Enter your savings goal, existing savings, expected annual return, and time horizon to find the monthly contribution needed to hit your target.
Monthly contribution needed
—
Total contributed
—
Estimated returns
—
Your breakdown
Updates live as you type
Item
Amount
How the monthly contribution is calculated
The calculator works in two steps. First it computes the future value of your current savings by compounding them forward at the monthly rate (annual rate divided by 12) over all months in your horizon. If that future value already equals or exceeds your goal, no additional contributions are required. Otherwise the gap between your goal and the future value of current savings is the shortfall your monthly deposits must close. Applying the PMT formula to that shortfall gives the level monthly deposit that, reinvested each month at the same rate, exactly reaches the goal by the deadline. Total contributed is the sum of all monthly deposits over the period, and estimated returns is the difference between the goal and the sum of current savings plus total contributions.
What return rate should you use in Israel?
For money held in a Keren Hishtalmut or a pension fund invested in a default balanced track, a nominal annual return of 4% to 6% is a reasonable planning assumption based on historical multi-asset fund performance in Israel. For money in a bank deposit or Makam (short-term Treasury bill), 3% to 4.5% reflects the Bank of Israel policy rate environment as of 2025 to 2026. For a globally diversified equity portfolio held in a taxable account, 6% to 8% in nominal terms is a common long-range assumption, though actual returns are highly variable. Because this calculator does not account for inflation, tax on gains, or management fees, you should reduce the return input by at least 0.5% to 1% to allow for these real-world frictions. A conservative planning rate of 4% to 5% is appropriate for most medium-term goals in Israel.
Saving for a housing deposit in Israel
One of the most common uses for this calculator in Israel is planning a Mazal Tov (down payment) for a first home. Mortgage rules in Israel generally require a minimum down payment of 25% of the purchase price for a first property, and 30% to 40% for subsequent properties or investor purchases. With average apartment prices in Tel Aviv and central Israel exceeding 2.5 million ILS, the required deposit often falls between 625,000 ILS and 1 million ILS. First-time buyers may be eligible for a Minhelet purchase lottery (Mechir Lemishtaken) offering below-market prices, which can reduce the required deposit. Regardless of the purchase route, starting a dedicated savings plan early, ideally inside a Keren Hishtalmut or a designated provident fund, significantly reduces the monthly contribution needed compared to starting close to the target date.
Savings goal planning alongside mandatory pension in Israel
Since the Mandatory Pension Law came into effect, all Israeli employers must contribute at least 6.5% of salary to a pension fund on behalf of each employee, with the employee contributing a further 6%. This means a portion of long-term savings is already happening automatically for salaried workers. When planning a supplemental savings goal such as early retirement, a study fund for children, or a property purchase, you should treat your pension accumulation as a separate stream and use this calculator only for the additional goal. The Keren Hishtalmut, which matures after six years and can be withdrawn tax-free, is the natural complement to the locked-in pension for medium-term goals. Combining mandatory pension contributions with a disciplined Keren Hishtalmut strategy and a supplemental voluntary savings plan gives most Israeli employees a robust three-pillar savings structure.
Frequently asked questions
How do I calculate how much I need to save each month to reach a financial goal in Israel?
The standard approach uses the PMT (payment) formula from time-value-of-money mathematics. First, take your current savings and compound them forward to the end of your horizon at your expected annual return rate, converting the annual rate to a monthly rate by dividing by 12. The result tells you how much your existing pot will be worth on its own by the target date. Subtract that future value from your savings goal to find the shortfall that new contributions must cover. Then apply the annuity PMT formula: multiply the shortfall by the monthly rate, and divide by the quantity (one plus the monthly rate raised to the power of the number of months, minus one). The result is the fixed monthly deposit that, reinvested each month at the same rate, exactly closes the shortfall. If your existing savings already grow past the goal on their own, no further contributions are needed. In Israel, the most common context for this calculation is saving for a housing deposit, an education fund, or a retirement supplement alongside mandatory pension savings.
What tax-advantaged savings accounts exist for Israeli residents?
Israeli residents have access to several savings vehicles that carry meaningful tax advantages. The Keren Hishtalmut (study fund) is one of the most important: employee contributions up to a ceiling are exempt from income tax on withdrawal after six years, and employer contributions up to the ceiling are also exempt from tax. This makes the Keren Hishtalmut effectively a tax-free savings account when used correctly. Pension funds (Kranot Pensia) are mandatory for employed workers under the Mandatory Pension Law and carry tax deductions on contributions of up to 7% of salary, with the employer contributing an additional 6.5%. Provident funds (Kuppot Gemel) are voluntary savings plans with tax benefits on long-term locked savings. Savings deposits at Israeli banks (Pkadonot) earn interest taxed at 15% or 25% depending on the instrument. For most employed Israelis, maximizing Keren Hishtalmut contributions before opening a taxable savings account is the most tax-efficient path to a medium-term financial goal. This calculator does not model the tax effects of any specific account type, so you should factor in your personal tax bracket and applicable exemptions when evaluating expected returns.
Is the Keren Hishtalmut the best savings vehicle in Israel?
For most Israeli salaried employees, the Keren Hishtalmut is widely regarded as one of the most attractive savings tools available, but whether it is the best option depends on your individual circumstances. The main advantage is that contributions grow completely tax-free for six years, and after six years both the principal and accumulated returns can be withdrawn without income tax. Employer contributions up to the statutory ceiling are excluded from the employee’s taxable income entirely. For a typical employee in a 31% to 47% income tax bracket, the tax saving on employer contributions alone can be substantial. However, the Keren Hishtalmut has a contribution ceiling (which varies by salary), so it cannot absorb unlimited savings. Beyond the ceiling, money must go into a taxable brokerage account, a Kuppat Gemel, or a bank deposit, all of which face capital gains tax of 25% on real gains. For short-term goals of less than six years, the Keren Hishtalmut is illiquid without penalty, making it unsuitable. For goals aligned with the six-year horizon, it is hard to beat in the Israeli context. Consult a licensed Yoetz Pensioni (pension advisor) for a recommendation specific to your salary level and goal timeline.
How does the employer match on Keren Hishtalmut improve my savings rate?
The employer contribution to the Keren Hishtalmut is one of the most powerful elements of the Israeli savings system. Under typical employment agreements, the employer contributes 7.5% of the employee’s monthly salary into the fund (up to the statutory ceiling), while the employee contributes 2.5%. Crucially, the employer’s contribution is excluded from the employee’s taxable income up to the ceiling, which means it represents pure additional compensation that is never subject to income tax, Bituach Leumi, or health tax. From a savings rate perspective, the employer match means that for every 2.5 ILS you contribute, you receive an additional 7.5 ILS from your employer, effectively tripling your contribution before any investment return. On top of that, the combined 10% contribution grows tax-free inside the fund for six years. The compounding effect of tax-free growth on a higher initial contribution base makes the Keren Hishtalmut significantly more valuable than a straightforward calculation of your own contributions alone would suggest. When modeling your savings goal, you should add the expected Keren Hishtalmut balance at your target date as an offset against the goal, potentially reducing the additional monthly savings this calculator asks you to make.