Monthly Child Allowances & New Savings Scheme – Bituach Leumi
As of January 1st, 2017 in addition to the regular, monthly child allowance (Kitzbat Yeladim) parents receive for each child until the age of 18, the government has approved a new savings plan for each child.
Under the new plan, Bituach Leumi (the National Insurance Institute) will deposit 51 NIS per month into a savings account under the child’s name. The money will become available when the child turns 18 or 21 and chooses to withdraw it. Parents will have the option to deposit an additional 51 NIS/month into the child’s account thereby doubling the amount saved i.e. 102 NIS/month (as at January 2019)
The monthly Kitzbat Yeladim, is paid into the parents bank account. The 51 shekels for this new plan, will be paid into the child’s bank account. Both are paid on the 20th of every month.
Signing Up for the Savings Scheme
In order to supplement the savings scheme, you must enter the Bituach Leumi website and select the option to double the savings amount. You can also download the English explanation and instructions in a PDF file here.
Types of Saving Schemes
You have the option of investing the money in a bank or in a provident fund as stipulated and approved by the Ministry of Finances. There are 5 different tracks or plans;
- preferred low risk with fixed interest
- preferred medium risk with variable interest
- preferred heightened risk and fixed interest linked to the Consumer Price Index (CPI)
- preferred track according to Orthodox Jewish law
- preferred track according to Sharia law
If you do not sign up or specify one of these schemes, Bituach Leumi will automatically deposit the funds into a bank or provident fund, as outlined in the explanation on the Bituach Leumi website.
Withdrawing the Funds
You have the option to withdraw the money when the child turns 18 or you can extend the plan for another 3 years until the child turns 21. Exceptions to this rule are outlined on the Bituach Leumi website.
Should you choose to extend the plan, your child will receive an additional 500 shekel grant at age 18 and then a second grant of 500 shekels at age 21.
It is recommended to withdraw the money only for large and significant expenses like the financing of studies, opening a business etc.
You can expect to receive an annual statement of account detailing the status of the savings scheme. The statement of account is sent up until March 1st.