Interest Rate Revision Overview
The Ministry of Finance announced on August 28, 2025, the deposit interest rates for the Fiscal Investment and Loan Program applicable from September 1, Reiwa 7.
New Interest Rate Structure
Short-term Rates:
- 1 month to less than 3 months: 0.41%
- 3 months to less than 6 months: 0.43%
- 6 months to less than 1 year: 0.50%
Medium-term Rates:
- 2 years to less than 3 years: 1.23%
- 5 years to less than 6 years: 1.78%
- 10 years to less than 11 years: 2.31%
Long-term Rates:
- 20 years to less than 21 years: 2.85%
- 30 years to less than 31 years: 3.15%
- 40 years and over: 3.30% (longest term)
Institutional Significance
This deposit interest rate forms the core of the Fiscal Investment and Loan Program system, functioning as interest rates for deposited funds from the Government Pension Investment Fund (GPIF), Japan Post Bank, Simple Life Insurance Management Organization, and others.
Policy Background
The current interest rate setting implements adjustments linked to market rates in response to the Bank of Japan's monetary policy normalization. It aims to achieve both sustainability of the Fiscal Investment and Loan Program system and market consistency.
Impact Scope
The new interest rates affect lending conditions to local governments, independent administrative institutions, special corporations, and others, directly impacting funding costs for infrastructure development projects and public investments. Separately calculated interest rates apply for early repayment, also considering flexibility in borrowing entities' funding plans.