A Nippon individual savings account (NISA) is an account that is meant to help residents in Japan save money with tax-exempt benefits. It is modeled after the
Individual Savings Account
An individual savings account (ISA; ) is a class of retail investment arrangement available to residents of the United Kingdom. First introduced in 1999, the accounts have favourable tax status. Payments into the account are made from after-tax i ...
in the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
.
History
NISA was created in 2014 as a way to encourage more people to save for retirement with investments. This was mainly spurred by the studies showing that the majority of Japanese residents had little to no savings for retirement and most of that savings being cash rather than investments.
Features
The account earns tax-free growth up until five years and resets every cycle. Each account is only allowed to invest ￥1,200,000 each year with a total maximum limit of ￥6,000,000 after which anything contributed and any capital gains over the limit is fully taxed. Unlike other retirement tax-deferred accounts, a NISA is only allowed to hold stocks, ETFs, and trusts. Bonds are not permitted in the accounts. This account is meant to be a mid-term investment option for those who don't have iDeCo.
Reserve積立NISA
A new type of NISA account that was introduced in 2018 that has a 20-year tax-exempt with a yearly contribution limit of ￥400,000. Unlike the regular NISA account, this one only allows mutual funds for investments.
Junior NISA
Introduced in 2016, a Junior NISA is modeled after the Junior ISA in the United Kingdom and is meant to help parents and guardians save money for anyone under 20. A Junior NISA has a yearly limit of ￥800,000.
See also
Non-pension products:
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Individual Savings Account
An individual savings account (ISA; ) is a class of retail investment arrangement available to residents of the United Kingdom. First introduced in 1999, the accounts have favourable tax status. Payments into the account are made from after-tax i ...
(ISA), the original account in the UK that NISA is modeled after.
*
Tax-free savings account
A tax-free savings account (TFSA, french: links=no, Compte d'épargne libre d'impôt, CELI) is an account available in Canada that provides tax benefits for saving. Investment income, including capital gains and dividends, earned in a TFSA is ...
(TFSA) (Canada)
*
Livret A
The Livret A is a financial product offered by French banks. Established in 1818 by King Louis XVIII to pay back the debts incurred during the Napoleonic Wars, part of the funds are now transferred to and re-invested by the Caisse des dépôts e ...
(France)
Pensions:
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Superannuation in Australia
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Individual retirement account
An individual retirement account (IRA) in the United States is a form of pension provided by many financial institutions that provides tax advantages for retirement savings. It is a trust that holds investment assets purchased with a taxpayer's e ...
(IRA); the
Roth IRA
A Roth IRA is an individual retirement account (IRA) under United States law that is generally not taxed upon distribution, provided certain conditions are met. The principal difference between Roth IRAs and most other tax-advantaged retirement pla ...
type is similar except for having extra restrictions (United States)
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401(k)
In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodical employee contributions come directly out of the ...
; the Roth 401(k) type is similar (United States)
References
Investment in Japan
Tax-advantaged savings plans
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