How Much Interest to Put on a Kids’ Savings Lock
Updated: 16 September 2026 · Yehuda Huri (Oshik team) · A parent guide, not financial advice.
How much interest should you put on the lock?
Allowance deposit interest is not bank interest. The parent funds a simple bonus out of pocket when the lock opens. A starting point: a short lock (two to four weeks) and a bonus you will actually pay, usually ₪1–5 on small sums. Derive the percentage from the bonus, not the other way around. Oshik records it. It does not pay it.
Families using the 3-track system hit this question fast: what to put on the locked share. Zero, and waiting feels pointless. Twenty percent “to make it fun” that you skip on opening day teaches the opposite lesson. The allowance amount itself is a separate choice, in the allowance-by-age guide.
Shekels first, then a percentage
Kids feel currency, not APR. Start with “what can I hand over on Friday when this opens?” and only then compute a period rate. ₪50 locked for a month with a ₪2 bonus is 4% for that month, not 4% a year. Copy a 4% annual bank quote and the bonus on the same sum is agora. That does not teach waiting.
The Bank of Israel’s “Small Money” series for ages 5–10 treats saving and waiting as a habit, not a market rate to copy. At home the bonus is a parent-funded prize for waiting, not a deposit product.
Starting table (not a price list)
These ranges are a conversation starter. They are not investment advice and you do not have to match them.
| Situation | Example locked sum | Bonus at maturity | Note |
|---|---|---|---|
| Elementary, two weeks | ₪20 | ₪1 | Visible; costs a coin |
| Elementary, one month | ₪50 | ₪2–3 | The parent can pay without drama |
| Middle school, two months | ₪100 | ₪5 | Still a household bonus, not “yield” |
| Too much | ₪200 | ₪40 (20%) | Only if you will pay it on the day; otherwise don’t |
A cap matters as much as the rate: how much of payday may lock. Without a cap an excited child freezes everything and then asks parents for a snack.
How to set it at home
- Lock length first. Two to four weeks the first time. Put the date on the calendar.
- A bonus you could pay today. If it hurts, lower it. Honoring the promise beats a big number.
- Write three numbers: how much is locked, when it opens, how much extra. The percentage follows.
- Early unlock means no bonus. Otherwise interest becomes a negotiation.
- Pay on the day. Cash or a transfer. The journal only records it. A youth card is not required for this step; if you are comparing payment tools, see youth cards vs a journal.
What this is not
Not bank interest, not a guaranteed deposit, not investment advice, and not the Invest track. Invest is a separate index simulation. This page is only the locked slice of allowance, with a date and a sum the parent puts in from their own pocket.
Frequently asked questions
Who pays interest on a child’s allowance deposit?
The parent. This is not bank interest and not a promised return. You set a simple bonus for the lock period and pay it in cash or a transfer on the day it opens. Oshik only records the number.
How much interest should a kids’ savings lock pay?
Start with a bonus the parent can actually pay: usually ₪1–5 on a small sum locked for two to four weeks. Derive the percentage from that bonus, not the other way around. If you cannot honor it on opening day, the rate is too high.
Should educational interest match a bank rate?
No. Annual bank yield on a few dozen shekels is almost invisible. At home you are teaching waiting, so the bonus should be visible to the child and still small for the parent. It is not a savings product.
Simple interest or compound interest?
For elementary school, simple interest for the lock only: ₪50 locked becomes ₪52 at the end. Compound interest is a conversation with teens, not a first deposit. Skip any formula the parent cannot say out loud.
What if the child wants to unlock early?
Agree in advance: early unlock means no bonus, or a haircut. Otherwise interest becomes a negotiation. Waiting is the lesson, not flexibility.
How does Oshik fit?
The parent sets a rate and term in the journal. The child sees a countdown. On maturity the parent pays outside the app. Oshik is not a bank and does not move money.
Want to practice this in a family journal?
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