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More money in the account: Where is the most profitable to open a savings plan?
Let investment experts manage your savings, pay low management fees and withdraw the money at any time you choose.
Sounds too good to be true?
Not after you know the direct savings of direct insurance
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Direct Insurance
In conjunction with direct insurance
Sunday, 04 July 2021, 14:48 Updated: Tuesday, 13 July 2021, 09:23
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(Photo: ShutterStock)
Savings plans are a somewhat striped issue in the society in which we live. They might be likened to long-distance running: we all know it will allow us a better future, but it's much easier for us to stay home right now and stare at another series on Netflix.
the difference? Unlike running, to start saving you do not have to leave home at all. More than that, if we do not start running, no one will run for us, whereas when we save through the capital market, the money will continue to work even if nothing is done.
You can continue with images from the world of running, but the principle is understandable - saving is easy, and does not require special effort or expertise. Now it remains only to continue reading the article and understand why a direct insurance "direct savings" policy is the best way to save, so that your money will work for you.
What is a savings policy?
The word policy may be a little confusing, but in principle it is a flexible savings plan, which allows anyone to invest in the capital market at different levels of risk, with the money being managed by insurance companies instead of by investment houses or banks.
So what is the difference between a savings policy and the various savings plans?
There are a number of significant differences between the savings plans of investment houses and banks and the savings policy of direct insurance, with the obvious benefits being in favor of the savings policy.
When it comes to management fees, investment houses like to use the principle "what is worth is worth quality" or alternatively "what is cheap is actually expensive". This is how they justify the high management fees they charge their customers. The thing is that in the case of savings - cheap is just cheap. The management fee is calculated as a percentage of the accumulation, so the less management fee you pay, the more money you will have left in the fund.
The average management fee in the market today is 1.1% of the amount accrued each year, while the management fee in the direct insurance savings policy, on the other hand, is only 0.55%. This is a huge and significantly cheaper gap than what is customary in the market, and it means that you have more money left in the coffers.
It is important to emphasize that management fee gaps are not due to differences in expertise or a superior investment management strategy. Simply in direct insurance the whole process is done digitally and directly, one that skips the need for unnecessary manpower and brokerage fees of agents. The savings go directly to clients, who enjoy low management fees and their money is still managed by expert investment managers.
How much money do you need to spend to start saving?
Direct Insurance has set itself the goal of lowering as many barriers as possible, to enable every person to save through the advanced tools of the capital market. Investment houses and banks ask for a minimum amount of NIS 300,000 or a deposit of NIS 70,000 per year, just so that you can open a savings plan with them. In direct insurance, on the other hand, you can also deposit NIS 200 in a monthly standing order, or deposit on a one-time basis 5,000 NIS to start saving. Of course the amounts are flexible and can be increased over the years, depending on the amount of money available.
Is it possible to withdraw the money at any stage? The
recommended savings are for the distant future, but sometimes for various reasons we need money immediately. The level of liquidity is very low - that is, there are pre-defined departure stations and any deviation from such a station will be accompanied by a fine, which may reach the level of any profit accrued over that period.
With direct insurance, however, the liquidity is high and the money can be withdrawn at any time and without penalty. This way we can be sure that our money continues to accumulate a return, but also available when we need it.
What happens if you want to switch between investment paths?
When investing in the capital market, it is possible to choose between several investment paths, the main difference between which is the level of risk. The rule of thumb is simple: the higher the level of risk, the higher the possibility of profit, but the more volatile the portfolio. The lower the level of risk - the lower the chance of profit, but the more solid the portfolio.
In this context, there is really no right investment route - an equity route is considered a higher level of risk than the government bond route, for example. The saver decides which route he is interested in, according to his desires, needs and characteristics. The choice of the specific shares or bonds that make up the savings policy is made for you by an expert investment manager.
It is important to know that there are places where you will have to pay a commission and tax on switching between launch routes. In direct insurance, however, changing the investment route does not involve additional cost.
What is the recommended saving time?
The time saved should of course suit your needs and serve your goals. It is important to remember in this context that the savings time affects the nature of the track - a stock track is more volatile and therefore correct in the long run.
Why should you start saving digitally?
Today it is easier and simpler than ever to save.
No need to go to the bank, wait on the phone for an investment advisor or save years so we can invest in the capital market.
A direct insurance company has made the entire savings process digital and allows anyone to open, manage and track their savings plan online.
This way it can cut agents' commissions and reduce the costs of unnecessary manpower.
It passes the savings directly to its customers.
Just go to a direct insurance website, choose an investment route, and start saving.
Want to talk to a representative anyway?
Direct savings service people will always be happy to help.
Where is the best place to start a savings plan?
(Photo: ShutterStock)
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