Do you know Yucho?

August 30th, 2010 by Philip Brasor & Masako Tsubuku

 

If it looks like a bank and smells like a bank, it must be a bank

If it looks like a bank and smells like a bank, it must be a bank

Yubin chokin, the savings function of Japan’s post office, has perpetually been a thorn in the side of the Japanese banking industry, much the same way that postal insurance plans have been the thorn in the side of foreign insurance companies that have tried to make inroads in Japan’s lucrative life insurance market. The privatization of Japan Post that former Prime Minister Junichiro Koizumi staked his career on has been slowed lately with the ascendancy of the Democratic Party of Japan, which is trying to roll back some of Koizumi’s reforms.

Actually, a lot of people already have Yucho Ginko passbook accounts but may not use them much since most companies demand that employees open accounts in designated banks in order to receive salaries. In fact, a new Japan Post advertising campaign reminds viewers that their yucho accounts still beat bank accounts in a number of ways. The CM in question emphasizes that yucho accounts are pretty much the norm in the countryside, since banks still have not penetrated that far. But the ad then shows that city folk, personified by a new shakaijin (full-time employee) who just moved from his rural home town, should keep using their Yucho passbook accounts because they’re more convenient and economical than bank accounts.

There are about 24,000 post offices throughout Japan and almost every one has an ATM, so your money is available anywhere you roam. More significantly, these ATMs don’t charge fees for withdrawals or transfers between Yucho ATMs, even at night and on weekends. Almost all banks charge ¥105 per withdrawal between 6 p.m. and 8 a.m. weekdays and all day on weekends for regular passbook accounts. (If you use your Yucho ATM card to access your cash through a bank ATM then you will be charged the fee.)

Availability, however, is limited in terms of time. The smaller the post office, the less likely its ATM is working outside of normal business hours. But medium-sized post offices have ATMs that are open from 7 in the morning until 11 at night. And a few in the larger cities are even open 24 hours a day. Except for the most remote post offices, most are available 9 a.m. to 5:30 p.m. on Saturdays and Sundays.

Another reason yucho accounts were a pain to the banking industry is that their savings plans offered higher interest. Despite the partial privatization, they still do. Granted, the difference is minuscule, but given the compulsive belt-tightening that characterizes the current recession and which adds to the deflation spiral, it’s obvious that people are looking for bargains wherever they can, regardless of how small they are. Though still tied to the government, Japan Post is desperate for funds, so it’s finally taking promotional advantage of its small but significant perks to get people to use its bank more.

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