# Management Fees: How a Small Percentage Eats a Big Part of Your Savings

> Why a one-point fee gap turns into years of savings, where fees hide in pension and study funds, and which questions to ask your fund manager.

- Canonical URL: https://www.shavve.io/en/articles/fee-drag-explained
- Category: Savings & investing
- Published: 2026-10-06 · Updated: 2026-10-13
- Reading time: 7 min
- Language: English
- Shavve - שווה — https://www.shavve.io/en

## The short version

- Fees are charged every year on your whole balance, so they work against you through compounding.
- There are two main kinds: on deposits and on accumulated balance. Check both.
- A small percentage gap can reach tens of percent of the final balance over a long saving period.
- Low fees are not everything: the investment track, insurance cover and service matter too.
- You can check, compare and ask your fund for a better rate. It often takes one evening.

Most people know the balance in their pension, and few know what it costs to keep it there. The reason is simple: management fees never arrive as an invoice. They quietly come out of your money, month after month, which is why they are easy to miss. This article explains how they work, why a small percentage is not small at all, and what you can do about it.

## Two ways you get charged

**Fee on deposits**
- A percentage of every new deposit that goes into the savings.
- Only charged when you deposit: no deposit, no charge.
- Each product has a legal cap that can change. Check the current cap on the Capital Market Authority site.
- Matters mostly for people who are still saving and depositing regularly.

**Fee on accumulated balance**
- An annual percentage of what you have already saved.
- Charged even when you stop depositing, and it grows with the balance.
- Also capped by law, and the cap is also updated from time to time.
- The heaviest piece over long horizons, since the balance grows and so does the amount charged.

> **Key point — Why it matters**
> Fees accumulate through the entire saving period, not just once. Every shekel charged today is a shekel that won't compound twenty years from now. That is why the effect grows with time instead of shrinking.

## See the gap for yourself

The tool below lets you enter a starting amount, a monthly deposit, an assumed return and two fee levels, and watch the gap develop over the years. The numbers are illustrative only: not a forecast and not a promise of any return.

*What fees cost you over time (on the website: an interactive calculator)*

> **Note — A note on the numbers**
> In a simple long-term calculation, a gap of one percentage point a year in fees can reduce the final balance by roughly a fifth to a quarter, depending on when deposits are made. This is an illustration rather than a forecast, but it shows why checking is worth it.

## What to do about it

1. **Gather every product** — Pension, study fund, provident funds, old managers' insurance. Many people find a forgotten product at a previous employer. Shavve gathers all your accounts in one place and shows them together.
2. **Find both fee rates** — Your annual or quarterly statement shows the fee on deposits and the fee on balance. Write down both for every product.
3. **Compare** — Against similar products on the market and against the cheapest product you hold. Compare similar investment tracks, so you don't compare apples to oranges.
4. **Contact your fund** — Fees are not carved in stone. A clear request often gets a discount. If it doesn't, consider moving to another provider.
5. **Check before you move** — Moving between providers can affect insurance cover and conditions you built up. Check before you decide.

**Questions to ask your fund**

- [ ] What are my fees on deposits and on balance, in each product?
- [ ] Can I get a discount on fees? What do I need to do to get it?
- [ ] Is the discount permanent, or does it end on a date? What happens then?
- [ ] Which investment track am I in, and what exactly does it hold?
- [ ] What insurance cover am I paying for out of the deposit, and at what cost?
- [ ] Are there any other costs: investment management charges, trading fees, other expenses?
- [ ] What happens to the insurance cover I built up if I move to another provider?

> **Watch out — Cheapest is not always best**
> Low fees are an advantage, but not the only criterion. The investment track, the insurance cover you need and the quality of service all matter. Sometimes a cost gap is justified, sometimes not, and the only way to know is to check.

**Can I even see my fees?**
Yes. They appear in each fund's quarterly and annual statements, and on the product page on the provider's site. Shavve shows them together for all the products you connect, so you don't have to hunt in different places.

**What is the difference between fees on deposits and on balance?**
On deposits: a percentage of every amount you deposit. On balance: an annual percentage of what you have already saved. Both are charged, and it is worth checking both.

**Am I allowed to ask for a discount?**
Absolutely. You can contact your fund or your insurance or pension agent and ask them to lower the fees. The answer isn't always yes, but asking costs nothing.

**Does moving between funds cost money?**
Moving between providers within the same type of product usually carries no fee, but confirm the terms with the provider, especially the effect on your insurance cover.

**Isn't return more important than fees?**
Return matters a lot, but you can't know it in advance, while fees are known. So compare net returns, after fees, rather than looking at each number separately.

**Want to see what you actually pay?** Shavve connects all your pension, study fund and provident accounts, read-only, and shows each one's fees side by side. Join the waiting list.

## Sources

- [Capital Market, Insurance and Savings Authority](https://www.gov.il/he/departments/capital_market_insurance_and_savings_authority)