<h3><b>The difference is significant because investment trusts have long investment periods!</b></h3>
<p><span style="font-weight: 400;">In response to the legal revisions in March, major online securities firms have successively raised the limits on credit card investment trusts. Credit card investment trusts allow investors to make regular investments in investment trusts through credit card payments, with points being rewarded based on the investment amount. However, the point redemption rates vary among securities firms, and the difference is certainly not negligible. So, which online securities firm offers the best deal now? Let&#8217;s hear from financial writer Kenji Matsuoka for an explanation.</span></p>
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<figure id="attachment_364922" class="wp-caption alignnone" style="width: 640px;" aria-describedby="caption-attachment-364922"><a href="#" data-ident_hash="ada2f768"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2024/03/125d85eb05da972bc21dcd763daccc65-1.jpg" alt=""></a><figcaption id="caption-attachment-364922" class="wp-caption-text">The maximum amount of &#8220;credit card savings&#8221; has been raised from 50,000 yen to 100,000 yen per month&#8230;</figcaption></figure>
<h3><b>The NISA accumulated investment limit of ¥100,000 per month also includes point rewards.</b></h3>
<p><span style="font-weight: 400;">On March 8, 2024, the Cabinet Office Ordinance on Financial Instruments Transactions was revised, raising the upper limit for credit card investment trusts from ¥50,000 to ¥100,000 per month. This adjustment naturally corresponds to the increase in the limit for NISA&#8217;s accumulated investment framework, which started this year and is now set at ¥100,000. With this change, it&#8217;s expected that many individual investors will increase their NISA investment amounts.</span></p>
<p><span style="font-weight: 400;">Therefore, it&#8217;s worth reiterating the importance of paying attention to the details of credit card investment trusts offered by various online securities firms. Since the point redemption rates vary depending on the company or the credit card used for payment, it&#8217;s essential to consider these factors. Additionally, some firms offer holding points based on the amount of investment trusts held. Ideally, one would want to choose the online securities firm where points accumulate most efficiently.</span></p>
<h3><b>Purchase points for credit card investments and holding points. Let&#8217;s compare the redemption rates of five online securities firms using Orkan.</b></h3>
<p><span style="font-weight: 400;">First, I simply summarized the point redemption rate when using a credit card and accumulated points for each online securities company in a table. The accumulated points are set in detail for each investment trust, so it&#8217;s endless to compare them individually. Therefore, I used the granting rate when investing in the most popular NISA, &#8220;eMAXIS Slim Global Stocks (All Country)&#8221; (commonly known as &#8220;Orkan&#8221;).</span></p>
<figure id="attachment_364923" class="wp-caption alignnone" style="width: 1216px;" aria-describedby="caption-attachment-364923"><a href="#" data-ident_hash="de91de17"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2024/03/bb052652551396e066ed6dae5d7c509d-1.jpg" alt=""></a><figcaption id="caption-attachment-364923" class="wp-caption-text"><span style="font-weight: 400;">The point redemption rates of major online securities companies are adjusted from various angles to differentiate themselves from rivals or to avoid appearing inferior in service.</span></figcaption></figure>
<p><span style="font-weight: 400;">For example, in the case of SBI Securities, if you accumulate 100,000 yen each month, you can receive 500 points, which is 0.5% of the amount, at the time of accumulation. Additionally, 0.0175% of the average holding balance for one month after accumulation is separately granted as accumulated points&#8221; Since this 0.0175% is an annual rate, the monthly granting rate is approximately 0.0175% ÷ 12 months = 0.001458%.</span></p>
<p><span style="font-weight: 400;">Looking at this table, it may seem that Monex Securities is the most advantageous or SBI Securities is more beneficial than Rakuten Securities, but it&#8217;s not that simple. Each company adjusts its service content from various angles to differentiate itself from competitors or avoid appearing inferior. This makes it difficult to determine which company is the most advantageous. Next, let&#8217;s provide important supplementary information that cannot be fully explained in this simple table.</span></p>
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<div data-friday-nextpage-lead="Is Rakuten Securities more advantageous than SBI Securities?"></div>
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<h3><b>Actually, Rakuten Securities is more advantageous than SBI Securities?</b></h3>
<p><span style="font-weight: 400;">In the table, Rakuten Securities is shown with a blank for accumulated points, but this is because it does not offer accumulated points for the</span><b> &#8220;eMAXIS Slim Global Stocks&#8221;</b><span style="font-weight: 400;"> fund. However, accumulated points are granted for another All Country type investment trust, the </span><b>&#8220;Rakuten All Country Equity Index Fund.&#8221;</b></p>
