We can increase the available yield by hundreds of thousands of forints, it is worth hurrying

Since the introduction of the social contribution tax (socho) in July last year, the role of tax-advantaged investment opportunities has significantly increased in value. Because of the new tax introduced by the Orbán government, in addition to the 15 percent interest tax, there is also a 13 percent obligation on interest and other income earned through investment. This increased the public charges to be paid from HUF 15,000 to HUF 28,000 in the case of a HUF 100,000 yield.

Permanent investment accounts (tbsz) and pension savings accounts (nyesz) are exempt from paying these taxes. However, it is important that this also has several conditions, so it is worth being on the lookout.

The number of tbz closed last year with an increase of more than 40,000 units, in the case of nyesz, the stock decreased by 860. Based on the data of the Magyar Nemzeti Bank (MNB), we can say that Hungarians prefer to invest their money for the medium term, they do not want to, or rather cannot plan for the long term.

Dumping takes place in November and December

The numbers also show that the number of tsz increased the most in the last quarter. This is not surprising, since there is regularly a lot of money in December, because one of the most important features of this type of securities account is that it starts with a so-called “cumulative year”, after which no more money can be invested in the given account.

It’s worth reviewing our investment portfolio, because with a good decision you can save tens of thousands, even hundreds of thousands – in the case of a return of one million forints, for example, you can save 280 thousand forints if you keep your money in a permanent investment account for 5 years. In the case of Tbsz, it is worth counting on a 5-year investment, but we are still better off if we keep our saved money there for at least 3 years.

It is worth starting this year

If we open an account before the end of the year, the payment period (or cumulative year) ends on December 31 this year and the 3- or 5-year commitment period begins on January 1, 2025.

After these savings, there is no obligation to pay taxes. We also get personal income tax (PIT) exemption, but at least it provides tax savings, depending on how long we keep the account:

• 10 percent tax must be paid after 3 years,
• And after 5 years, we can be exempted from paying personal income tax.

Social contribution tax does not have to be paid if savers keep their financial assets in a permanent investment account for at least 3 years. The Ministry of the National Economy (NGM) will change this: there will only be a basis for the SOCHO payment obligation on the income obtained with assets held on the tbz, if you do not have to pay sja at all, and in all other cases the extra 13 percent tax must also be paid.

However, tbsz is also an option for a period of less than five years, so it is worth choosing this scheme even if we know that we may need the assets placed there sooner.

There’s still some time

It is worth starting the account in 2024, as the period required to obtain a tax discount or tax exemption will be shorter than if we only opened the account in January 2025, since then the binding period can only start on January 1, 2026.

It is important that an individual can only open one account per year with one service provider. This scheme is worth it for everyone, there is no group of investors or segment for whom it is not worth opening a permanent investment account. The money placed in the account can be invested in various investment funds, stocks and bonds, which include both lower and higher risk ones. This way, everyone can choose what suits their goals and willingness to take risks.