What is an investment provident fund?
An investment provident fund is a liquid savings instrument, available to each and every one. The annual deposit limit of an investment provident fund is today set at NIS 72,616 per person and is updated every year. The amount of the deposit can be increased according to the number of members of your family.
The investment provident fund allows you to withdraw the accrued amount at any age – while paying tax on the profits accrued. An investment provident fund’s unique advantage over similar investment channels such as trust funds, a financial policy or portfolios is that an investment provident fund allows you to receive a tax-exempt pension, as long as you saved money in the fund until you reached the age of 60, and decided to redeem the amount as a monthly pension.
The 4 great advantages of saving in an investment provident fund
Provident funds differ from one another in the amount of the management fees they collect and in the return they produce on their investments. You should remember that a provident fund is a mid- and long-term savings instrument, and it is highly recommended to review the fund’s performance over time rather than in the short run. What significant advantages does the investment provident fund offer?
It is a constantly liquid fund
The accrued capital can be redeemed at any moment and at any age, with no fines or fees. If you indeed redeem the amount, you will have to pay tax on the profits accrued, at a real rate of 25%.
You can make monthly deposits or one-time deposits up to an annual limit of 72,000 shekels. The money can be deposited into several provident funds at different companies concurrently, as long as you do not exceed the annual deposit limit.
2. You can increase the limit amount according to the number of your family members
For example: A family of 4 people can open an investment provident fund for each family member and deposit up to 288,000 shekels per year. If parents open an investment provident fund under the name of their children, they can issue instructions in that provident fund until the children reach the age of 21, but will not be able to redeem the money themselves.
3. Transparency, accessibility and monitoring
The information is available and can be found on the provident funds’ websites and on the Ministry of Finance’s Gemel-Net website, and you can keep up to speed on returns, investment channels and the amount you have accrued.
Kali’s clients receive all the personal information about the provident fund in a concentrated summary on Kali’s website and can receive updates 24 hours a day.
4. Relatively simple mobility between tracks and between funds
Transferring your provident fund is a simple step. At any time, you can transfer your money and deposits into another provident fund. Your rights are fully retained and the move does not involve any payment or tax. We mobilize provident funds for our clients according to the fund best suited for them which will provide them with the highest returns for their money.
How do we select the provident fund that’s best for your money?
Once we gain an understanding of your full financial state of affairs, we will recommend a strategic investment mix according to your goals and risk profile. We will obtain the best management fees for you, map the investment houses most suitable for your needs and desires and monitor the investment houses’ performance for you.
Costs and benefits for a securities purchase/sale fee will be upgraded according to the investment house’s arrangement.
Kali Group – Insurance and Investment Marketing Agency Ltd. holds an investment marketing license as provided in the Regulation of Engagement in Investment Consulting, Investment Marketing and Portfolio Management Law, 5755-1995 (hereinafter and respectively: “Investment Marketing” and the “Consulting Law”), and does not have an investment consulting license. It is affiliated with the manufacturers of the financial products and services marketed by it as part of the provision of the services to the client. For a list of the manufacturers, click here.
The above information may not be treated as a substitute for investment marketing adjusted to meet the client’s needs. Use of the information and data is at the user’s sole risk.