Child Development Accounts in Israel

Child Development Accounts (CDAs) are savings or investment accounts opened for children at birth or at early ages with the goal to promote savings and asset accumulation for long-term development (e.g., education, homeownership, or business development). Beginning in January of 2017, the Israeli government established a universal CDA program called Saving for Every Child Program (SECP), whose goal is to advance long-term asset-building and child development among Israeli households. Under this program, every Israeli child under the age of 18 gets a savings account opened in their name, and government makes monthly contributions in the amount of NIS 50 (approximately $14) to the SECP accounts. In addition, parents can opt to transfer an additional NIS 50 per month from a separate child allowance into their children’s SECP account. Parents can also decide how to allocate their funds, choosing between an array of different investment options ranging from low-risk, low-yield bank accounts to high-risk, high-yield investment accounts. If parents do not make an investment decision in the first six months of the child’s life, children are enrolled in the SECP’s default track.

SPI is partnering with the National Insurance Institute of Israel (NII), which administers the SECP, to analyze program enrollment and participation decisions of Israeli households that qualify for the SECP.