NISA for my 16 years old son

[Oliver]

I want to start a Junior NISA for my 16 years old son.
Can I use SBI like I do for myself?
Is it difficult to transfer money into his account?
Any tips and advice from others who have done it?

[RetireJapan]

You can do this but you should hurry. Junior NISA ends at the end of 2023 and new accounts can only be opened this year (aim to complete application by September or so to be safe).

Easiest way to fund is to put cash (up to 800,000 yen) into the child's account and transfer the money from there to Jr NISA account.

SBI has Jr NISA accounts: https://site1.sbisec.co.jp/ETGate/WPLET ... YcQAvD_BwE

[Oliver]

I have a few questions.
What will happen in two years with my sons Junior NISA? Will I have to remake it or will it automatically become his?
Also how can I fund it? Can I fund it from my NEO bank account that I fund my personal SBI NISA account?

[Tkydon]

The money becomes his as soon as you pay the money into his NISA.

This is the last year of Junior NISA,

You would not be able to do anything next year, when he is 17, but you would be able to fund an adult NISA for him in 2025 when he is 18.
See the information on New NISA...

[Oliver]

I have a question. I am doing Tsumitate NISA can my 16 year old son do Tsumitate NISA?

[Tkydon]

He can only do Junior NISA this year, as it is the last year of the program.

He can only do Tsumitate NISA over the age of 18, so you would have to wait until 2025.

2024, you would have to take a break.

However, he can receive up to Y1.1M in Tax Free Gifts every year, so if you transferred money to his account under Y1.1M in 2023, under Y1.1M in 2024, and under Y1.1M in 2025, he can hit the ground running and put upto Y1.2M in 2025 into Tsumitate NISA, and the other Y1.1M from 2023, and Y1M from 2024 into Regular NISA up to Y2.4M. Total Y3.6M in the first year...

[Oliver]

Thanks to everyone help. I was able to get my son's Junior NISA set up and have transferred money into his account.
I have a question. Should I have the money automatically monthly invested so that I can have the averaging affect? If yes, how much time will his account be open to me for me to invest?

[adamu]

Should I have the money automatically monthly invested so that I can have the averaging affect? If yes, how much time will his account be open to me for me to invest?

This comes up a lot. The odds favour investing it all at once, but it's not guaranteed and requires the discipline not to sell anything if there's a downturn. However in your case since he has a very long future and ability to ride out any dips, investing it as a lump sum seems sensible, as long as you are not going to tinker later.

[Oliver]

Thank you for you speedy reply!
I have another question:
I have 800,000 yen saved for my son’s first year on university. Should I put it in Junior NISA? My son is 16 years old and the money has two years to grow.

It seems like a simple question. But I worry that it will be difficult to get the money out on time to pay for the university tuition fee.

Second question: Does anyone have any experience with taking out a Junior NISA money to pay for university?

[Tkydon]

Thank you for you speedy reply!
I have another question:
I have 800,000 yen saved for my son’s first year on university. Should I put it in Junior NISA? My son is 16 years old and the money has two years to grow.

It seems like a simple question. But I worry that it will be difficult to get the money out on time to pay for the university tuition fee.

Second question: Does anyone have any experience with taking out a Junior NISA money to pay for university?

The maximum you can put in to the Junior NISA in any one year is Y800,000, and this is the last year of the program, so you would need to get the account set up fairly quickly, and the funds transferred in by December.

When you need the funds, you can sell the investments, and take the funds out completely tax free.

There would be a gap next year, when you would not be able to fund a NISA, but you could save and invest in a regular account or a Tokutei Account for the year.

When your child is 18, you can roll the funds into a New NISA. You can input upto Y2.4M to the New NISA and Y1.2M (Y100,000 per month) to the New Tsumitate NISA, and again, when you need the funds, you can sell down investments, and take the funds out completely tax free.