Rakuten's corporate bond interest rate set at 4.37%. The difference from the 2.39% government bond is about 870,000 yen for every 10 million yen—what are you trading for that …

*Last updated: October 18, 2026 (Rakuten Group’s 26th corporate bond terms were set on October 16; individual government bonds are for the October offering; interest rates are based on the Ministry of Finance’s published figures as of October 15)

For those wondering whether to apply for Rakuten Group’s corporate bonds.

On October 16, the interest rate for Rakuten Group’s 26th corporate bond was set at 4.37% per annum. This is toward the higher end of the preliminary range (3.8–4.6%).

If you hold 10 million yen until the 5.5-year maturity and it is returned as promised, the after-tax interest will be approximately 1.92 million yen. This is about 870,000 yen more than if you had placed the same 10 million yen in the October offering of 5-year fixed-rate individual government bonds (2.39%).

However, this 870,000 yen is not a bonus. It is money received in exchange for accepting two things that government bonds do not have but corporate bonds do. In this article, I will quantify those two things based on the finalized interest rate.

I am the operator of the YouTube channel ‘Investment Summary Library’ (over 7,000 subscribers), which verifies individual government bonds and interest rates using only data published by the Ministry of Finance and the Bank of Japan. I am not in a position to sell financial products. I am neither in a position to recommend nor discourage the purchase of Rakuten Group’s corporate bonds.

The rate is fixed at 4.37%. If you hold it to maturity and it is returned, you get about 870,000 yen more over 5.5 years than with government bonds.

First, here are the finalized terms.

• Interest rate: 4.37% per annum (3.482% after tax). Interest paid twice a year (April 29 and October 29)

• Application period: October 19 (Mon) – October 28 (Wed). Closing times vary by securities company

• Maturity: April 28, 2032 (5 years and 6 months). In 1 million yen units. No collateral

• Credit rating: A- by JCR, BBB+ by R&I

Next, let’s compare using 10 million yen. Since interest is taxed at 20.315%, you receive 79.685%.

• Rakuten corporate bond (4.37%): 348,223 yen per year

• Individual government bond, 5-year fixed (2.39%): 190,447 yen per year

• Difference: 157,776 yen per year

Over 5.5 years, the corporate bond yields 1,915,228 yen, while the government bond yields 1,047,459 yen (assuming the government bond matures in 5 years and the remaining half-year is also placed at 2.39%). The difference is 867,769 yen.

In my YouTube video, since the rate hadn’t been set yet, I provided a range: ‘about 620,000 yen at 3.8% and about 970,000 yen at 4.6%.’ Recalculating at 4.37%, it comes to about 870,000 yen.

Everything up to this point assumes you hold it to maturity and it is returned as promised. The 1.98% difference (4.37% – 2.39%) is the price for two things that might cause that ‘as promised’ scenario to fail.

The first is the risk that it might not be repaid. The second is that the price is not fixed if you sell it midway. I will quantify these in order.

The nature of the difference (1): It might not come back—if you split it among 100 companies, up to 7 defaults are covered, but you are lending to only one.

Corporate bonds are loans to a company. Government bonds are loans to the government. Since companies can become unable to pay, the interest rate is higher to compensate.

So, how significant is that 870,000 yen premium compared to the risk of default? As a yardstick, let’s consider the case of lending 1 million yen each to 100 companies under the same conditions. case.

From companies that pay back, you receive interest higher than government bonds (which we call the ‘premium’ here), amounting to about 87,000 yen per company over five and a half years. From companies that cannot pay back, assume you lose both the principal and the interest. Furthermore, you also lose the interest you would have received if you had kept the money in government bonds (about 105,000 yen over five and a half years).

These two balance out when about 7.3 out of 100 companies fail to pay back. In other words, for someone who lends by splitting among 100 companies, defaults of up to 7 companies are covered by the premium. calculation.

Credit rating agencies publish the percentage of companies that have defaulted within five years for each rating category (average since 2000).

• JCR’s A rating (the category that includes Rakuten’s A-): 0.3 out of 100 companies

• R&I’s BBB rating (the category that includes Rakuten’s BBB+): about 0.8 out of 100 companies

• JCR’s BBB rating (the category including one notch below A-): about 2.2 out of 100 companies

Ratings are considered to have a higher probability of repayment the higher the symbol, with A being above BBB. A- is at the lower end of A, and BBB+ is at the upper end of BBB. JCR and R&I are different companies, and their methods for assigning ratings to Rakuten, as well as how they count historical percentages (the target companies and periods), differ.

The historical average percentages are all smaller numbers than the 7-company threshold. However, this only applies to those who lend by splitting among many companies.

You are lending to only one company: Rakuten Group. The result of lending to one company does not equal the average. It will either be fully returned or only partially returned. Furthermore, historical percentages are averages of many companies and are not figures that can predict the future of a single company.

