Starting this January, the "Savings for Every Child" program, run by the National Insurance Institute and the Finance Ministry, will mark eight years since its launch. This is the program through which the National Insurance Institute sets aside 57 shekels each month in the child's name in a savings account for their future.

The "Savings for Every Child" program was launched in January 2017 and is intended for every child eligible for a child allowance. The goal is that everyone between the ages of 18 and 21 will begin adult life with savings that can reach tens of thousands of shekels.

The National Insurance Institute deposits 57 shekels per month (as of 2024) for each child. This amount is updated each year according to inflation, and is paid in addition to the child allowance. In addition, there are one-time grants along the way: 284 shekels at age 3, and a one-time grant at age 12 for girls and at age 13 for boys in the same amount. Those who wait until age 21 and do not rush to withdraw the money at age 18 will receive an additional grant of 568 shekels. In total, about 13,000 shekels will be deposited in the child's fund over the years until age 18.

From the age of 18 to 21, the child will only be able to withdraw the money with the parent's permission, and after the age of 21, the savings are at the child's disposal alone. 

Can parents increase the monthly deposit?
Yes, parents can match the amount of the child allowance they receive from the National Insurance Institute, from their own account. Thus, the total deposits up to the age of 18 will amount to a little over 25,000 shekels for someone whose savings begin from birth until the age of 18

The big question: Bank or investment house?
At the start, the child's parents can choose whether to open the savings in a provident fund for investment or in a bank within 6 months of the child's birth. If they do not choose, the savings will be automatically be deposited in a provident fund for investment in a high-risk track, from among the provident funds chosen. If the child's parents decide to save in a provident fund for investment, they can choose from one of 12 investment companies, each of which manages several funds for savings for each child, with varying degrees of risk: high, medium and low. Low risk is a maximum of 25% in stocks; medium is a maximum of 50% in stocks and high is 75% investment in stocks.

In a provident fund for investment, the potential return is significantly higher, but the money is invested in channels characterized by higher risk. The table of returns above reveals that recently, investment houses have given significantly higher returns over banks, certainly in a "high risk" track.

If the parents choose to deposit the savings in a bank, unlike provident funds, banks offer a track without exit points and a track with an exit point after five years. In these two tracks, you can choose between a fixed interest rate that is not linked, a fixed interest rate that is linked and a variable interest rate.Ctd...