Introduction: Government bonds are not necessarily the only right answer!
In the previous article, I explained how the interest rates on individual government bonds will change in the future and when the next best time to buy is.
With interest rates expected to rise, some of you may be thinking, “It’s about time I bought some individual government bonds.”
However, there is one thing I would like you to consider here.
That is, are individual government bonds really the only good deal?
In fact, there are also bank time deposit products that offer quite attractive interest rates.
I would especially like to draw your attention to short-term time deposits, such as those for six months or one year.
Depending on the bank, by taking advantage of campaigns for new account holders, you may be able to receive an interest rate that rivals that of individual government bonds.
Moreover, because they reach maturity in a short period, they have the advantage of allowing you to consider where to deposit your money next while watching future interest rate trends.
In other words, while government bonds are a strong option if you are depositing money for a long period, bank time deposits may be more convenient and potentially more advantageous for short-term management of six months to a year.
Therefore, in this article, for those of you who already understand the interest rate trends of individual government bonds, I will compare which is better when actually depositing your money.
I will explain this in an easy-to-understand way for the senior generation, including not only interest rates but also safety and ease of use of the money.
Chapter 1: Actually, bank time deposits are quite attractive for short periods!
First, I want you to know that you do not necessarily have to deposit money for a long period, such as three or five years, with time deposits.
Depending on the bank, relatively high interest rates are set even for short periods, such as six months or one year.
For example, let’s look at the “Power Direct Yen Time Deposit” from SBI Shinsei Bank.
As of November 8, 2026, the interest rate for the standard stage is 1.20% per annum for a 6-month term and 1.40% per annum for a 1-year term.
For a 5-year term, it is 1.95% per annum.
In this way, you can expect a certain level of interest even with short-term products.
What is also worth noting is that some banks offer preferential interest rates for new account holders.
For example, au Jibun Bank offers a 1-year time deposit with an annual interest rate of 1.90% for those who meet the requirements for their “Debut Support Time Deposit” for new account holders.
However, since this requires conditions such as opening a new account, it is not available to everyone.
If you can make good use of such campaigns, you may be able to deposit your money under quite favorable conditions even for a short period.
Here, there is something I would like the senior generation to consider.
For example, if someone who expects interest rates to rise in the future locks their money away for 5 years right now, they will not be able to take advantage of new interest rates immediately even if bank time deposit rates rise later.
On the other hand, with a 6-month or 1-year time deposit, you can check the interest rates at that time and re-deposit your money when it reaches maturity.
Of course, there is no guarantee that interest rates will rise in the future.
Conversely, there is also a possibility that they may fall.
However, for those who want to respond flexibly while watching future interest rate trends, short-term time deposits are also well worth considering.
Chapter 2: Why SBI Shinsei Bank is introduced as a representative example this time
When you hear “high-interest time deposit,” you might wonder which bank to choose.
In fact, SBI Shinsei Bank is not the only bank with high time deposit interest rates.
Various banks such as Aozora Bank, au Jibun Bank, Orix Bank, SBJ Bank, and Sony Bank offer attractive time deposits.
So, why are we featuring SBI Shinsei Bank this time?
The reason is that it is one of the representative online banks, offers products with a relatively wide range of deposit periods, and makes it easy to compare interest rates from short-term to long-term.
We are introducing it here strictly as a representative example.
When actually making a deposit, please check the interest rates of other banks as well.
In particular, the interest rate difference for 6-month and 1-year products can be significant depending on the bank.
It is important to compare them, including whether or not there are campaigns.
Chapter 3: What is the difference between individual government bonds and time deposits?
Here, let’s reorganize the differences between the two.
First, a time deposit is a product where you deposit money into a bank and receive interest after a set period has passed.
The deposited principal is guaranteed in principle, and general yen time deposits are covered by the deposit insurance system.
In the unlikely event that a bank fails, up to 10 million yen in principal per depositor per financial institution, plus interest up to the date of failure, is protected.
On the other hand, individual government bonds are products where you receive interest by lending money to the Japanese government.
This also has a mechanism where the government pays the principal and interest, making it a highly safe financial product based on the government’s creditworthiness.
However, unlike time deposits, it is not covered by the deposit insurance system.
There are three types of individual government bonds: 10-year floating, 5-year fixed, and 3-year fixed.
In particular, the 5-year fixed bond is a product where the interest rate set at the time of purchase continues for 5 years, making it easy to understand the interest you will receive in the future.
Also, individual government bonds can generally be redeemed early after one year has passed since issuance. However, an amount equivalent to the interest for the two most recent periods will be deducted.
In other words, while both are products suitable for those who prioritize safety, they have their pros and cons depending on how you use your money and the period for which you deposit it.
Chapter 4: Comparing Interest Rates! Government Bonds for the Long Term, Banks are Also Strong Contenders for the Short Term
Now, let’s compare the actual interest rates.
The interest rates for SBI Shinsei Bank as of November 11, 2026, are as follows.
The 6-month term is 1.20% per annum, the 1-year term is 1.40% per annum, the 3-year term is 1.56% per annum, and the 5-year term is 1.95% per annum.
On the other hand, for the November offering of individual government bonds, the 3-year fixed is 1.94% per annum, and the 5-year fixed is 2.17% per annum.
*All are annual rates before tax. Bank interest rates are as of November 8, 2026, and government bond interest rates are the conditions for the November 2026 offering.
What is important here is to compare them by matching the deposit periods.
For example, if you want to invest for a short term of about six months to a year, bank time deposits have short-term products and campaigns for new account holders.
For individual government bonds, even the 3-year fixed bond has a maturity of 3 years. In principle, they cannot be redeemed early until one year has passed since issuance.
Therefore, for those who may need to use their money in six months or a year, short-term time deposits may be easier to use.
