With the introduction in January of tax-free, individual investment accounts — aimed at enticing more investments by the younger generation — banks and brokerages will need to redouble their efforts to ensure that potential investors fully understand the risks and mechanisms of stocks and other financial products, instead of just campaigning to get more investors on board.
The Nippon Individual Savings Accounts (NISA) will be modeled after the Individual Savings Accounts in Britain, which is believed to have succeeded in helping boost long-term investments by individuals in the country. NISA is being introduced here just as current tax benefits on securities investments expire at yearend.
Anybody living in Japan and who is at least 20 years old may open a special account at a brokerage or bank that deals in stocks and investment trusts. For investments through the account of up to ¥1 million a year, capital gains and dividends will be tax-exempt for five years after the special account is set up.