Everything You Wanted to Know About Kupat Gemel for Investment

Kupat Gemel for Investment is a simple way to invest in the capital market without managing a portfolio yourself. Here is what matters: how it works, who it suits, the pros and cons, and what to check.

01What is Kupat Gemel for Investment?

It is a type of savings that lets you invest in the capital market – simply. You choose how much to deposit and how to invest (general, stocks, conservative and so on), and the investment manager does the work.

1. 1

   Choose a provider and a track

   Compare providers by management fees and returns over time, and pick a track that fits your horizon and risk level.

2. 2

   Deposit

   You can deposit a lump sum or a monthly standing order, up to the yearly ceiling set by law.

3. 3

   Decide when to withdraw

   You can withdraw whenever you like, or wait until retirement age and receive the money as an annuity.

02Who is it suitable for?

Almost everyone – young savers, parents saving for their children, and people nearing retirement. It is very flexible savings: you decide how much to deposit, and later what to do with it. Check the current yearly deposit ceiling on the Capital Market Authority site.

In long-term saving, time works for you. Play with the numbers and see how much of the final amount comes from growth:

Open as a full calculator: Compound interest calculator

Have a goal – an apartment, a car, studies? You can estimate roughly how much to deposit each month:

Open as a full calculator: Savings goal calculator

03What are the advantages?

• Liquidity – you can withdraw whenever you want.
• Long-term tax benefit – if you wait until retirement age and take the money as an annuity, you can be exempt from capital gains tax, subject to the law's conditions.
• Simplicity – one product, one track you choose, and an investment manager who handles the rest.

04What are the disadvantages?

There is a limit on how much you can deposit each year. And as long as the money is not withdrawn as an annuity, you pay regular capital gains tax (25%) like any other investment.

What does saving in an investment provident fund look like over time?

1. Step 1

   Set a goal and a horizon

   An apartment in five years or retirement in twenty-five – it shapes the track.

2. Step 2

   Choose a track and deposit

   You can start small and increase over time.

3. Step 3

   The money grows and stays liquid

   You can withdraw at any point, but check the tax consequences first.

4. Step 4

   Retirement

   Withdrawing as an annuity at the eligible age can allow a tax benefit, subject to the rules.

05So what's the bottom line?

Kupat Gemel for Investment is a smart, simple and convenient product. It combines the flexibility of liquid savings with tax benefits for long-term savers. Just choose a track that suits you – and remember to check the management fees.

06How to compare investment provident funds

Funds differ in ways that can be measured, and they are checked before opening. The public data is gathered on the Capital Market Authority's Gemel Net (opens in a new tab) site, and lets you compare return, fees and assets under management between funds and between tracks. To keep the comparison fair, compare similar tracks only.

07Common uses

• A medium-term goal where access to the money matters, such as a purchase or a renovation.
• A top-up to pension saving for someone who wants flexibility.
• Separate saving for children or a family goal, managed apart from the current account.
• A further channel for someone who has already used up the study fund.

08Withdrawal: what to know

In an investment provident fund you can withdraw at any time, but in most cases the tax rules on the gain will apply. At retirement age and in certain conditions there are reliefs, set out on the authority's site. Before withdrawing, ask the provider for a calculation of the tax and the net amount, and check whether a partial withdrawal is better. The aim is not to find out the details after the money has already gone.

For a comparison of an investment provident fund and a study fund, see Study fund, provident fund or regular saving, and for lowering costs see How to lower management fees.

09How to open one, step by step

1. 1

   Define a goal and a horizon

   What you are saving for and when you may need the money.

2. 2

   Compare on Gemel Net

   Compare fees, tracks and return over time across several funds.

3. 3

   Choose a track

   By the horizon and the risk you are comfortable with, not only by past return.

4. 4

   Ask for the withdrawal terms

   Check the process and the costs in advance, and get them in writing.

5. 5

   Set a regular deposit

   A monthly standing order builds the habit and removes the need to decide each time.

10Three examples of use

11Common mistakes

• Choosing a fund by one year's return.
• Comparing different tracks and concluding one fund is expensive.
• Not checking tax before withdrawing.
• Opening several small funds and forgetting them, each with its own fee.

12How to read the fund's statement

13Merging funds

Someone who opened several funds over the years pays each one's own fee. Merging similar funds can cut costs and simplify tracking, but first check the terms of the transfer, including tax and any special terms that apply to each fund. Get the exact details from the provider and the authority.

14Types of track: conservative, general and equity

These are general definitions. In practice each provider and track has its own rules and composition, so check the detail on Gemel Net and in the fund's documents, not only by the name.

15A fixed monthly deposit: what it gives and what it does not

A regular deposit is a convenient habit, but it is important to understand what it gives:

• It creates discipline: the money moves before you reach the spending.
• It spreads your entry points into the market: part of the money goes in on good days and part on bad days. This does not guarantee a return and does not protect against loss.
• It does not replace checking the fee and the track, and both keep affecting every deposit.

A simple illustration: depositing ₪1,000 a month for 10 years is ₪120,000 of deposits, before gains and losses and before fees. What it becomes in practice depends on returns and costs. So run several scenarios in the compound-interest calculator, including a bad one, instead of leaning on a single scenario.

And if you change the amount or stop depositing for a while, write it into the plan. The decision should be deliberate, not the result of a standing order nobody remembered to update.