<p><span style="font-weight: 400;">Both the</span><b> &#8220;eMAXIS Slim Global Stocks&#8221; </b><span style="font-weight: 400;">and the</span><b> &#8220;Rakuten All Country Equity Index Fund&#8221; </b><span style="font-weight: 400;">track the &#8220;MSCI All Country World Index (yen-denominated basis)&#8221; as their benchmark, and they are essentially the same product with different names. Rakuten Securities grants an annual rate of 0.017% as accumulated points for the Rakuten All Country Equity Index Fund.</span></p>
<p><span style="font-weight: 400;">With accumulated points at 0.017%, SBI Securities might seem more advantageous, but that&#8217;s not the case. The trust fee, which is the holding cost for the &#8220;Rakuten All Country Equity Index Fund,&#8221; is 0.0561% (inclusive of tax), lower than the 0.05775% for the eMAXIS Slim Global Stocks. Therefore, considering the real holding cost with accumulated points, Rakuten Securities stands at 0.0561% &#8211; 0.017% = 0.0391%, while SBI Securities stands at 0.05775% &#8211; 0.0175% = 0.04025%, giving Rakuten Securities the edge.</span></p>
<p><span style="font-weight: 400;">Well, this kind of micro-level difference might not be worth making a fuss about, but those who are using Rakuten Securities for credit card accumulation of the &#8220;eMAXIS Slim Global Stocks&#8221; should reconsider. Switching the accumulation target to the &#8220;Rakuten All Country Equity Index Fund&#8221; would allow them to receive accumulated points. Even if someone has been accumulating the &#8220;eMAXIS Slim Global Stocks&#8221; for years, changing to the other fund wouldn&#8217;t pose a problem since they have the same underlying assets, maintaining continuity in accumulation investments.</span></p>
<p><span style="font-weight: 400;">SBI Securities is currently under consideration regarding the timing of raising the credit card accumulation limit and the point granting rate after the limit increase. There might be changes in service content soon (currently, the redemption rate can go up to 5% depending on the card type, but the rate applied to accumulation amounts exceeding 50,000 yen might decrease). Additionally, since the eMAXIS Slim series aims for &#8220;the industry&#8217;s lowest operating costs,&#8221; it&#8217;s worth noting that there might be reductions in trust fees.</span></p>
<div data-friday-nextpage-lead="AU Kabu.com Securities] reverses [Monex, Inc."></div>
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<h3><b>Is AU Kabucom Securities poised to surpass Monex Securities?</b></h3>
<p><span style="font-weight: 400;">The second-tier group following SBI Securities and Rakuten Securities, dubbed the two leading companies, surpasses the top two in terms of point redemption rates. Particularly, Monex Securities stands out with the highest combined rate of redemption and accumulated points, but after the limit increase, AU Kabucom Securities has become advantageous.</span></p>
<p><span style="font-weight: 400;">This is because Monex Securities&#8217; 1.1% rate applies to accumulation amounts below 50,000 yen, decreases to 0.6% for amounts exceeding 50,000 yen up to 70,000 yen, and further decreases to 0.2% for amounts exceeding 70,000 yen up to 100,000 yen. AU Kabucom Securities applies a flat 1% rate up to 100,000 yen.</span></p>
<p><span style="font-weight: 400;">Taking these conditions into account, the points received from credit card accumulation are equivalent for Monex Securities and AU Kabucom Securities when the accumulation amount is 62,500 yen. Below 62,500 yen, Monex Securities is more advantageous, while above 62,500 yen, AU Kabucom Securities is more advantageous. It&#8217;s worth noting that both the Monex Card and AU PAY Card have an annual fee, but they become effectively fee-free with one usage per year, including credit card accumulation.</span></p>
<p><span style="font-weight: 400;">Additionally, PayPay Securities offers a redemption rate of 0.7%, but points are only applicable for accumulation amounts up to 50,000 yen. Compared to Monex Securities and AU Kabucom Securities, PayPay Securities falls short.</span></p>
<p><span style="font-weight: 400;"> </span></p>
<h3><b>The revenue of investment trusts from securities firms is typically one-third of the trust fee.</b></h3>
<p><span style="font-weight: 400;">Here&#8217;s a clarification regarding accumulated points. The fact that both SBI Securities and Monex Securities have the same granting rate of 0.0175% is not a coincidence. This is the limit for the &#8220;eMAXIS Slim Global Stocks&#8221; fund.</span></p>
<p><span style="font-weight: 400;">The trust fee of an investment trust is the cost borne by the holding balance and represents the fees investors pay to financial institutions as long as they hold the investment trust. On the other hand, it constitutes revenue for the financial institutions. For the &#8220;Orkan&#8221; fund, the trust fee is 0.0525% excluding taxes. This fee is divided equally among three financial institutions: the selling company (i.e., securities firm), the operating company, and the trustee company (i.e., trust bank) that holds the investors&#8217; funds. Therefore, the &#8220;share&#8221; of the securities firm amounts to 0.0525% ÷ 3 = 0.0175%.</span></p>
