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Retirement Savings Account

 

THINK AHEAD - THINK POSITIVELY

 

Be conscious of your future and choose our Retirement Savings Account with a state subsidy option.

 

Who can benefit from a Retirement Savings Account?

Clients, who

  • are consciously preparing for their retirement;
  • looking for the opportunities to benefit from state subsidy;
  • want to decide freely on when and what amount to pay into their RSA account;
  • look for low risk but high yield investment (the RSA account has a long investment horizon thus the capital market risks is decreased, however the long term investment offers a high yield);
  • strive for transparency: being aware of the cost, an informed decision can be made on the investment options;
  • would use the tax exemption opportunity.

Apply

How can you get state subsidy to your RSA Account?

For annual deposits to the RSA Account, you can apply for a so-called advance saving subsidy in the amount of 20 percent of the amount deposited during the year, but a maximum of HUF 100,000 (where your reach retirement age before 1 January 2020 the maximum redeemable amount is HUF 130,000).

This amount can be redeemed only if you have no past due debt with the tax authority and, in the year of the deposit, you had paid personal income tax in an amount at least equal to the redeemable amount on your income classified into the consolidated tax base and after deducting any tax discount.

If you are a pensioner and you have no income belonging to the consolidated tax base (e.g. salary), you will not be able to redeem the above amount on your deposited money.

 

Example for the level of the advance saving subsidy

 

József, 33 years old1

Ilona, 58 years old1

Number of years before reaching retirement

32 years

7 years

Annual saving for this purpose

HUF 225,000

HUF 500,000,-

Annual advance saving subsidy

HUF 45,0002

HUF 100,0002

Total advance saving subsidy

HUF 1,440,000

HUF 700,000,-

 

What do you need to know about the state subsidy?

The advance savings subsidy is an independent subsidy, i.e. is not part of any other benefits granted for pension savings, which means that it entitles the account holder to further tax allowances even if they are private pension fund members or in addition to a pension insurance; at the same time, the total amount to be transferred by the tax authority cannot exceed HUF 280,000.

This advance saving subsidy can be claimed irrespective of your annual income provided you deposited an amount to your RSA Account in that year and you paid personal income tax at least equivalent to the redeemed amount.

 

What else do you have to know about the RSA Account?

  • You will be exempt from tax payment on the return on your securities saving (apart from dividends) in your RSA Account. This tax exemption can be used if there is a pension purpose withdrawal from your account and your RSA Account was opened at least in the tenth tax year before that payment. Where you hold deposits on your RSA Account, you obviously have to pay interest tax on your interest income but this will be accounted for, deducted, and transferred to the tax authority by our Bank - you have no additional tasks. The account management fee for the RSA Account is HUF 2,000 p.a., plus 0.1% of the average annual balance on your securities account.

 

What you have to know about payments from RSA Accounts?

  • Where you request a pension purpose payment from your RSA Account, i.e. you are already pensioner and already 10 tax years have passed since the account was opened, you can draw your savings tax exempt if you close your RSA Account simultaneously. There is no legal opportunity to withdraw your savings in several batches. If, following the pension service, you wish to deposit your savings in an RSA Account, it is possible subject to opening a new RSA Account and in this case the ten tax year period following the account opening restarts. (In this case the entry value of assets is the bigger out of the usual market value on the termination day or the value of purchase.)
  • Where you request a taxable withdrawal i.e. you are not a pensioner at the time of the withdrawal and/or less than ten tax years have passed since the account opening, the following taxation rules shall apply to your savings:
    • At the time of withdrawal the Bank assesses your saving balance at the daily market rate valid on the day of withdrawal. From the resulting portfolio value we deduct your total deposit and the amount of the advance saving subsidy transferred by NAV (this must be deducted because separate rules apply, to be detailed later on), and we deduct any eventual dividends received. Dividends received for shares in the RSA Account are not exempt from tax and so we deduct them in order to avoid double taxation.
    • Where the amount resulting from the calculations detailed in the previous point is negative then you had no income to be declared in your annual tax return. However, if this amount is positive, then you have taxable income to be declared in your annual tax return and to pay tax at the actual personal income tax rate (currently 15%). This must be done in the tax return following the year of withdrawal. (In the first case, the exit value of the securities stock is the purchase amount of the securities, while it is the market value in the second case.)
    • If you withdrew only part of your RSA Account balance then you have to establish the total income generated on your RSA Account in accordance with the above rules and pay the tax as written in the previous point. At the same time, following this partial withdrawal, we will recognise the remaining savings on the RSA Account as taxed claim, i.e. if you later make a taxable withdrawal, than you don't have to include your already taxed savings in your income generated (to avoid double taxation).
    • Where you make a non-pension purpose service, i.e. the withdrawal from the account takes place before the expiry of three years after opening the account, then, in addition to the above, you have to consider the following:
    • If you claimed and received advance savings subsidy then you have to repay the subsidy you received from NAV plus 20%, also to be included in the tax return of that year and to pay it by the deadline for the tax return.
    • Furthermore, you are not allowed to claim advance savings subsidy to your deposits in the year of withdrawal, but in the next year.
    • If you have opened your RSA Account after 2013, you are already retired and you are requesting payouts after the 3rd tax year but before the 10th tax year, the tax estimation will happen according to the above written points, but in this case you do not need to repay the advance savings subsidy you received earlier and you can apply for advance savings subsidy also in the year of payout.

What kind of investments are on offer?

  • Investment funds
  • Shares listed on the Budapest Stock Exchange
  • Hungarian Government Bonds
  • Mortgage bonds

 

How can you start saving for your retirement?

 

For your attention!

 

Useful documents

 

Should you have any questions in connection with the above, please call UniCredit Phone Banking at +36 (1/20/30/70) 325 3200 or visit our branches where our colleagues will be happy to help.

 

The content of this information is intended to provide information only, and does not constitute an offer, proposal or investment advice. This Guide is provided by UniCredit Bank Hungary Zrt. (Number of activity licence: I-1525/2003., member of the Budapest Stock Exchange) free of charges. The information it contains is based on data presumed to be reliable; however, UniCredit Bank Hungary Zrt. shall under no circumstances be liable for the content, accuracy, or completeness of the data provided, or for any material disadvantage the client may suffer as a consequence of making use of the contents of the Guide.

 

1 Assuming a retirement age of 65

2 Provided that the tax for the consolidated tax base after deducting tax discount reaches this amount.

The National Deposit Insurance Fund protects deposits placed within the amount of 100 000 euro. This protection is valid only for deposits and excludes securities.

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