Options for Saving and Investing
There are many ways to save and invest money in Israel, in the article below we will outline a few of the most popular.
Bank Deposits and Bank Savings Plans (תוכניות חסכון)
This is the classical way for saving money due to the very low risk and protection of principal. The rates offered vary by the size of the deposit and time length chosen to lock in the funds. Further some of the smaller banks offer more competitive rates than the larger banks. The disadvantages of this type of investment include lack of liquidity, low rates of interest, taxation, lack of choice and flexibility in terms of investment options and terms.
Managed Investment Accounts
A managed investment account is suitable for clients who want the security of funds remaining in their own name in their own bank account along with the transparency of knowing exactly where their money is being invested. The type of investments held can be custom tailored to personal circumstances and risk profile and can be altered at any given time in consultation with the investment manager. Fees for managed investment accounts compete favorably with mutual funds but typically there is a minimum account size. Investment managers are regulated by the Israel Securities Authority and have various compliance and internal controls ensuring client’s interests are protected.
Insurance Company Savings Policy (פוליסות חיסכון פיננסי)
Insurance company savings policies offer a wide range of investment options and flexibility to savers of all sizes and types. Typically a lump sum is invested along with monthly contributions into a savings policy that is invested according to the preference of the policyholder following consultation with the insurance agent. A core advantage of these policies is that tax is only paid at the redemption of policy allowing deferral of taxes yet policies can be redeemed at any time. Investment options are wide while account minimum is low.
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