Net Bank Update: JRE Bank＆Sumishin SBI NEOBANK

 The term "Net bank" has always seemed silly to me, as internet banks still have employees and presumably offices, and "normal banks" still have internet banking these days - so it's a relatively pointless line in the sand.  Money is mostly virtual anyway.  

That said, many so-called Net Banks don't have any branches that customers can visit.  Even Sony Bank closed their branch office due to Covid.  Since Mega-Banks have to pay rent for lots of huge offices, they tend to charge higher interest rates for loans, pay [even] lower interest rates for deposits, and charge more fees.

To stop from bleeding customers, some of the Mega-banks have started their own net banks.  For example, Mitsubishi launched Jibun Bank in a joint venture with au.  

Some people, especially the older generations, feel "safety" and "trust" with the famous mega-banks like Mizuho and Mitsubishi - but given that all accounts are insured with the government, there is no real safety advantage to having an account with one of these banks over a small regional bank or net bank.    

A more recent development is that some banks are offering their banking infrastructure and certifications for rent to other clients in much the same way that major mobile phone carriers offer their infrastructure for resale to others carriers.  

There were already a lot of companies participating in this, but most did not offer any special advantage, except if you bought a lot of stuff at a certain store.  For example, much as there is a Bic Camera Credit card, there is a "Takashimaya Bank", where it is just Shinsei SBI Neobank re-branded to Takashimaya bank.  Takashimaya is just a department store, so they don't actually have approval from regulators to create an actual bank, nor do they have the infrastructure, etc. - but they can outsource Sumishin SBI to offer a branded banking service and presumably all parties involved benefit.  (Note that the English word "Bank" has no legal meaning in Japan, so they can call themselves a "Bank" all they want, and it's just fashion).  

 Department stores aren't interesting to me - but you know what is?  Japan Rail.  Why?  Well everyone takes the train.  View Card is one of the best credit cards in Japan because the points you earn are JRE points, which can be used to charge Mobile Suica - rendering them effectively the same as cash.  No limited catalogs full of stuff you don't want that is super overpriced, no discounts on services you'll never use - none of that - just points you can spend as money anywhere.  

But what if you want to use a debit card instead of credit card?  Well Japan Rail East thought it was time to come up with a solution to this, and thus "JRE Bank" was born.  

It's a service offered by Rakuten bank, but it's separate enough that you can sidestep the usual "one account per person" restriction and set up an account with JRE bank even if you already have a Rakuten account.  

The main advantage over a normal Rakuten account is that you can earn JRE points by using your debit card, and depending on various conditions, such as setting your payroll to be deposited in your JRE Bank account, setting your View Card to deduct from there, etc., you can earn enormous discounts on train tickets.  

So, it's good for anyone who might want to take the train... which is basically everyone.   This has taken the Japanese internet by storm, but.. yeah okay so you get points and cheap train tickets.  This is great, but not even the best part to me.

See, I've had a longstanding problem:

1. I shop (and drink) at some places that only take cash.

2. I don't want to carry a lot of cash.  I want to set spending limits.

3. Because of the above, I need to go to the ATM often.

4. Most mega-banks offer free ATM service, but their ATMs have very limited operating hours, or are not so many in number.  (For example, SMBC Prestia ATMs operate nearly 24/7 and are always free to use, but they only have 14 ATMs in Tokyo).  Mitsubishi has more ATMs, and some of them are open late, but they charge 110 JPY after 9pm!

5. Most internet banks let you use Conbini ATMs for free (since they don't have their own ATMs), but only a few times per month.  After that, you have to pay.  

I like Rakuten, because it is the only bank I know of that lets you set a daily limit of less than 10,000 JPY on withdrawals, and it also lets you set times and locations where withdrawals can/can't be made.  

As an example, I can set the following:

a. Only up to 8000 JPY per day.

b. Only between 9am to 2am

c. Only in Tokyo or Kanagawa

This is a pretty good system to stop any kind of fraud or misuse, and also for even for threats and self control.  

But... if you are limiting yourself to less than 10,000 JPY then you will need to use the ATM more often.  This is exactly what I want - but I don't want to pay all the fees!  

If only there was a bank that let you set up such limits, but also had ubiquitous ATMs in many locations that were free to use for long hours.  

Enter JR bank.  Since it's based on Rakuten Bank's systems, JRE Bank allows the same sort of fine tuned security settings.  It also has a key difference from normal Rankuten bank accounts - unlimited use of View Altte ATMs.  Given that basically every JR station has a View Altte ATM, you can use the ATM for free most places you go shopping.  Sure, if you live near a subway station, there may not be a JR station nearby, but you will probably pass one on the way to work or shopping.  If not, you can also use Conbini ATMs for free a few times of month.  (Up to 7 times if you keep a massive amount of money with them).  

JR stations are also typically open long hours, typically closing after midnight and opening by 5am.  What's more, the ATMs are sometimes located on the outside of the station - in which case you can use them even when the station is closed.  W

In case there is no View Altte ATM and you use a Conbini ATM it will cost 220 JPY if you don't have any more free withdrawals left for the month, regardless of the time of day.  Not the cheapest or the most expensive.  

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The other strong contender for ATM use is Sumishin SBI Neobank.  Just by setting up an account and linking it with your mobile phone, you can use the ATM for free 5 times per month.  

The first thing to know about Sumishin SBI is that being basically a net bank, they don't really have their own ATMs.  Having said that, you can use Conbini ATMs, Japan Post ATMs, and also View Altte ARMs.  Impressively, even when you don't have any free withdrawals left, they only charge you 110 JPY for using a Conbini or View Altte ATM - regardless of the time of day.  

Like Rakuten and JRE Bank, they also have a rank system where you can earn more free withdrawals based on various conditions, but the difference is that their terms are very generous.  

At the lowest rank, you only get one time for free, but all you have to do is log in with your smart phone to reach rank 2, which will give you 5 free withdrawals per month.  

Reaching rank 3 is still not too difficult, and will give you 10 free withdrawals per month for free.  I suspect this would be enough for most people.  

Rank 4 is a bit more difficult to reach for free, but you get 20 free withdrawals per month!  That means you could visit the ATM basically every weekday to withdraw your lunch money and still not pay any fees.  

Note: This was recently changed from unlimited to 20 times per month, so you know there were some people using the ATM three times per day or something.  

The easiest way to reach rank 4 without keeping a huge amount of money in your account is simply to pay for it by signing up for the  Platinum Debit Card (Mastercard).  The cost is something like 11,000 JPY (although the first year is free with some conditions).  

20 free withdrawals per month x 12 months = 240 free withdrawals.

11,000 / 240 = ~46 JPY per withdrawal.  

I am guessing that they are literally just charging what they are paying to the ATM providers.

Of course, since it's a platinum card, it comes with other dubious benefits like airport lounge access, vacation & mobile device insurance, etc.  The most important benefit (besides the increase in free ATM withdrawals) is that you earn points at a rate of 1%, and those points can be converted to cash back.  Granted, you would have to spend 110,000 on the card in a year to make the cash back actually cover the annual fee for the card.  

Still, if you want to use the ATM often, and are not near a JR station, then Sumishin SBI is a solid option.