A study fund is a medium-term savings plan for employees and the self-employed, which makes it possible to save money for any purpose. The fund becomes liquid after six years from the date of its opening.
And it is currently the only medium-term savings plan that also allows you to enjoy tax benefits – making it particularly affordable.
For employees, the usual deposit rate for a study fund is 7.5% of the employee’s salary paid by the employer, with an additional 2.5% set aside from the employee’s salary.
For the self-employed, as of 2020 it is possible to deposit up to 4.5% of the determining annual income up to an annual income ceiling of NIS 264,000.
When can you withdraw the funds and do you pay tax?
After six years the funds can be withdrawn, with the fund and its profits exempt from any tax up to the statutory ceiling when withdrawing the funds. It is important to know that there is no obligation to withdraw the funds after six years. The study fund will be liquid at the end of six years, but you will be able to realize the funds even afterwards, at any time.
As employees, you can realize the amount in the fund for the purpose of professional training already after three years of seniority in the fund. Even upon reaching retirement age the funds can be withdrawn tax-exempt after only three years.
