How to choose a suitable financial institution (securities firm or bank) for opening a NISA account?

Hello! Deciding whether to open your NISA account with a securities firm or a bank is indeed a common dilemma for many beginners. Don't worry, it's not as complicated as it seems. I'll share my own experience and understanding to help you make an informed decision.

Simply put, it's like grocery shopping: do you go to a large supermarket with a wide selection and lower prices, or a convenient but smaller and slightly more expensive convenience store near your home?

Key Differences

When choosing a financial institution, primarily consider these four aspects. Just see which one fits your situation.

1. What do you want to buy? (Product Variety)

This is the most crucial point!

• Online Securities Firms (ネット証券): Such as Rakuten Securities (楽天証券) and SBI Securities (SBI証券).

  • Pros: An incredibly comprehensive product lineup! It's like a giant investment supermarket. You'll find virtually everything you want to buy, including various investment trusts (投信), Japanese domestic stocks, US stocks, and stocks from other countries. Specifically, popular low-cost index funds like eMAXIS Slim All-Country are definitely available.
  • In a nutshell: Offers the greatest freedom of choice; whatever you want to buy, they have it.

• Banks (銀行) or Traditional Securities Firms (対面証券): For example, your usual bank like Mitsubishi UFJ Bank, or a brick-and-mortar firm like Nomura Securities.

  • Cons: Very limited product offerings! Many investment products sold at bank counters are issued by their own group or partner companies, with perhaps only a few dozen types available. Moreover, fees (信託報酬 - trust fees/management fees) are generally higher. They tend to recommend products that earn them more money.
  • In a nutshell: Choices are very limited, somewhat like "specialty items."

2. Do you care about fees? (Cost)

When it comes to investing, lower costs are always better; what you save is what you earn.

• Online Securities Firms:

  • Pros: Extremely low fees, or even free! Competition among online brokerages in Japan is fierce now, and buying and selling investment trusts is largely commission-free. Account management fees are also zero. This allows every penny of your money to be maximized for investment.
  • In a nutshell: Saving money is paramount.

• Banks or Traditional Securities Firms:

  • Cons: Relatively higher fees. Both purchase fees and the product's own operating costs (信託報酬 - trust fees/management fees) are typically more expensive than with online brokerages. You're essentially paying for their physical branch rent and employee salaries.
  • In a nutshell: You pay for "service," but that service might not be worth the price.

3. Do you need hands-on guidance? (Service Model)

• Online Securities Firms:

  • Characteristics: All operations are self-service. You open an account, place orders, and check returns on a mobile app or computer. If you encounter issues, you can call or use online customer service, but you won't have a dedicated account manager contacting you daily.
  • Suitable for: People comfortable with smartphones, willing to spend a little time researching and managing their investments themselves. In fact, current apps are very user-friendly; just follow the instructions step-by-step, and it's completely manageable.

• Banks or Traditional Securities Firms:

  • Characteristics: You can visit a branch, where a dedicated representative will explain things face-to-face and assist you with operations.
  • Suitable for: Those who absolutely don't want to do things themselves, are apprehensive about online operations, and are willing to pay higher fees for this "peace of mind." However, be cautious, as their "advice" may not always be entirely neutral.

4. Do you want to earn some extra perks? (Points Ecosystem)

This is a unique feature, especially in Japan.

• Online Securities Firms:

  • Pros: Deeply integrated with their own point systems.
    • Rakuten Securities: Use a Rakuten credit card for monthly NISA regular investments and earn Rakuten points. You can also earn points based on assets held in your account. Accumulated points can even be used directly for investment!
    • SBI Securities: You can use a Sumitomo Mitsui credit card (e.g., Olive) for regular investments and earn V Points. These points can also be used for investment.
  • In a nutshell: You can earn rewards while investing; why not?

• Banks:

  • Cons: Generally do not offer such attractive point programs.

Conclusion and My Recommendation

Final Advice for the Average Person:

Unless you meet all of the following conditions:

1. You are not sensitive to money and don't mind paying an extra 1-2% "tuition fee" annually.
2. You strongly dislike and distrust online and mobile app operations.
3. You specifically need someone sitting across from you to feel at ease.

Otherwise, do not hesitate to choose a large online securities firm, such as Rakuten Securities or SBI Securities.

For the vast majority of people, especially those of us planning to utilize the "Tsumitate NISA" (regular investment quota) for long-term investing, online securities firms offer an overwhelming advantage in product selection and cost control. This directly impacts your ultimate returns over the next few decades.

The account opening process can now be completed online, which is very convenient. Take the first step and try operating it yourself; you'll find it much simpler than you imagine. Turning saved fees and earned points into more investment capital, and letting your money work for you – that's the right way to use NISA.