Need help to invest (Israel)

amother

OP ↓

Tue, Jul 16 2024, 3:42 am

Single mother with small amount of savings that I want to put somewhere but I can't afford professional advice.

Are there no-risk options that are worthwhile?

amother

Wine

Tue, Jul 16 2024, 3:44 am

hugs and hatzlocha!
no such thing as risk free anything
experts can weigh in but I would put it some savings
find out which is best
in E"Y or elsewhere
lowest risk with as high a rate of return as possible
hope you get good advice

amother

Wheat

Tue, Jul 16 2024, 5:20 am

I'm not familiar with Israeli investments but the things I would start off with are:

1. High Yield Savings account. This is (AFAIK) almost risk free. Most banks should have a place with 5% ROI and you should never have any extra cash in a checking account. All extra money should be here.

2. Mutual funds are a pretty safe part of the investing world - About 10% ROI. It should be a long term investment. Day to day they go up and down but if you leave your money there for 5, 10, or 20 years it will definitely give you a huge return.

3. Large stocks in Huge companies (ex. Amazon, Facebook etc..)

I'm no expert but this is my personal advice.

amother

NeonBlue ↓

Tue, Jul 16 2024, 5:23 am

The first and foremost question is whether you're an American citizen.
There are tax implications for American citizens to invest in Israel.
If so, your options are to either invest in America, or speak with your accountant on their opinions of which kind of investment accounts in Israel are subject to American tax laws.

amother

↑ OP

Tue, Jul 16 2024, 5:48 am

amother NeonBlue wrote:

I am US citizen
Does that mean that a bank savings is a bad idea?

amother

↑ NeonBlue ↓

Tue, Jul 16 2024, 6:10 am

amother OP wrote:

I am US citizen
Does that mean that a bank savings is a bad idea?

Not at all.
We are free to have Israeli bank accounts. You do have to submit your SSN when you open an account because of the tax treaties between America and Israel. You also must file an FBAR yearly if all your accounts, including your pension btw., total over $10K.

But investment accounts are classified as PFICs (Passive Foreign Income) and are therefore subject to tax laws. Again, this is something to discuss with your accountant as opinions may vary. Keren Histalmut, for example, some accountants will say it isn't an PFIC and some say they are. Really best to run this all by a professional.

essie14

Tue, Jul 16 2024, 6:29 am

As NeonBlue said above, you need to speak to a US/Israeli accountant to understand all your tax implications.
This firm is well known and recommended or you can ask around in your neighborhood
https://www.pstein.com/

amother

↑ NeonBlue ↓

Tue, Jul 16 2024, 9:44 am

amother Cherry wrote:

In America a CD is very safe and right now has great guaranteed rates.

One note. These days, a high yield savings account can have almost the same interest rate as a CD, if not more. For me, it's not worth it to lock up my month for a length of time for a few extra dollars.

For example, interest rate on a savings account with Capital One is currently 4.25%.
A 12 month CD is 5% and an 18 month CD is 4.45%. All the other time frames from a 9 month CD all the way up to a 60 month CD is less than 4.25% interests.

amother

↑ Cherry

Tue, Jul 16 2024, 10:09 am

amother NeonBlue wrote:

This is great information thank you. Are they taxed differently?

amother

↑ NeonBlue ↓

Tue, Jul 16 2024, 10:46 am

No. As an American citizen, your American savings account has the same status and tax implications and everyone else's American account.
Additionally, the interest earned on a savings account and a CD are taxed the same.

You can find information on interest rates by google any bank. The trick, however, is to make sure you have an American address as they're usually strict with that.