An Expat’s Guide to Japanese banks - choosing the right bank, opening an account and sending money overseas

Choosing a Japanese bank can be daunting for foreigners who have just arrived in Japan. As one would expect, there are many retail banks to choose from. I’ve picked out three options with particular advantages for you to consider. Also, I’ve included information about a potentially tricky task that is essential for most foreigners living here: transferring money back home from Japan.

UFJ Bank – The Default Choice for Foreigners

In 2006 the Bank of Tokyo-Mitsubishi and UFJ Bank merged to form The Bank of Tokyo-Mitsubishi UFJ, Ltd, usually shortened to “UFJ.”　Measured by assets it is the second largest bank in the world, which is easy to believe given the number of branches and ATMs you can see dotted all over Japan’s towns and cities. Its main advantage is convenience; you are never far from your money if you bank with UFJ. If you can get to a UFJ ATM within working hours, which finish at 3pm, then you’ll be spared the 105 yen fee for making a withdrawal. Otherwise, you’ll find yourself having to use UFJ’s outside of hours or going to convenience store machines, both of which will incur a charge. Using another bank, simply because of the relative scarcity of their ATMs, makes it more likely you’ll be paying to get to your money. Also, since it’s the default banking option for most Japanese, your landlord or letting agent is also likely to use it, which means you’ll have to pay a lower fee to make payments.

There are downsides to UFJ, however. There is no English online banking available and the English available in UFJ ATMs only covers the simplest of transactions. Third party payments (e.g. for rent or sending money to your Go Lloyds account for an overseas transfer) have to be conducted in Japanese. Your Kanji will need to be very high level, or your letting agent will need to provide instructions, if you are to successfully negotiate this. If you are planning to send large amounts of money, wondering whether you’re pressing the right buttons as the queue behind you for the ATM mounts up really can raise the blood pressure!

Applications for UFJ bank accounts are in Japanese only. If you head to a large branch, there’s a good chance you’ll find someone who speaks English, but you can never count on it. You’ll need your Alien Registration Card (or “Gaijin Card” to its friends) when you apply.

Shinsei Bank – An Excellent Choice for Expats

Shinsei Bank is far smaller but geared very well to foreigners. Even in major cities like Osaka, there are only a few branches. There are ATMs in convenience stores on practically every corner so you’ll have no problem accessing your money with Shinsei, but will have to pay around 100 - 150 yen a time.

The first advantage of Shinsei is that you can apply through the mail completely in English, and they have an English customer service helpline to guide you through. The application process is extremely straightforward. You fill in an online form on the Shinsei website, and then complete a paper application that you must return along with two photocopies: a recent bill and your Gaijin Card.

You can then register for their English online banking service, which, again is easy to use and very foreigner friendly. Depending on the amount you hold in your account you will qualify for a certain number of free transfers. Otherwise a transfer will cost 300 yen. You will be able to pay your rent, pay for products and services through money transfers and also send money to your Go Lloyds account – all in English!

If you’re not online at home there are plenty of Internet cafes dotted all over Japan, and there are even PCs ready for customer use in Shinsei branches for this purpose. Likewise, there are customer telephones so you should always be able to speak to someone in English when you enter a branch, either in person or on the phone.

Citibank – The Truly Global Choice

As a U.S.-based global bank, Citibank offers a similar service to Shinsei and similar procedures for joining up, including an English language phone application option. Their branches and ATMs are equally sparse. Citibank, as part of Citigroup – one of the world’s largest companies, was rescued by a government bailout in 2008 after suffering huge losses. In 2009 Citibank Japan was subject to administrative action by the Financial Services Agency for compliance and governance reasons. They have to suspend “sales activities (including advertising, sales campaigns and solicitation) of all products that are handled by its Retail Banking Division from July 15 to August 14” in accordance with this action. As to whether any of this should impact your decision to choose a bank, I have no idea.

What might make a difference is that Citibank customers are charged 2,100 yen per month for their account, unless the amount you hold with them reaches their “total average monthly relationship balance” minimum requirement, which is calculated by a formula. There are no monthly fees for standard UFJ or Shinsei accounts.

Sending Money from Japan to Overseas

The quickest, best value and easiest way to transfer money overseas is to use Go Lloyds, an electronic wiring system. It costs 2000 yen per transfer but for reasonable amounts of money this is easily compensated for by their excellent exchange rates. Essentially, you make a domestic transfer to your Japanese Go Lloyds account and then Go Lloyds sends the money to your home country. You have to apply in advance to register recipients. Once you’ve done this, you can send money to your own home account or to anyone else’s. The receiving bank will also charge for processing the transfer, taking this out of the transferred amount. If you bank with Shinsei or Citibank and are banking online, you can do the transfer completely in English, and from the comfort of your own home. It’s easily the best way to transfer money overseas from Japan.

In conclusion, UFJ has its advantages – primarily its ubiquitous branches and ATMs, but Shinsei has the considerable benefits of zero monthly fees plus English online banking to help you keep track of your money. While you may have to shell out for withdrawals from convenience store ATMs, the relative safety of Japan means it generally is OK to take out relatively large amounts at a time. Therefore, you shouldn’t need to be paying fees every other day. Also, the UFJ opening hours are so short that you’ll find yourself paying the out-of-hours fee much of the time anyway. Combining a bank which provides an online English service with Go Lloyds is by far the simplest and most stress-fee of remitting money, unless of course your Japanese is top-notch.