[Power to Increase] “Which industries benefit when interest rates rise?” — 5 types that are strong in a world with interest rates, and how to apply this to your household …

“I heard that when interest rates rise, some industries benefit while others lose. Which ones benefit?”

I came across this question. At its September 2026 monetary policy meeting, the Bank of Japan raised its policy interest rate to 1.25%. This is the highest level since 1995. From a long-lasting “world without interest rates” to a “world with interest rates.” This change is not just a news story; it also affects decisions regarding career changes, side jobs, and investments.

To put it simply, those who benefit from rising interest rates are “those who lend money,” “those who hold and manage money,” “those who can profit from inflation,” and “those who have no debt.” Today, I will organize these five representative types and how you can apply this to your own household finances.

Those who “lend and manage money” are strong when interest rates rise

Interest is the “rental fee” you pay when borrowing money. When interest rates rise, the burden on the borrower increases, and the income of the lender increases.

This is the same for both companies and households. People with home loans see their repayments increase, while those with savings see their interest income increase. For companies, those with high debt face heavier interest payments, while those that lend or manage money find it easier to increase their income.

Whether rising interest rates are a tailwind or a headwind depends on “which side you are on.”

5 types that are likely to benefit

Here are five representative types that are said to benefit from rising interest rates.

1. Banks

The basic business of a bank is to lend money collected from deposits to companies and individuals to earn interest. When interest rates rise, the spread between lending rates and deposit rates tends to widen, making it easier to increase profits.

2. Insurance companies (especially life insurance)

They manage the collected insurance premiums over the long term through government bonds and other assets. When interest rates rise, the investment yield increases, making it easier to generate profits. We will look at the mechanism in detail in the next chapter.

3. Securities companies

In addition to stock trading commissions, the interest from “margin trading,” where they lend money for customers to buy stocks, is one of their pillars of revenue. When market interest rates rise, these lending rates also tend to rise, which acts as a tailwind for earnings.

4. Major general trading companies

They do not benefit directly from rising interest rates. However, central banks raise rates during periods when prices are rising (inflation). During inflationary periods, the prices of resources such as crude oil, natural gas, and iron ore tend to rise, and trading companies that handle large amounts of resources find it easier to generate profits. They are mentioned in the sense that they are “strong during periods when rate hikes are necessary.”

5. Companies with no debt and large cash reserves

This is not about the industry, but about the company’s financial structure. If there is no debt, interest payments will not increase even if interest rates rise. On the other hand, if they deposit their cash on hand or invest in bonds, the interest they receive will increase. They pay no more, but receive more. This is the most stable and strong type in a world with interest rates.

The mechanism by which insurance companies benefit from rising interest rates

Among the five, the mechanism of insurance companies is the most difficult to see. An insurance company’s profits are largely generated from three sources.

• Mortality gain: Profit from having fewer people to pay insurance claims to than expected

• Expense gain: Profit from having lower company operating expenses than expected

• Interest margin gain: Profit from having a higher investment yield than expected

What interest rate hikes affect is the third one, the “interest margin gain”.

For example, suppose a savings-type insurance policy promised policyholders a yield of “1% per year.” If interest rates rise afterward and the insurance company can invest at 3% per year, the 2% difference from the promised 1% becomes the insurance company’s profit. The promise at the time of contract remains fixed, while only the investment yield increases. This is why insurance companies tend to benefit from rising interest rates.

Conversely, even if interest rates rise, the promised yield of a savings-type insurance policy you have already contracted will basically not increase. This means it is the insurance company, not the policyholder, that is benefiting.

Caution: Being in the same industry does not guarantee you will benefit

Here, there is an important point to note.

• Insurance companies and banks can also lose money due to the decline in the value of bonds they hold: When interest rates rise, the price of bonds already held falls. Companies that hold many old bonds may also incur unrealized losses

• Trading companies change significantly depending on resource prices: If inflation settles down and resource prices fall, profits will also fall

• “Content of the company” over “industry”: Even in the same industry, results will differ depending on the finances and business content

This article does not recommend any specific company or stock. It is a summary to help you understand the structure of “what kind of companies get a tailwind when interest rates change” and apply it to news and your own judgments.

4 things to apply to your household finances

Looking at the five types, common points emerge. These apply directly to household finances as well.

1. Reduce debt

The strongest in a rising interest rate environment were companies without debt. Household finances are the same. In particular, variable-rate loans and high-interest debt such as revolving payments and card loans will see an increased burden due to rising interest rates. Reducing what you can pay off first is the best defense.

2. Review where you keep your cash

In a world with interest rates, the interest you receive changes depending on “where you keep” your money. Do not just leave it in a regular savings account; compare interest rate conditions and choose where to keep it. For savings-type insurance, it is safe to make a decision after confirming the promised yield and costs.

3. Increase your earning power

The more opportunities you have to invest your available money, the higher the value of your base income becomes. Developing your earning power is a foundation that remains unchanged even in a world with interest rates.

4. Hold assets that are resistant to inflation

Periods when interest rates rise are also periods when prices are rising. If you hold only cash, its value will diminish due to inflation. You should also consider holding assets that are considered resistant to inflation, such as stocks, through long-term, diversified investments.

Practical Memo: 5 Steps to Prepare for a World with Interest Rates

• List your debts: Mortgage, car loans, credit card installments, and revolving payments. Write down the amount, interest rate, and whether it is fixed or variable.

• Pay off high-interest debt first: Revolving payments and card loans are the top priority. Reduce debt starting with the highest interest rates.

• Calculate the “repayment amount when interest rates rise” for variable-rate loans: Use a financial institution’s simulation to check your monthly repayment amount if interest rates rise by 1%.

• Compare interest rates for where you keep your savings: Compare the interest rate of your current account with other options. Keep your emergency fund in a place where it can be withdrawn immediately.

• When you see “interest rate hike” in the news, write a one-line memo on the impact on your household finances: Be aware of whether the impact is greater as a borrower or as a saver.

To do today: Write down one of your debts (loan, revolving payment, or installment payment) including its interest rate (3 minutes).

Summary

When interest rates rise, the following 5 types are more likely to benefit:

• Banks (interest margins tend to widen)

• Insurance companies (investment yields increase)

• Securities companies (interest income from margin trading, etc., increases)

• Major general trading companies (strong during inflationary periods that require interest rate hikes)

• Companies with no debt and large cash holdings (interest paid does not increase, while interest received increases)

What they have in common is being on the “lending/investing side” and the “debt-free side.” Applying this to household finances: reduce debt, review where you keep your cash, increase your earning power, and hold assets that are resistant to inflation. These are all basics, but in a world with interest rates, the difference becomes significant.

On the other hand, there are industries that tend to struggle when interest rates rise. I will organize those in a separate article.

Periods when interest rates rise are also a good time to review your household’s fixed costs. I started by listing my monthly subscriptions and reviewing my fixed costs, which were 14,000 yen per month. That’s 168,000 yen a year. It’s an amount I can put toward paying off debt or increasing my emergency fund.

How do bond prices move when interest rates rise? I have written about how to view “cheaper bonds” in this article.

*This article summarizes general concepts. It does not recommend specific companies, stocks, or financial products. Please make investment decisions at your own risk. The policy interest rate is based on the Bank of Japan’s decision in September 2026.

#PowerToGrow #InterestRates #RateHike #BankOfJapan #Industries #Insurance #Inflation #Debt #AssetFormation