Also, there are concerning figures in Rakuten’s financial results. The mobile business is still in the red for the first half of 2026 (segment loss of 71.08 billion yen), and R&I states that the financial balance of businesses excluding finance is likely to remain significantly inferior compared to the rating level (I will organize this with the positive figures in the latter half).

Corporate bonds are not deposits, so they are not covered by deposit insurance. The Investor Protection Fund, which prepares for the bankruptcy of securities companies, cannot be used when the issuing company becomes unable to pay.

Therefore, the deciding factor for someone lending to a single company is not probability, but the amount. ‘Is this an amount that wouldn’t change my life even if it didn’t come back?’. It is decided by whether you can say ‘yes’ to this question.

Can you answer ‘yes’ to this question for the amount you are considering for corporate bonds?

The nature of the difference (2): The price if sold midway is not fixed—if interest rates rise by about 1 point in a year, it will fall below government bonds.

The second point is if you sell before maturity.

For individual government bonds, the government will buy them back at a fixed formula one year after issuance. What is deducted is the interest for the last two periods (before tax) × 0.79685, and the principal does not decrease.

Corporate bonds are different. The government does not buy them back; you sell them to a securities company at the price of the day. There are two reasons why the price drops.

One factor is interest rates. When market interest rates rise, newer bonds offer higher rates, so older bonds with lower rates must drop in price to find buyers. Another factor is the company’s creditworthiness. If their credit rating drops or their financial results worsen, the number of buyers decreases even at the same interest rate, making the price more likely to fall.

Here, we will calculate only the portion related to interest rates, which can be measured numerically. According to Ministry of Finance data, the yield on 5-year government bonds has risen by approximately 1.13 points over the past year, from 1.199% (October 15, 2025) to 2.331% (October 15, 2026).

Suppose you buy 10 million yen worth of Rakuten corporate bonds and sell them one year later. The comparison is the approximately 10.039 million yen you would have on hand if you cashed in government bonds after one year (calculated as receiving 190,000 yen in interest, having 190,000 yen deducted upon cashing in, and offsetting the deduction against the interest, resulting in a tax refund of about 39,000 yen).

• If interest rates rise by the same amount as this past year: The price will drop by about 446,000 yen. Even adding one year’s interest (437,000 yen before tax), you are at a loss of 9,000 yen, so the tax paid on the interest (about 89,000 yen) is refunded, leaving you with about 9.991 million yen. This is about 48,000 yen less than government bonds.

• If interest rates do not change: You will have about 10.348 million yen. This is about 310,000 yen more than government bonds.

• If interest rates fall by the same amount: The price will rise by about 470,000 yen, which is about 684,000 yen more than government bonds.

The tipping point is about 0.98 points over one year. If you sell in a year where interest rates rise more than that, you will fall below the government bond return. If the company’s creditworthiness drops, a price decline will be added to this.

This is not a prediction. It is the result of plugging current interest rates and the past year’s interest rate movements into a formula. The calculation assumes a specific account with tax withholding, where interest and losses from sales are offset in the same year. The price actually offered by a securities company may be lower than this theoretical price.

In other words, if you put money you might need to sell midway into corporate bonds, the amount you have on hand will be swayed by that day’s interest rates and creditworthiness. This is where it differs from the government bond promise that “your principal will be returned after one year.”

So, how much of your 10 million yen should you consider putting into corporate bonds?

By now, you understand the true nature of the difference. The risk that it might not be returned and the fact that the price if sold midway is not fixed. Both are things you accept in exchange for 870,000 yen.

So, what determines whether you should lend money to Rakuten? The answer is a combination of two factors. One is the reassuring and cautionary information found in Rakuten’s financial results. The other is when you will need to use your money.

In the second half, I will summarize these two points into a single decision sheet. I have turned the most important question—”the amount you can afford to lose without changing your lifestyle”—into three questions that a couple can answer by looking at the same paper. Even if you are not considering corporate bonds, you can use it as a table to categorize your money based on when you plan to use it.

• Three figures to check in Rakuten’s financial results before applying (weighing reassuring and cautionary information equally)

• A decision sheet to determine how much money to invest in corporate bonds and three questions to verify with your spouse

• The premium for 1 million or 3 million yen and the “worst-case scenario,” and what percentage of the premium the bonus SIM represents

• How much of an interest rate hike would cause you to fall below government bond returns if sold after 1 year or 3 years

• Dates from the start of applications on October 19 to the deadline for October government bonds and the financial results announcement on November 13

I wrote this article because I want to prevent people from deciding solely because “the interest rate is high” and then having one spouse left feeling anxious.

The rest is available to members of the “How to Protect Your Money” membership (980 yen/month, first month free, cancel anytime) and those who purchase this article individually (500 yen). Members can also read the answer keys for four genres of books (roughly two per week) and the monthly report on individual government bonds released on the monthly announcement date.