TOKYO - Rakuten Securities held an event for parents and children at the Tokyo Stock Exchange on August 13 to teach families about building assets ahead of the launch of the new Junior NISA program in January 2027.
About 100 parent-child pairs took part in the event, which included a discussion session featuring a financial planner and a tour of the stock exchange.
The new program, commonly referred to as "Kodomo NISA," or Junior NISA, will expand the tax-free investment system to children aged 17 and under. Participants will be able to invest up to 600,000 yen a year, with a maximum tax-free holding limit of 6 million yen.
NISA, short for Nippon Individual Savings Account, is a government-backed program designed to encourage households to build financial assets through long-term investment. Under ordinary taxable investment accounts in Japan, profits from the sale of investments and dividends or distributions are generally subject to tax. Investments held within a NISA account can generate eligible gains and income without those taxes being imposed.
Japan introduced the original NISA system in 2014 and substantially overhauled it in January 2024, making the tax exemption effectively permanent and greatly expanding the amount individuals can invest.
Under the current system for adults, people aged 18 and over can use two investment categories. The Tsumitate Investment Quota is intended primarily for long-term, regular and diversified investment in eligible investment trusts and allows investments of up to 1.2 million yen a year. The Growth Investment Quota permits investments of up to 2.4 million yen annually in a broader range of products, including listed shares and eligible investment funds. Together, the two categories allow annual investments of up to 3.6 million yen, with an overall tax-free holding limit of 18 million yen.
Unlike the NISA system that existed before 2024, the current framework has no fixed tax-free holding period, allowing investors to keep qualifying assets in their accounts for the long term. The system is intended to encourage households to shift more of their savings toward investment and long-term asset formation.
The new program for children represents a further expansion of that framework. From January 2027, the age requirement for the Tsumitate Investment Quota will be extended to people aged 17 and under. While the adult annual limit is 1.2 million yen, the child version will have an annual investment ceiling of 600,000 yen and a maximum tax-free holding limit of 6 million yen. Investments will be restricted to products suitable for long-term, regular and diversified investment.
The arrangement is separate from the former Junior NISA program, which was introduced in 2016 and ended for new investment at the end of 2023. The earlier program allowed investments of up to 800,000 yen a year but operated under the previous generation of Japan's NISA framework.
By allowing families to begin investing for children from an early age, the new system could be used to accumulate funds over many years for education and other future expenses while introducing younger generations to long-term investing.
For securities companies, the expansion also creates an opportunity to establish relationships with customers much earlier in their lives. Children who begin investing through accounts managed with their parents could potentially continue using the same financial institution after becoming adults.
Many of the parents attending Rakuten Securities' August 13 event were already customers of the brokerage, according to the company.
Rakuten Securities aims to deepen families' understanding of the new Junior NISA framework and use its introduction as an opportunity to attract additional customers.
Source: テレ東BIZ
