Daiwa Securities Group Inc. hosts a seminar to discuss the expansion of the Nippon Individual Savings Account (NISA) investment program. The expansion, which will take effect in January, will increase the maximum tax-free investment amount and remove the limit on the duration of tax-exempt accounts. This move is expected to encourage asset accumulation by investors and is a key part of Prime Minister Fumio Kishida’s plan to double asset income.
One of the significant changes in the new program is the indefinite tax exemption, allowing investors to make long-term, installment saving-type, and diversified investments to build their assets. Daiwa Securities Group Inc. has been hosting seminars to educate the public about the new program, and it has been met with high public interest, with over 1,000 participants attending both in-person and online events. Currently, the NISA program, introduced in 2014, allows for tax exemptions on investment gains within certain limits. The new program will automatically open an account for each person under the current system in January, and it will also enable investors to choose a different financial institution for the new account.
Under the new program, investors will have the option to use both the Growth Quota, which corresponds to the current General NISA, and the Tsumitate Quota, which is the counterpart of the Tsumitate NISA. Additionally, there will be no limit on the tax exemption period, and the annual maximum for tax-exempt investment amounts will be doubled to ¥2.4 million for the Growth Quota and tripled to ¥1.2 million for the Tsumitate Quota. The total combined maximum on lifetime investment amounts for the two quotas will be ¥18 million. The government hopes that the new program will encourage individuals to shift their financial assets from savings to investments, promoting economic growth in the process.
However, the NISA program is not without its risks, and investors should be aware of the potential for losses if the selling price falls below the investment amount. To mitigate these risks and promote financial education, the government will establish an authorized corporation for promoting economic education next spring.
As the new NISA program takes effect, it is crucial for individuals to understand the basics of investment and recognize the potential long-term benefits of investing their surplus funds. By doing so, the government aims to create a more robust investment culture in Japan, fostering economic growth and stability.
