As you already know, at the beginning of 2017 the State of Israel will save for each child about – 50 shekels and parents shall have the right to add savings of approximately – 50 shekels more.
All we have to do is choose where and who will manage the savings. An option is a bank or a provident fund.
In my view, there is a clear preference for provident fund because there is a possibility to switch from one fund to another and choose to request a larger risks.
I claim to my clients and readers a number of times that a long-term investment is a central condition for boosting yield and savings for the children so we can use long-term investment risks and wrap it. The state offers three tracks risk – low, medium, increased.
:I gathered some important points for you
- Savings through the fund can switch at any time between different investment tracks the Bank’s savings plan you can choose one of two options: saving without exit stations to 18 and saving it can switch path (same bank) once every 5 years.
There are three options for savings bank’s savings plan: a fixed interest rate not linked, interest rate varies depending on the frame and a fixed interest rate linked to.
If you think the monthly savings of 50 ₪ not enough – you have the option to deposit your child for another 50 shekels more, out of children’s insurance benefits you receive each month from national insurance. In other words, you get direct deposit Social Security pension.
The purpose of the program is long-term savings for your child. So, if you look long term, the yield bank savings plans, significantly lower than the yields of various provident funds. Based on these assumptions Treasury yield bank savings plan is expected to average about 1%, while the provident fund at about 4% on average. A difference of thousands of shekels.
I will give a personal example ..
I have two sons. One 8-year-old and the other 13 – both of them chose a track with an increased risk – fund of Altshuler Shaham Provident shares’
Here are a relevant link with the list of all the funds:
If you have any questions – I’d be happy to answer
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