Also, depending on the bank, there are cases where promotional interest rates exceed those of government bonds.
On the other hand, if you have money you do not plan to use for five years, the 5-year fixed-rate individual government bond is also attractive.
The November offering is at 2.17% per annum, which exceeds the 1.95% per annum of SBI Shinsei Bank’s 5-year time deposit.
In short, what is important in this comparison is not simply which interest rate is higher.
It is about considering how many years you can leave your money untouched, and which option is more advantageous for that period.
Chapter 5: How much interest will you earn if you deposit 1 million yen?
Here, let’s consider the case of actually depositing 1 million yen.
First, let’s look at SBI Shinsei Bank’s 6-month time deposit.
At an annual rate of 1.20%, if you deposit 1 million yen for six months, the pre-tax interest is 6,000 yen.
After deducting taxes, the net amount will be approximately 4,782 yen.
Next, let’s look at the 1-year term.
If you deposit 1 million yen for one year at an annual rate of 1.40%, the pre-tax interest is 14,000 yen.
After taxes, it will be approximately 11,155 yen.
In this way, you can receive interest even over a short period.
Of course, there is no guarantee that 6-month or 1-year time deposits can be renewed at the same interest rate after they mature.
If interest rates rise at the time of maturity, it could be advantageous, but conversely, if interest rates fall, the terms for the next deposit could worsen.
On the other hand, for 5-year fixed-rate individual government bonds, the interest rate set at the time of purchase continues for five years.
If you purchase 1 million yen at the current 2.17% per annum, the annual after-tax interest is approximately 17,291 yen.
However, this is a product based on the premise of a 5-year investment.
You cannot simply compare a six-month or one-year time deposit with a five-year government bond to decide which is more profitable.
Are you prioritizing ease of use in the short term, or are you prioritizing locking in an interest rate for a long period?
Thinking about this is important.
Chapter 6: What I recommend for the senior generation is to use short-term and long-term options separately
So, how should people aged 60 and over deposit their money?
What I recommend is not to concentrate all your money in one product, but to divide it according to when you plan to use it.
1. Money that might be used within six months to one year
For this kind of money, you should focus on short-term time deposits or regular savings accounts.
For example, this includes home repair costs, car replacement costs, medical expenses, and nursing care expenses.
If you put this money into a five-year government bond, it could become inconvenient depending on when you need it.
With a short-term time deposit, you can receive the money after maturity and choose the next place to deposit it as needed.
2. Money that you do not plan to use for about one to three years
In this case, there is also a method of dividing bank time deposits into multiple terms.
For example, if you combine a six-month term and a one-year term, the maturity dates will be staggered.
You can decide whether to redeposit the money while checking the interest rates at that time.
However, since the interest rate may drop if you cancel midway, make sure to deposit an amount that you can leave until maturity.
3. Money that you do not plan to use for five years or more
If it is funds that you do not plan to use for a while, the 5-year fixed-rate government bond for individuals is also a strong option.
This is because the interest rate is determined at the time of purchase and continues until maturity, making it easier to forecast interest earnings.
Also, if you are hoping for future interest rate hikes, there is the option of a 10-year variable-rate bond.
Since the interest rate is reviewed every six months, there is a possibility that the interest received will increase if market interest rates rise.
However, if interest rates fall, the interest received may also decrease.
The important thing is to invest surplus funds only after securing necessary living expenses and money for sudden expenditures.
Chapter 7: Points to Note When Choosing High-Interest Time Deposits
Finally, here are three points to check when choosing a time deposit.
Point 1: Campaign interest rates have conditions
Some banks have conditions such as being limited to new account holders or limited to newly deposited funds.
There may also be restrictions on the amount and duration of the deposit.
Do not decide based solely on the high interest rate shown in advertisements; always check the product description.
Point 2: Early withdrawal reduces interest
Time deposits are set with interest rates based on the premise that they will be held until maturity.
If you withdraw early, an early withdrawal interest rate lower than the initial rate may be applied.
If there is a possibility that you may need money suddenly, avoid putting your living expenses into time deposits.
Point 3: Check the limits of the deposit insurance system
General yen time deposits are covered by the deposit insurance system, which protects up to 10 million yen in principal per depositor per financial institution, plus interest up to the date of failure.
Even if you deposit in multiple branches, they are generally aggregated if they are at the same financial institution.
If you are depositing a large amount, consider splitting it across multiple financial institutions.
Summary: Time deposits for the short term, government bonds are also a strong option for the long term!
In this article, we compared high-interest time deposits and individual government bonds.
There are three points to remember from this article.
First, for short-term investments of about six months to a year, bank time deposits may be more advantageous.
In particular, if you can take advantage of campaigns for new account holders, you may be able to deposit at an attractive interest rate.
Next, for money that you do not plan to use for a long period, such as five years, individual government bonds are also a strong option.
Since you can lock in the interest rate at the time of purchase, there is the benefit of being able to easily understand future interest earnings.
And finally, do not concentrate your retirement funds into a single product.
In pension life, there are times when you may suddenly need a lump sum of money.
It would be a problem if you chased only high interest rates and then found yourself unable to use your money when you needed it, wouldn’t it?
Secure money that you might use in the short term in bank deposits, and compare money that you do not plan to use for a long time, including individual government bonds.
This kind of proper allocation is important.
If you understood when to buy individual government bonds from the previous article, please take a look at bank time deposits this time as well.
Even with the same 1 million yen, the interest you can receive changes depending on the bank and the period you deposit it for.
Because it is precious retirement money, do not rush; take your time to compare and choose the deposit destination that suits you best.
At the “Money Classroom for Those Over 60,” we will continue to deliver useful financial information to the senior generation as simply and clearly as possible.