The economic story
A קרן השתלמות is a unique Israeli savings product: on the one hand, it can become liquid after a specified period, and on the other hand, it can still continue to work for the saver even after the date funds become available for withdrawal.
A common mistake is to assume that availability for withdrawal means you should withdraw. Liquidity mainly gives you freedom of choice: you can withdraw, or leave the money invested and keep your options open.
When withdrawing could work against you
Withdrawal before the fund meets the liquidity conditions may result in a significant tax liability. A withdrawal from a liquid fund can also harm the accumulation process, because money that goes out of the fund stops participating in future returns.
In addition, an old קרן השתלמות can be a convenient asset for capital management: it already exists, sometimes benefits from management fees that can be improved through negotiation, and can serve as an intermediate component between short-term savings and long-term pension savings.
How do you make a mature decision?
Before withdrawing, you should check whether the need for money is one-time, whether there is a cheaper alternative, and what the price is for giving up the continued accumulation. In some cases, you should also check the possibility of receiving a loan against the fund, but a loan is also a liability that must be managed carefully.
The correct approach is to see the קרן השתלמות as a financial asset, not just an available account. The decision should be part of a wider picture of cash flow, taxation, savings and family goals.