What Is Gemel Yeladim?
גמל ילדים (Gemel Yeladim) is a government-sponsored long-term savings program for every child in Israel. Launched in 2017, it replaced the previous system of higher cash child allowances with a model that combines a smaller cash payment with an automatic investment account for each child.
The idea is simple: instead of giving parents cash that gets absorbed into daily expenses, the government deposits money directly into a managed investment account in the child's name. The money grows over the child's entire childhood and becomes available at age 18, giving young adults a financial head start.
How does Gemel Yeladim work?
Every child registered in Israel automatically receives a Gemel Yeladim account. Here is how the contributions flow:
- Base government deposit: ביטוח לאומי (Bituach Leumi) deposits NIS 58 per month per child automatically (2026 figure; the amount is CPI-indexed and has risen from the NIS 50 launch level in 2017). This happens whether you do anything or not.
- Parent top-up option: You can instruct Bituach Leumi to divert an additional NIS 58 per month from your child allowance (Kitzvat Yeladim) into the account. This top-up comes out of the allowance you already receive; there is no separate government-matched deposit on top of it.
- Total with the top-up: NIS 58 (base government deposit) + NIS 58 (your contribution diverted from the allowance) = NIS 116/month flowing into your child's account.
The parent top-up doubles the monthly amount going into the savings account, from NIS 58 to NIS 116. The trade-off is that the extra NIS 58 is diverted from the cash child allowance you would otherwise receive, so weigh that against your current cash-flow needs.
How do you choose a fund manager?
When the account is first created, Bituach Leumi assigns a default fund manager. You are not stuck with this choice. There are over a dozen licensed fund managers offering Gemel Yeladim accounts, and you can switch at any time without penalty.
The key factors to compare when choosing a fund manager:
- Management fees (Dmei Nihul): These are the annual fees charged on your balance and on new deposits. Even small differences in fees compound significantly over 18 years. Look for managers charging below 0.5% on the balance and below 2% on deposits. Some of the lowest-cost managers charge as little as 0.2% on the balance.
- Historical performance: While past performance does not guarantee future results, consistently underperforming managers should be avoided. Compare returns over 3-year and 5-year periods where available.
- Investment track selection: Different managers offer different track options. Ensure your preferred manager offers the track you want.
Which investment track should you choose?
Each fund manager offers multiple investment tracks, called מסלול השקעה (Maslul Hashka'a). The main categories are:
- Stock-heavy (Maniati): 50-80% equities. Highest expected returns over 18 years but with more short-term volatility. Often used for younger children who have a long time horizon.
- Balanced (General / Klali): A mix of stocks and bonds, typically 30-50% equities. Moderate risk and return. The default track for most managers.
- Conservative (Agai / Bond-focused): Mostly government and corporate bonds with minimal equity exposure. Lower volatility but significantly lower expected returns over long periods. May make sense only in the last 2-3 years before withdrawal at 18.
- Halacha-compliant (Maslul Halacha): An investment track that follows Jewish law regarding interest and permitted investments. Available from several managers.
For a newborn or young child, a stock-heavy track has historically produced higher long-term returns. With 15-18 years of investment horizon, short-term market drops have time to recover. The difference between a stock-heavy and conservative track over 18 years can be tens of thousands of shekels.
When can the money be withdrawn?
The account matures when the child turns 18. At that point, the now-adult child can:
- Withdraw the full balance as a lump sum. There are no restrictions on how the money is used. It can fund university, a gap year, a car, or further investment.
- Keep the money invested in the Gemel Yeladim account. The money continues to grow under the same conditions but no new government deposits are made.
- Roll into another savings vehicle such as a regular Kupat Gemel or Keren Hishtalmut (if employed).
Early withdrawal before age 18 is generally not permitted except in special circumstances (severe illness, death of a parent). The lock-up is by design, ensuring the savings reach the child.
How do you check and change your fund?
Follow these steps to review your children's Gemel Yeladim accounts:
- Log into Bituach Leumi: Use the Bituach Leumi website or app with your Israeli ID and password.
- Find the Gemel Yeladim section: Navigate to "Children's Savings" (Chisachon Yeladim) in the menu.
