Japanese banks are offering interest rates around 1% and special point-grant incentives to attract customers during the summer bonus season [1, 2, 3].

This shift marks a departure from years of near-zero returns, as lenders compete for deposits while the Bank of Japan continues to raise rates [3, 5]. Consumers are increasingly seeking higher returns for their seasonal bonuses, prompting a surge in aggressive promotional campaigns.

Some institutions are offering limited-time fixed-deposit campaigns with interest rates reaching 1.55% [2]. These offers target the specific window when employees receive their summer payouts, creating a competitive environment for retail deposits.

PayPay Bank is participating in this trend with a tiered approach. The bank began offering point grants on July 1, 2026 [4]. Additionally, the bank said it will raise the maximum interest rate for its "Step-Up Yen Deposit" ordinary savings account to 0.7% starting Aug. 1, 2026 [1].

Industry observers note that the competition extends beyond simple interest rates. Banks are integrating loyalty rewards and point-based incentives to secure long-term customer loyalty, a strategy designed to capture liquidity in a rising-rate environment [3].

While some banks maintain rates closer to 0.7%, others are pushing significantly higher to differentiate their products [1, 2]. This variance reflects a broader fragmentation in how Japanese lenders are adjusting to the end of the ultra-low interest rate era [3].

“Banks are offering interest rates around 1% and special point-grant incentives to attract customers”

The emergence of 1% plus interest rates on retail deposits signals a fundamental shift in the Japanese banking landscape. For decades, the 'lost decades' were characterized by stagnant rates that discouraged saving and spending. As the Bank of Japan normalizes monetary policy, the competition between digital-first lenders like PayPay Bank and traditional institutions suggests that consumers now have significant leverage to move their capital in search of yield.