<p>In other words, <span class="strongInContent">SBI Securities and Monex, Inc. are giving away all of their earnings from Orcaans sales to investors as points for holding Orcaans</span>. (For more information on why they are still continuing the service, please refer to our previous article, <a href="https://friday.kodansha.co.jp/article/337154" target="_blank" rel="noopener">&#8220;Can DOCOMO, which was late to the game, turn things around&#8230; &#8216;New NISA&#8217; accounts wanted even if they are prepared to lose money</a>. (For more information on why DOCOMO is still continuing the service, please refer to our previous article, <a href="https://friday.kodansha.co.jp/article/337154" target="_blank" rel="noopener">&#8220;</a> Will DOCOMO be able to catch up?)</p>
<div data-friday-nextpage-lead="For more on docomo Monex Holdings, please refer to our previous article, Will DOCOMO be able to turn around?"></div>
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<h3><b>The revenue mechanism of Rakuten All Country.</b></h3>
<p><span style="font-weight: 400;">The situation is the same for Rakuten Securities. The trust fee for the Rakuten All Country Stock Index Fund is 0.051% excluding tax. When divided into thirds, it becomes 0.017%, matching the held points.</span></p>
<p><span style="font-weight: 400;">However, in the case of Rakuten All Country, since the operating company is Rakuten Investment Advisory, it is possible for the Rakuten Group to record profits. Conversely, because Rakuten Investment Advisory takes a share, it could be said that it achieved a trust fee lower than &#8220;eMAXIS Slim Global Stocks,&#8221; although &#8220;Rakuten All Country Stock Index Fund&#8221; is sold only by Rakuten Securities.</span></p>
<p><span style="font-weight: 400;"> </span></p>
<h3><b>What is the trend of Docomo Monex Holdings, which is still in a silent position?</b></h3>
<p><span style="font-weight: 400;">As of January 2024, it&#8217;s difficult to say that there has been a synergistic effect between NTT Docomo and Monex Securities since the establishment of Docomo Money Holdings. Announcements such as the start of credit card accumulation via d Card around this summer and the granting of points with d Points by the end of the year have been made, and there is a possibility that specific details such as the implementation timing and redemption rate will be announced as early as the financial results announcement in May.</span></p>
<p><span style="font-weight: 400;">However, the intention is to make the services with d Card on par with Monex Card, so extravagant point rewards are unlikely to be expected. Probably, it won&#8217;t be a strategy to appeal with a new tariff plan like the au Money Activity Plan that au is currently offering.</span></p>
<p><span style="font-weight: 400;">By subscribing to the au Money Activity Plan, the redemption rate for credit card accumulation is raised to 1.5% for au PAY card and 2% (3% only for the first year) for au PAY Gold card. Since its launch in September 2023, it has been well received, and the number of subscribers to au PAY Gold card is steadily increasing. It has become clear that there is a significant demand from users for plans that bundle communication services and financial services, especially with the recent boom in NISA.</span></p>
<p><span style="font-weight: 400;">As mentioned earlier, the source of points that can be returned to investors is limited. Docomo will find it difficult to set a redemption rate exceeding 1% unless it creates a new plan and recovers some of the costs from the plan itself.</span></p>
<p><span style="font-weight: 400;">Monex Securities is currently running a campaign offering a redemption rate of 2.2% for credit card accumulation for new NISA account openings (until the end of September 2024. The redemption rate for accumulation exceeding ¥50,000 is undecided). It&#8217;s quite a generous campaign, but there&#8217;s no doubt that the expectations of investors have risen. It remains to be seen what services Docomo will introduce this summer. Depending on the content, it could affect other companies as well. Au Kabucom Securities, which is in a rival relationship, is also holding a margin for growth with held points, so there may be movement in this area as well.</span></p>


 After working as a money writer and financial planner/market analyst for a securities company, he became independent in 1996. Writes articles on finance and asset management mainly for business and economic magazines. Author of "A Textbook for the First Year of Robo-Advisor Investing" and "Understanding with Rich Illustrations! Cashless Payments for the Absolute Benefit of Cashless Payments".

 Kenji Matsuoka

 Following the revision of the law in March, major online securities companies have successively raised the limit amount of "credit card savings". However, the point redemption rate differs from one brokerage to another, and the difference is not small. Which online securities company offers the best deal?

NISA Credit Card Accumulation vs. Orkan – A Comparison of Point Redemption Rates Reveals the Most Cost-Effective Online Securities Firm

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