Japan banks raise interest rates on pension accounts and time deposits

Major Japanese financial institutions are increasing interest rates on savings products. The three megabanks are scheduled to raise interest rates on pension receiving accounts to 0.5% per annum starting November 2, while Japan Post Bank will implement a similar increase on November 9.

In the broader market, there is a significant shift toward short-term time deposits as consumers anticipate further interest rate hikes by the Bank of Japan. au Jibun Bank recently attracted 400 billion yen in just 13 days through a limited-time 1-month time deposit offering a 2.08% annual interest rate. Other institutions, including Sony Bank and Sumitomo Mitsui Trust Bank, are also offering competitive rates ranging from 2% to 2.2% for specific terms or conditions.

This trend follows the Bank of Japan's recent policy shifts, which have moved the economy away from decades of zero or negative interest rates. As of late 2026, the policy rate has reached 1.25%. Consequently, many depositors are moving funds from long-term fixed deposits with low rates into shorter-term products to capitalize on rising yields.