# Everything You Wanted to Know About Keren Hishtalmut

> A comprehensive guide to Keren Hishtalmut – the advantages, the downsides, who it suits and why to check the fees.

- Canonical URL: https://www.shavve.io/en/articles/keren-hishtalmut-guide
- Category: Savings & investing
- Published: 2023-04-30 · Updated: 2026-10-25
- Reading time: 7 min
- Language: English
- Shavve - שווה — https://www.shavve.io/en

## The short version

- Keren Hishtalmut is a medium-term savings plan (about 6 years) with a real tax benefit.
- After 6 years you can withdraw the money without paying capital gains tax on the profits.
- It suits both employees and the self-employed, and you can deposit every month.
- The money stays liquid – use it for studies, a renovation, a car or plain savings. Just check the fees and the investment track.

Keren Hishtalmut (a further-education fund) is one of the most worthwhile savings tools in Israel – and one of the easiest to overlook. Here is the short version: what it is, who can have one, what to check, and how it plays out over time.

## What is Keren Hishtalmut?

It is a savings plan designed for the medium term – about **6 years**. During that time you deposit every month, and at the end you can withdraw everything **without paying tax on the profits**.

Move the dial to see how the period advances – and what changes at the milestone:

*The 6-year clock (on the website: an interactive calculator)*

## Who can open one?

**Employees**
- The fund usually comes through work
- The employer deposits part, and the employee adds too
- Check your payslip and employment agreement for what exactly is agreed

**Self-employed**
- You can open a fund yourself and deposit on your own
- Considered one of the most worthwhile tools for the self-employed
- The deposit and the tax-benefited ceiling follow the current rules

### The 6-year journey, step by step

- **Today** — Open or review the fund: Check who deposits, at what rate, and in which track.
- **Years 1–5** — Deposit consistently: The more regular the deposits, the more time works for you. Review fees once a year.
- **Year 6** — The milestone: The period is complete – you can withdraw without capital gains tax on the profits, subject to the rules.
- **After** — Keep going or withdraw: Leave it to keep growing, or use it for the goal you planned.

## What are its advantages?

- **6** — years of saving to the milestone
- **25%** — the capital gains tax rate the fund exempts you from, when conditions are met

- **Exemption from capital gains tax** on the profits (the regular rate is 25%), provided the money is withdrawn after the period is complete.
- **Liquidity** – after 6 years you can withdraw without penalties.
- **Flexibility** – the money is not locked to one purpose: studies, a car, a renovation, travel or financial security.

## Are there disadvantages?

> **Watch out — Early withdrawal**
> If you withdraw **before** 6 years have passed, you usually pay regular tax on the profits. Before withdrawing, check with your fund what it means in your case.

There is also the matter of cost: management fees and the investment track affect how much you end up with. The gap looks small in any one year, but it compounds:

*What do management fees cost over the years? (on the website: an interactive calculator)*

> **Tip**
> Management fees are a yearly percentage of the balance, and they can be compared between funds. If you pay more than is common, you can ask for a reduction or look at moving to another fund.

## A checklist before you open or update

**What to check**

- [ ] Whether my employer deposits, and what share of salary
- [ ] What the management fees in my fund are, and how they compare with others
- [ ] Which investment track I am in, and whether it fits my horizon and risk
- [ ] When the 6-year period starts and when it ends
- [ ] The current ceiling for tax-benefited deposits (Tax Authority / Capital Market Authority site)
- [ ] Self-employed: set a fixed monthly deposit so it doesn't slip

### How do you find an old fund?

1. **Check your payslips** — If a Keren Hishtalmut deduction appears, the managing provider is listed there.
2. **Look for forgotten money** — On the government site Har HaKesef you can check whether any money was left in your name.
3. **Ask the provider for a report** — The report shows the balance, the fees and the track.
4. **Decide: keep, update or move** — Compare funds before you decide.

> **Key point — Three common mistakes**
> (1) Withdrawing before 6 years without checking the consequences. (2) Forgetting an old fund from a previous job. (3) Not reviewing fees for years.

## Why does it matter?

Because it is savings that can serve any purpose – replacing a car, travelling abroad, children's education or plain financial security. And it is one of the few tools that combine **flexibility** with a real **tax benefit**.

## What if you need the money before six years

The main tax benefit depends on waiting six years, so an early withdrawal may cost tax on the gain. There are special cases in which the law allows withdrawal on other terms, and they are set out on the Capital Market Authority's site and in the fund's documents. If you are about to need the money in the near term, check the tax meaning before withdrawing, and perhaps choose a more flexible tool, such as an investment provident fund. The comparison is in [Study fund, provident fund or regular saving](https://www.shavve.io/en/articles/hishtalmut-vs-savings).

> **Watch out — Before you withdraw**
> Before an early withdrawal, ask the provider for an exact calculation of the tax that will apply, and check whether you can withdraw in a way that does not harm the benefit. Note that the decision involves dates, so get the answer in writing.

