Japan’s deposit, loan and mortgage rates are moving at different speeds

For someone keeping ¥1 million in an ordinary Japanese bank account, the average posted rate in March 2024 worked out to roughly ¥20 in gross interest a year. At September 2026’s average rate, the same calculation produces about ¥3,220.

That is a meaningful departure from near-zero returns. It is not, however, the whole interest-rate story: average rates on newly contracted bank loans have risen by more than the rates paid on deposits, while mortgage advertisements require careful attention to the difference between posted and preferential rates.

Deposit rates have moved from microscopic to visible

The Bank of Japan’s deposit-rate series shows that the average posted rate on ordinary deposits rose from 0.002% in March 2024 to 0.322% in September 2026. The average one-year rate on time deposits of at least ¥10 million increased from 0.005% to 0.472% over the same period.

At the time-deposit series’ ¥10 million threshold, those rates correspond to approximately ¥500 versus ¥47,200 in gross annual interest. That is a simple rate calculation, before tax, rather than a quotation for a particular account.

A current bank example lands in the same general territory. As of September 20, SMBC listed a standard ordinary-deposit rate of 0.400% and standard time-deposit rates ranging from 0.500% for terms of up to one year to 1.250% for ten years, before tax.

Readers can reproduce the basic comparison for any balance:

balance × annual rate ÷ 100 = gross interest for one year

At SMBC’s listed rates, ¥1 million would therefore generate about ¥4,000 in an ordinary account or ¥5,000 in a one-year time deposit, assuming the quoted rate applied for a full year. Eligibility, tax and product terms can change the amount actually received.

Newly contracted loan rates rose further

The lending side has moved more sharply in percentage-point terms. BOJ data for domestically licensed banks show that the average rate on all new loans and discounts rose from 0.794% in July 2024 to 1.706% in July 2026.

These are averages across new contracts, not rates available to every household or company. The mix of borrowers and loans can also change from month to month. Still, the consistent rise across all three series is direct evidence that higher rates have reached newly arranged credit.

A mortgage can carry several different rates

Mortgage pages make the transmission harder to read because a bank may display both a benchmark rate and a lower applied rate for qualifying customers.

SMBC’s historical mortgage table places its posted variable-rate benchmark at 3.375% in September 2026, up from 2.875% in September 2025. That does not mean every SMBC borrower paid either rate: it is a posted historical level from which discounts or other contract provisions may apply.

For comparison, MUFG’s September 2026 offers advertised a 1.195% applied variable rate for qualifying new borrowing against a 3.375% posted rate. Its advertised applied rate for an initially fixed ten-year loan was 3.63%. MUFG lists eligibility conditions and fees, including a charge equal to 2.2% of the borrowed amount, so the advertised interest rate alone is not a complete measure of a loan’s cost.

The important distinction is between:

• a posted rate, which serves as a bank’s reference level;
• a preferential or applied rate, reflecting a discount and eligibility conditions; and
• the rate and repayment rules written into an individual borrower’s contract.

Comparing a posted rate at one bank with a discounted offer at another would therefore give a misleading picture.

Higher savings returns still sit beside higher prices

Japan’s August 2026 consumer-price release, published September 18, showed headline prices 1.9% higher than a year earlier. Prices excluding fresh food rose 1.7%, while prices excluding both fresh food and energy rose 1.9%.

Those figures describe changes in a national basket, not any one household’s expenses. They also look backward over the preceding year, whereas a quoted deposit rate describes interest that may be earned under specified terms. The comparison is nevertheless useful in scale: even after their substantial rise, typical ordinary-deposit rates remain below the latest annual increase in consumer prices.

A BOJ Financial System Report published in October 2024 explains why rates do not move together. Banks consider market supply and demand, competition, their capacity to provide services and their relationships with customers when setting loan and deposit rates. That report is an explanation based mainly on information available through September 2024, not a current assessment of every 2026 product.

The report also notes that five-year and 125% payment provisions used in some variable-rate mortgages can limit near-term increases in scheduled payments. Where those provisions apply, they change the timing of the adjustment; they do not establish that higher interest costs disappear. The borrower’s eventual cost and repayment path depend on the contract.

The measured result is an uneven transition: deposit interest is visible again, newly contracted loans cost more on average, and mortgage shoppers must look past the largest displayed number—or the smallest—to determine what they would actually pay.

Sources

• Statistics Bureau of Japan — Consumer Price Index, August 2026
• Bank of Japan — Average Contract Interest Rates on Loans and Discounts
• Bank of Japan — Rates Posted on Time Deposits and Ordinary Deposits
• SMBC — Yen Deposit Rates
• SMBC — Historical Mortgage Rate Levels for New Loans
• MUFG Bank — Mortgage Rates
• Bank of Japan — Financial System Report, October 2024