National Insurance Program Offers Parents Ways to Boost Children's Savings
Israel's National Insurance Institute (Bituah Leumi) is highlighting options for parents to significantly increase the savings accumulated for their children through the 'Savings for Every Child' program, established in 2017. The program mandates a monthly deposit of 58 shekels for each child, with parents having the choice to match this amount, doubling the monthly contribution. These savings can be managed in provident funds or bank deposits.
A report released in August revealed that by the end of 2025, the program will have accumulated approximately 25.4 billion shekels. The National Insurance Institute contributed 70% of this sum (17.7 billion shekels), while parents added 7.7 billion shekels. The total accumulated profit across these savings plans reached about 3.85 billion shekels during this period.
However, not all parents opt to maximize their contributions. In 2025, out of over 3.4 million accounts with deposits, parents added the extra 58 shekels in 63.2% of cases. Overall, the cumulative parental participation rate in enhancing savings since the program's inception is around 60%.
New analysis by PwC, commissioned by the Investment Houses Association and reported by "Calcalist," indicates that the choice of savings vehicle can have a substantial impact. For accounts with roughly 11,500 shekels in expanded savings, a higher-risk provident fund yielded a profit of about 8,800 shekels. In contrast, the best-performing bank deposit option yielded approximately 2,000 shekels, with the lowest yielding only 500 shekels.
Simulations suggest these differences could be even more pronounced over time. Based on historical returns over nine years, a higher-risk provident fund could reach about 81,600 shekels by a child's 18th birthday, with nearly 56,000 shekels in profit. Bank deposits, under the same simulation, would range from 29,000 to 35,000 shekels. Extending the savings to age 21 could see the higher-risk option reach 114,000 shekels, compared to 30,000-40,000 shekels in banks. These projections are based on assumptions about future returns and do not guarantee past performance, also being influenced by risk levels and taxation upon withdrawal.
Furthermore, legislative amendments effective since early 2025 allow for the transfer of future deposits from banks to provident funds. Approximately 98,000 savings accounts were moved during 2025, reducing the proportion of active savings managed by banks to about 16%, or roughly 583,000 accounts.