## What happens when you change jobs

The study fund belongs to you and not to the employer. When you move to a new job you can keep depositing in the same fund, move the deposits to another fund or open a new one. It is better not to stop without checking, because the six-year clock counts from the first deposit in each fund, and opening a new fund starts a new count. So before moving, check what happens to the date and to the benefit, and which fees will apply.

| Situation | Option | What to check |
| --- | --- | --- |
| Moving to a new job | Keep the same fund or ask the new employer to deposit into it | The fee terms in the existing fund |
| You want a cheaper fund | Move to another fund | What happens to the six-year count and the track |
| Deposits stop | The money stays in the fund and keeps accumulating | The fee on the balance remains |
| Several funds | Consider merging | Whether merging harms the benefit dates |

## How to choose a track in a study fund

The investment track decides how much risk you take. A study fund is meant for at least six years, so someone not expected to withdraw soon can afford a track with more exposure to equities, while someone close to withdrawing will prefer a more conservative one. As with pensions, compare similar tracks and check fees. The data is published on [Gemel Net](https://gemelnet.cma.gov.il/).

- If you will withdraw in many years: you may consider a track with more exposure.
- If you plan to withdraw within a few years: a more conservative track limits risk.
- Check whether you can change track, and whether there is a cost or a limit.
- Do not choose a track by past return alone: it does not promise the future.

## Questions before opening or updating

**What to check**

- [ ] What are the fees on deposits and on the balance, and how do they relate to the ceiling?
- [ ] Which investment tracks exist, and how do you switch between them?
- [ ] What are the withdrawal terms, and what happens if you need the money before six years?
- [ ] Does the employer deposit, and how is the deposit made?
- [ ] Do I already have an old fund, and should I merge or keep going?

## The self-employed and a study fund

A self-employed person can also open a study fund and deposit into it, and enjoy the tax benefit under the terms of the law and the ceilings. Since no employer deposits, the deposit is your own initiative, so set up a standing order and check with an accountant or tax adviser which benefit applies in your case. Check the current ceilings and terms on the authority's site.

## Common mistakes

- Withdrawing before six years without checking the tax.
- Forgetting an old fund from a previous job, and noticing only years later.
- Choosing a track by one year's return.
- Stopping deposits without checking the effect on the benefit.

## Questions for an accountant about a study fund

**What to ask**

- [ ] What deposit amount carries a tax benefit in my case?
- [ ] How does the benefit affect my tax in the coming year?
- [ ] What will the tax be if I need to withdraw before six years?
- [ ] Is it worth depositing also an amount above the maximum that carries a benefit?

## How to check that deposits went in correctly

Every so often, check that the deposits into the study fund match what was agreed:

1. On the payslip, find the study-fund line: the employee's deduction and the employer's contribution.
2. In the fund's statement or personal area, check that each month has a deposit for a matching amount.
3. The rates are set in the employment agreement or a collective agreement, so there is no single rate for everyone. Ask your employer what applies to you.
4. Check the salary ceiling that qualifies for the tax benefit on the Tax Authority's pages. A deposit above the ceiling may be taxable.
5. If a deposit is missing, go to the employer first, and if it is not resolved, to the fund manager.

On reading the statement itself, see [how to read a pension statement](https://www.shavve.io/en/articles/how-to-read-pension-statement). A study-fund statement is built in a similar way.

**Can I deposit any amount?**
There is a yearly ceiling for tax-benefited deposits. You can deposit more, but the benefit doesn't cover the whole amount. Check the current ceiling on the Tax Authority or Capital Market Authority site.

**Can I move a Keren Hishtalmut between providers?**
Usually yes – you can ask to transfer to another fund. First check with the fund whether it affects the 6-year period or costs.

**Do I have to choose an investment track?**
You can choose, and if you don't there is a default track. A track that fits your horizon and risk can affect the outcome, so review it every few years.

**What happens if I withdraw a study fund before six years?**
The main benefit depends on six years, so an early withdrawal may cost tax on the gain. There are exceptions in the law, so check with the provider and the authority.

**What happens to a study fund when I change jobs?**
It is yours. You can keep depositing, move it or open a new one, but check what happens to the six-year count before any change.

**Can I open a study fund without an employer?**
Yes. A self-employed person can open one and deposit, under the terms of the law and the ceilings. Check with an accountant or tax adviser which benefit applies.

**Where can I compare study funds?**
On the Capital Market Authority's Gemel Net site, which lets you compare fees, tracks and return.

**All your savings in one place** Keren Hishtalmut, pension and provident funds – Shavve brings them together so you can see what you have and where to check.

## Sources

- [gov.il – Capital Market Authority and Tax Authority](https://www.gov.il)
- [Gemel Net: provident and study fund data from the Capital Market Authority](https://gemelnet.cma.gov.il/)
- [Kol Zchut: management fees in an investment provident fund](https://www.kolzchut.org.il/he/%D7%93%D7%9E%D7%99_%D7%A0%D7%99%D7%94%D7%95%D7%9C_%D7%91%D7%A7%D7%95%D7%A4%D7%AA_%D7%92%D7%9E%D7%9C_%D7%9C%D7%94%D7%A9%D7%A7%D7%A2%D7%94)
- [Capital Market, Insurance and Savings Authority (gov.il)](https://www.gov.il/he/departments/capital_market_insurance_and_savings_authority)