounting for 1.9%. By rating, 5.8% is A-1.Broadly speaking, the content is “94% government bonds, with the remainder being highly creditworthy short-term financial assets”. Japanese government bonds are bonds issued by the Japanese government. Strictly speaking, the principal is not guaranteed, but they are assets with extremely high creditworthiness. (Technically, government bonds are classified as “risk-free (assets without risk)”).Moreover, the Rakuten Money Fund does not invest in stocks. It is not a product that takes on significant risk aiming for capital gains; its purpose is stable management through highly creditworthy public and corporate bonds with short remaining maturities.The easy-to-understand management method, as mentioned earlier, is to repeat the cycle of “investing ? getting the principal back immediately ? investing ? getting the principal back immediately”.After confirming these details, I consider it “a very reassuring place to park standby funds”.The interest rate difference is significant compared to bank deposits.In August, when the policy interest rate was 1.00%, the 7-day average yield of the Rakuten Money Fund was approximately 0.87%. On the other hand, the ordinary deposit interest rate at Mitsubishi UFJ Bank was 0.40% as of September 17.Approximately 0.87% versus 0.40%. That is a fairly large difference.While there are exceptions where higher interest rates are set than the Rakuten Money Fund, such as new account opening campaigns or certain time deposits, “basically, ‘MRFs’ like the Rakuten Money Fund have higher yields than bank deposits”.Methods like choosing new account opening campaigns or high-interest time deposits require you to hop between various banks.On the other hand, with the Rakuten Money Fund, “it is easy because it follows market interest rate hikes without having to hop between banks”.Although the principal is not guaranteedSince the Rakuten Money Fund is an investment trust, the principal is not guaranteed. It is also not covered by the deposit insurance system (pay-off).However, as mentioned earlier, if you look at the contents, “94% is managed in government bonds,” so the creditworthiness is extremely high.Also, in Japan, there has never been a case where an MRF has fallen below its principal value in the past.The management rules are quite cautious.The Rakuten Money Fund has a rule to keep the average remaining maturity of the assets it incorporates within 90 days, or within 60 days using a method called WAM. For individual securities and financial products, it is also managed so that the time from acquisition to redemption or maturity does not exceed one year.To explain it simply for beginners, “it means that instead of locking up funds for years into the future, it revolves mainly around financial products with short periods until maturity”.Although it is “not principal-guaranteed” by system, if you look at the reality that “more than 94% is government bonds” and “the management period is also quite short,” it is safe to assume that there is almost no risk. (Moreover, you can cancel immediately at any time without restrictions.)”Can be used with the feeling of an ordinary deposit”The Rakuten Money Fund takes one business day to redeem. This is a disadvantage where it is slightly inferior to a regular savings account.However, even saying one business day, it has a sense of speed where if you request a redemption today, it will be converted to cash by tomorrow.Also, Rakuten Securities has newly launched “Rakuraku Money Management.” If you set it up, you can now use the Rakuten Money Fund directly as payment for purchasing domestic stocks and investment trusts.Furthermore, you can also set it up to receive the proceeds from the sale of stocks and investment trusts in the Rakuten Money Fund.For someone like me who thinks, “I want to keep it in cash for now, but I want to buy stocks if there is a good investment opportunity,” it is a product that is quite compatible.I am quite a fan of the Rakuten Money Fund, but I am definitely not a shill for them (lol), and since it is a very good product but not very well known, I wrote this article.? Rakuten Money Fund official website. You can also see the latest monthly report? Previous article on the Rakuten Money Fund? I also write articles like these