A small product with a big meaning
חיסכון לכל ילד is a program opened for children in Israel, with monthly deposits from the state and the possibility of an additional deposit from the parents.
The choice between a bank and a קופת גמל is not only technical. It determines whether the money will be managed in a track with characteristics of bank interest or in an investment track in the capital market.
The time frame changes the decision
When the child is young, the investment horizon may be long. In the longer term, some families are willing to consider a track with higher volatility to try to achieve a higher return.
Conversely, a family that prefers higher stability may choose a more conservative track. There is no one right answer for every family.
What should you check?
It is important to check management fees, investment track, change options, withdrawal date and the process of receiving the money when the child reaches the appropriate age.
The choice should reflect the level of risk the parents are willing to take for the child's savings, and the future goal: studies, an apartment, a business or a financial start.