Starting from January 2017, every child, that is entitled to receive child allowance, the Government will start saving 50 NIS for them until they reach the age of 18. Please note that is in addition to the child allowance that parents receive.
The idea behind this scheme, is that children will reach the age of 18 with an amount of money at their disposal to do as they wish. This amount can be used for studies, setting up a business or travelling. The Government found that in this modern day and age parents are neglecting to save for their children. So the scheme also encourages parents to participate in saving for their offspring and to match the amount that the government is paying in therefore the total amount being saved per month is NIS 100.
The money will be deposited every 20th of the month, which is the date when parents also receive the child allowance. Every year, in the month of March the parent will receive a report of the saving scheme.
The parents will be asked to choose what saving scheme they want the Government to deposit the NIS 50. Either
An investment provident fund – The money which shall be deposited in an investment provident fund shall be saved in an investment track of your choosing. In each of the funds which have been selected by the Ministry of Finance for long-term savings management, you may choose to deposit the savings in one of 5 investment tracks being offered by each provident fund, and you can switch from one investment track to another at any time. Each investment track operates under a different investment policy regarding the manner in which the money is invested, which changes according to the level of risk in each track.
Bank – The money deposited in the bank shall be saved in a savings track in accordance with the interest being offered. In each of the banks nominated by the Ministry of Finance to manage long-term savings, you may choose to deposit the savings in one of 3 tracks offered by them, in two types of saving plan: a fixed term savings plan or a savings plan from which the funds may be withdrawn at five year intervals. A parent who chooses the 5 year exit option track may change the savings track on each exit date as aforesaid.
A couple of important points:
The saving scheme is until the child reaches the age of 18. Upon reaching this age the child will receive a further NIS 500. However, if the child does not touch the saving scheme and leaves it intact until they reach the age of 21 (that is when the child finishes their national service) they will receive an extra NIS 500.
The parents cannot touch the savings scheme, to pay for something like a bar/bat mitzvah, but are allowed to withdraw money if the child requires some expensive medical treatment. If the child passes away the parent will be permitted to withdraw the amount saved.
All the above information was taken from the website translated into English http://haotzarsheli.mof.gov.il/Documents/english.pdf
Even though the Government has stepped up to start saving for the children of today, it does not stop your responsibility as parents to save as well. I will be happy to assist you in setting up a saving scheme for your child. Call me now on TEL: 054-4217207 and ensure your child’s financial future.