New Account Management Law Expands Bank Account Linkage from April What You Need to Know

What has changed? Why again this year?

Starting from April 1, 2025, the system for linking My Number to bank account savings and deposits, known as the “Deposit and Savings Account Numbering System,” has been expanded.

The Digital Agency’s website has posted the latest information regarding the “Account Management Law.”

By submitting your My Number to a financial institution, you can link your My Number to your bank account through the “Deposit and Savings Account Numbering System.” The law governing this system is the “Account Management Law,” officially titled “Law on the Management of Deposit and Savings Accounts Based on the Use of Personal Numbers by the Account Holder’s Will,” which was enacted on April 1 of the previous year.

So, what has changed from April this year regarding the assignment of My Numbers to savings accounts? And what is the purpose of the “Account Management Law”? To gain insight into the design of the My Number system, we asked Toshihiro Enami, the Senior Researcher at the Administrative System Research Institute and an expert in the field.

“The plan to assign My Numbers to savings accounts was originally decided in the 2015 revision of the My Number Law. However, it was only from the enforcement of the revised law in 2018 that the linking of savings accounts and My Numbers began.

At that time, most financial institutions limited the assignment of My Numbers to new accounts. This meant that for depositors who wanted to link My Numbers to all of their accounts, they had to visit each bank individually and request it.

In response, the government incorporated the ‘Account Management Law’ as part of the digital reform-related laws in 2021, allowing depositors to submit their requests at one bank and, through the Deposit Insurance Corporation, have the My Number linked to accounts at multiple financial institutions.

This was the process up until the enforcement of the Account Management Law on April 1 of the previous year.”

The Account Management Law mandates that when opening a new savings account, financial institutions must confirm whether the depositor wishes to link their My Number to the account. Additionally, financial institutions are required to confirm the depositor’s desire to link their My Number to accounts held at other financial institutions, and if the depositor agrees, the financial institutions will notify the Deposit Insurance Corporation, which will then notify the other institutions.

However, the decision to link a My Number to an account is ultimately up to the depositor’s will.

“From April 2024, when opening a savings account, the depositor must confirm whether they wish to link their My Number to the account. Now, from April of this year, My Numbers can be linked to accounts at multiple financial institutions through the Deposit Insurance Corporation.”

One issue with the Account Management Law is that the government’s information dissemination has been minimal. Even when looking into the Digital Agency’s public documents, the specific methods used by financial institutions to confirm depositors’ intentions are unclear. Furthermore, although the system now allows for linking My Numbers to multiple accounts at once, it does not seem like the government is actively promoting this change.

And why was there a delay in the implementation? Was there an intention behind it?

“It was intentional. I think there are political motives involved. The concept of the numbering system has a long history, and politicians are well aware that citizens are opposed to being managed by numbers. If the government were to push for the immediate linking of savings accounts with My Numbers, it would provoke strong public backlash. So, they have taken a gradual approach, expanding the scope of My Number assignments incrementally while trying to avoid drawing too much attention from the public. I think the strategy is to quietly build the framework step by step.”

The goal is mandatory implementation. The ultimate objective is to break through the 100 million yen barrier

On the other hand, the Digital Agency highlights the benefits of the Account Management Law for citizens, such as simplifying account verification and procedures during inheritance or disasters.

“When inheritance procedures are needed, you can check all the banks where your parents’ accounts are held at once. In case of a disaster, if you can verify the account information with your My Number, you can withdraw cash. The government states that the Account Management Law primarily has two benefits.”

However, the true purpose of the Account Management Law is different.

“The main goals, as outlined during the revision of the My Number Law, were to enable pay-off responses by the Deposit Insurance Corporation in the event of a financial institution’s failure, and to enable more efficient use of financial institution information in social security and tax audits.”

Regarding the latter, when administrative agencies conduct tax audits, they often request deposit information from financial institutions, but many of these agencies and financial institutions still handle this process on paper.

The government aims to promote the online processing of deposit inquiries. To confirm that an account truly belongs to an individual, it was necessary to link the account with the My Number.

Did the government require financial institutions to confirm the depositors’ intentions regarding the linking? While the decision to link is voluntary, could it become mandatory in the future?

“Once linking becomes widespread, it will likely be made mandatory. Ultimately, I expect the government to break down the ‘100 million yen barrier’ and shift towards comprehensive taxation of financial income.”

Japan’s income tax system employs a progressive tax rate, which increases with income, but beyond 100 million yen, the tax rate drops, creating a “100 million yen barrier.” What does it mean to break this barrier?

“People earning 100 million yen in salary are rare. Even CEOs of large companies typically earn a few tens of millions of yen. These high-income individuals generally earn through financial income.

Yet, once annual income exceeds 100 million yen, the tax rate decreases significantly. This is clearly problematic.

The reason for the separation of financial income tax is that it’s difficult to consolidate deposits for people with multiple accounts, making it impossible to apply progressive tax rates. By making linking mandatory, account consolidation becomes possible, allowing for comprehensive taxation of financial income with progressive tax rates.

The government’s goal is likely to correct the unfairness in tax burdens by raising taxes on financial income and ensuring fair tax revenue from the wealthy. Honestly, I think the Account Management Law was created to lay the groundwork for this in the future.”

Although there seems to be significant resistance among the public to mandatory implementation.

“I believe we should make linking My Number with deposit accounts mandatory. Once My Number is linked to deposit accounts, it becomes technically possible to consolidate information. This would allow for progressive taxation of financial income. As a result, the tax burden on the middle class would be reduced,” says Mr. Enami.

He points out that the middle class in Japan is increasingly exhausted.

“Looking at the financial asset ownership data for Japanese people released by Nomura Research Institute in February this year, we can see that both wealthy individuals with assets exceeding 100 million yen and ultra-wealthy individuals with assets exceeding 500 million yen are on the rise, while the middle class with assets below 30 million yen is also growing. In other words, the gap between the upper and lower classes is widening, and the middle class is increasingly exhausted.

The middle class supports the country. As the wealth gap widens and economic inequality within the middle class grows, social unrest increases. Politicians need to seriously think about how to address the situation where inequality continues to grow year after year.”

Will linking deposit accounts with My Number eventually lead to a reduction in the tax burden on the middle class? It may be worth considering whether to opt in.

▼Toshihiro Enami (Enami Toshihiro)

Advisor at Administrative Systems Research Institute, Chief Researcher at Tateshina Information. He joined Fujitsu in 1981 and worked on developing municipal systems such as the Basic Resident Register. Since 1995, he has been researching topics like e-government, e-municipality, and My Number at Fujitsu Research Institute. His publications include “Digital Procedures Law and Changes in Corporate Practice” (Nihon Horei) and “The Curse of My Number” (Aoyama Life Publishing), among others.