- Review current status: You will see each child's account, the current fund manager, investment track, balance, and whether the parent top-up is active.
- Make changes: You can switch fund managers, change investment tracks, and activate or deactivate the parent top-up. Changes are processed within 1-2 months.
You can also call Bituach Leumi at *6050, but the website is faster and available in English for most functions.
How do you compare fund performance?
The Gemel Net website (gemelnet.mof.gov.il), operated by the Ministry of Finance, publishes performance data for all provident funds including Gemel Yeladim. You can compare:
- Annual returns by track type across all managers
- Fee structures (management fees on deposits and on balance)
- Total accumulated returns over 3-year and 5-year periods
Focus on the combination of low fees and strong long-term returns. A fund that charges 0.2% fees with 8% average annual returns will beat a fund charging 1.0% fees with the same gross return by tens of thousands of shekels over 18 years.
Practical Tips for Olim
- Decide on the top-up early: If you want the parent top-up, activate it soon after your children's accounts are created. Each month of delay is a month the extra NIS 58 was not invested, though it does come out of your cash child allowance.
- Stock tracks for young children: With a full 15-18 year horizon, the stock-heavy track has historically outperformed by a wide margin.
- Consider switching to conservative near age 18: When your child is 15-16, think about shifting to a balanced or conservative track to protect accumulated gains before withdrawal.
- Do not forget about older children: If you made aliyah with teenagers, their accounts have a shorter investment horizon. A balanced track may be more appropriate than an aggressive one.
- Review annually: Set a yearly reminder to check performance and fees. Fund managers occasionally change their fee structures.
Gemel Yeladim (Chisachon LeChol Yeled) is an automatic government investment account opened for every child in Israel. As of 2026 Bituach Leumi deposits NIS 58 per month per child (the amount is CPI-indexed and started at NIS 50 when the program launched in 2017). You can divert an additional NIS 58 per month from your child allowance into the account, which brings the total to NIS 116 per month; this top-up comes out of the cash allowance and there is no separate government-matched deposit. You choose the fund manager and investment track and can switch either at any time without penalty; a stock-heavy track suits young children with a long horizon, while a balanced or conservative track suits a child close to 18. The money becomes available as a lump sum when the child turns 18, with no restriction on how it is used.
As of 2026, Bituach Leumi automatically deposits NIS 58 per month per child. This figure is indexed to the Consumer Price Index and has risen from the NIS 50 launch level in 2017. The base deposit happens regardless of family income or whether the parents take any action.
You can instruct Bituach Leumi to divert an additional NIS 58 per month from your child allowance (Kitzvat Yeladim) into the account. Combined with the NIS 58 base government deposit, that brings NIS 116 per month into the account (58 + 58). The top-up doubles the monthly amount being saved, but the extra NIS 58 is diverted from the cash child allowance you would otherwise receive; there is no separate government-matched deposit on top of it.
The account matures when the child turns 18. At that point the now-adult child can withdraw the full balance as a lump sum with no restriction on how it is used, keep the money invested without further government deposits, or roll it into another savings vehicle. Withdrawal before age 18 is generally not permitted except in special circumstances such as severe illness or the death of a parent.
For a newborn or young child with a 15 to 18 year horizon, a stock-heavy (Maniati) track has historically produced the highest long-term returns, and short-term market drops have time to recover. A balanced (Klali) track mixes stocks and bonds for moderate risk and is the default for most managers. A conservative bond-focused track lowers volatility but also lowers expected returns, so it is usually considered only in the final years before withdrawal. The right choice depends on the time horizon and the family risk tolerance.
A US 529 plan is voluntary, funded entirely by parents, and restricted to education, while Gemel Yeladim is automatic, partly government-funded (the base NIS 58 per month comes from the government), and unrestricted at 18. A UK Junior ISA lets parents save up to 9,000 GBP per year tax-free (the 2026/27 limit) but also carries no government deposit. Both JISA and Gemel Yeladim give access at 18. Gemel Yeladim is more paternalistic but more generous to lower-income families because the base government deposit does not depend on parental income or action.
