Balloon· Bullet
You pay only interest during the term, with the full principal due in a single payment at the end. Suits special situations like waiting for a windfall.
~/glossary // 47 terms
Financial
Glossary.
Every concept you need to know — pensions, investing, taxes, mortgages and freelancers — short and in plain English. Each term links to the full guide.
47 terms15 letters
B
05 termsBonds
A loan you make to a government or company in exchange for fixed interest. Less volatile than stocks, also lower returns. A stabilizing anchor in a portfolio.
Budget Calculator
Monthly budget planning by the 50/30/20 rule (needs/wants/savings) or a custom split. Helps spot a deficit.
Budgetary Pension
A monthly pension paid from the employer's budget (mainly government and military), as opposed to a funded pension invested in a fund.
Building an Investment Portfolio
Planning the allocation between stocks, bonds and cash based on age, goals and risk tolerance. Rule of thumb: stocks % = 110 minus your age.
C
03 termsCompound Interest
A phenomenon where your gains generate gains of their own — a snowball effect. The strongest force in long-term investing.
Compound Interest Calculator
Calculates how much you'll accumulate over time with an initial deposit + monthly contributions + annual return. See the power of time visually.
CPI-Linked· Index-Linked Mortgage
Fixed interest, but the principal balance is linked to the consumer price index. Low base rate — but risk if inflation runs hot.
E
01 termsEqual Principal
Repayment method where the principal decreases at a constant rate. Payments start high and drop over time. Significantly saves on total interest.
F
02 termsForm 101· Tofes 101
The form filled at the start of a year and at every job change — declares credit points, deductions and additional income. Wrong filling = extra tax.
Form 106· Tofes 106
Annual summary of your payslip. Includes total gross salary, income tax paid, national insurance. The basis for any tax refund claim.
G
03 termsGrace
Deferral of payments (principal + interest) for a specified period. Interest continues to accrue on the principal.
Green Invoice· Heshbonit Yeruka
Digital invoice with real-time Tax Authority approval. Mandatory for every self-employed business since 2024. Invoice number issued in advance — no skipping.
Gross to Net
The transition from pre-deduction salary to what actually hits your account. A 20-30% gap is normal — depends on income and pension contributions.
H
01 termsHow to Choose a Pension Fund
The criteria: low management fees, 5-year returns (not 1-year), investment track matching your age, and fund size (more savers = more solidarity).
I
04 termsIncome Tax Calculator
Tax computation by 2026 brackets, credit points, recognized deductions and surtax. Result: monthly and annual tax + effective rate.
Index Funds· ETFs
A fund that tracks an index (like the S&P 500) — no manager picking stocks. Very low fees (0.03%-0.3%).
Inflation Calculator
Shows what your money will be worth in the future after inflation erodes its purchasing power. Illustrates why cash loses value.
Investing for Beginners
First steps: make sure you have an emergency fund, open an account at an investment house, start simple (one broad index fund + monthly DCA).
L
02 termsLazy Investing· Passive Investing
Buy one or two broad index funds on a steady schedule, rebalance once a year, don't check every day. Beats most active managers over the long run.
Low Management Fees
Fees below half the legal maximum: up to 1.5% on contributions and 0.2% on accumulated balance count as low for Israeli pension and study funds.
M
04 termsManagement Fees
What pension, study and provident funds charge you every year. The gap between 0.5% and 1.5% adds up to a fortune over 30 years.
Managers Insurance· Bituach Menahalim
Older Israeli pension product that bundles insurance components. Typically more expensive than a comprehensive pension fund — check whether you should switch.
Money Market Fund
A mutual fund investing in short-term Israeli government deposits and bonds. Liquid within one day, yield tracks the Bank of Israel rate.
Mortgage Calculator
Tool for calculating monthly payment, total interest and amortization schedule based on amount, rate and term. Supports 8 mortgage tracks.
N
01 termsNet Salary Calculator
Gross → net calculator with all deductions — income tax, national insurance, health, pension and study fund.
O
03 termsOpening an Investment Account
Process for opening an account at an investment house (usually much cheaper than a bank). Digital ID + online signature, active within a few days.
Osek Mursheh· Authorized Dealer
A business that charges 18% VAT and offsets on expenses. Bi-monthly or monthly filing. Requires organized bookkeeping — usually an accountant.
Osek Patur· Exempt Dealer
Small business with annual turnover up to ~₪120K (2026). Exempt from VAT and from filings — but cannot offset input VAT. Annual filing only.
P
04 termsPension Fees Calculator
Compares total savings under two management-fee scenarios. Shows how much money "evaporates" over the years.
Pension Management Fees
The fee your pension fund charges — on contributions (up to 6%) and on accumulated balance (up to 0.5%). Cutting 0.5% = hundreds of thousands of ILS by retirement.
Pension Withdrawal
Withdrawing before retirement age triggers 35% tax. After retirement — monthly pension (tax-free up to a ceiling) or lump-sum withdrawal under certain conditions.
Prime Rate
Track linked to the Bank of Israel rate plus a margin. The payment changes when rates rise or fall. The most flexible — no prepayment fee.
R
02 termsRetirement Planning
The process of calculating how much you'll need at retirement, building your savings toward it, and choosing when to retire to maximize your pension.
Robo-Advisor
Automated portfolio management service — an algorithm picks the allocation and rebalances. Low cost, simple to use.
S
07 termsS&P 500
Index of the 500 largest US public companies. The global benchmark for the stock market. Historical return: ~10% annual before inflation.
Savings Policy
Investment product from insurance companies with tax benefits after 15 years. Relatively high management fees — worth negotiating.
Severance Pay
One month's salary per year worked. Tax-exempt up to a ceiling (~₪13,750/year in 2026), beyond that marginal tax. Section 14 releases the part already in your pension fund.
Spitzer· Spitzer Track
A common amortization method where the monthly payment is fixed. Easy to budget, but early on most of the payment goes to interest rather than principal.
Study Fund· Hishtalmut Fund · Keren Hishtalmut
Israel's most rewarding tax benefit — a 6-year savings vehicle with full capital gains exemption. Employees: 2.5% + 7.5% of salary.
Study Fund for Self-Employed· Hishtalmut Fund for Freelancers
Israeli savings product for freelancers with a double tax benefit: deduction on part of the contribution + full capital gains tax exemption after 6 years.
Study Fund Loan· Loan from Hishtalmut
You can borrow against the study fund at a relatively low rate, without disrupting your savings or triggering tax.
T
05 termsTax Brackets· Income Tax
7 Israeli income tax brackets (10%-50%) — marginal, not average. Plus a 3% surtax above ~₪721K annually.
Tax Coordination· Teum Mas
Filing with the Tax Authority to prevent maximum withholding when you work at more than one job. Saves an average of ₪3,400/year, free, 10 minutes online.
Tax Credit Points· Nekudot Zikuy
Direct reduction in tax. One point ≈ ₪239/month (2026). Israeli residents get 2.25 automatically, new immigrants and parents get additional points.
Tax Refund
A claim to the Tax Authority for tax paid in excess. You can claim back 6 years. Common reasons: partial-year work, job changes, unused credit points.
Tax Refund Simulator
Quick tool to check if you're owed a tax refund — based on family status, credit points, and work conditions. Result in 90 seconds.