The provident funds' annual reports, which manage the "savings per child" program, are currently being sent to about two million children. The "live risk per child" program is managed by 11 provident fund management companies, which manage about NIS 15 billion.
Due to the much volatility in recent years, as well as the tides in the markets, the gaps between the various tracks are extremely significant.
Menora Mivtachim in third place,
In a study we conducted we found that in 2021 this program yielded an average return of 11.76%.
For comparison, in banks the highest annual interest rate currently offered stands at only 2.45%.
As part of the "savings per child" program, for each child entitled to a child allowance, the state deposits NIS 52 in favor of a savings plan which, as a rule, can be used by the child from the age of 18 for any purpose.
At the same time, the child's parents will be able to deposit an additional NIS 52 each month for the benefit of the child's savings.
Yield disparities over the past five years, Photo: Reuters
In addition to the monthly deposits, the state deposits one-time grants of about NIS 1,000 in total during the life of the savings.
At first glance, this seems like a small and negligible amount, but the "Savings for Every Child" program is expected to save the child tens of thousands of shekels. 6%.
Managing your children's finances
So what exactly does the provident fund report contain, and why should you pay attention to save more? We enlisted the help of Eyal Siani, a pension expert and VP of Financial Services Quality to understand.
• The funds can be transferred from one company to another without restriction.
The gaps in yields generated by different funds can be huge.
All that is required is to submit an application to the fund to which you would like to transfer, and this will take care of transferring the funds to it.
In 2021, in first place, the return of an analyst was an increased track, which yielded your children no less than 27% per year, compared to the Phoenix provident fund a small track that yielded less than 5% during that period.
The savings will yield quite a bit of money for the children, Photo: Yehoshua Yosef
Even when looking at the last five years, an analyst leads by a large margin: in the increased track this fund has yielded 94.3% in the last five years, in second place is Infiniti with 69.5%, and in third place is Menora Mivtachim with 69%.
Which route should you choose?
A large portion of the funds are in investment tracks with low exposure to equities, although there are many years left until the funds can be withdrawn.
It is advisable to consider transferring the funds to an investment track with higher exposure to equities.
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