Long Term Investment Account
Because the Law of Taxation on Personal Income has been changed in January 2010 the OTP Bank can offer you tax free or tax allowanced possibilities on the Long Term Investment Accounts.
On a Long Term Investment Account you can invest Hungarian forint deposits or securities issued in Hungarian forint. These two types of investment must be handled separately in two different accounts:
- Long Term Investment Deposit Account (forint deposits)
- Long Term Investment Securities Account (bonds, shares, investment funds and other securities issued in forint)
To whom do we recommend?
These accounts are recommended mainly to investors
- Who would like to invest on long term (3-5 years) period.
- Who would like to take advantage of paying the half - or does not pay - of the gain on interest or exchange rate tax after transactions or after dividend.
- Who would like to decide on their own about the risk and potential yield of their investment.
- Who wouldn’t like to give up the favorable interest rate of the deposit on long term investment horizon.
Tax allowances and conditions
- The capital incomes realized on Long Term Investment Account from the opening period are tax free if you wait until the end of the fifth year of the investing period.
- You have to pay 10% tax after the yield realized from the opening of the account until the closing, if you close your account after the end of the third year, but before the end of the fifth year of the investing period, or you withdraw certain part of your investments from the account on the end of the third year (you can do it only one day, which is 31st of December).
- You have to pay the normal 20% tax after the yield realized from the opening of the account until the closing, if you close your account before the end of the third year of investing period.
Account opening and maintenance the account
- You can open one Long Term Investment Deposit Account and one Securities Account at one Financial Institutionduring a year.
- You can not move your money between the Long Term Investment Deposit and Securities Account, but you can change the type of investment inside the accounts.
- The account maintenance period is divided into two periods:
- The collection period, (which is from opening the account until the end of the year (31 December)) when you can pay into your account at any time and you can invest your money as well, At the first time when you pay into your account you should pay at least 25.000 forint of sum.
- The investing period is starting on 1st of January after the year of collection period, and lasting 3+2 years. During the investing period you can not pay in to your account.
Money withdrawal or part payment or closing the account
- You can not withdraw a certain part of your money from the account. If you would like to receive money from these accounts, you have to receive your money at all and you have to close your account and the tax after the yield on your investment will be appraised and paid for the yield is realized on the total investment amount from the opening of the account until the closing.
- At the end of the third year of the investing period you can receive a part of your saving, and the rest of the money can be reinvested with the previous conditions so you do not have to close your account. The rest of your invested money must be at least 25.000 forint. You have to ascertain and return your income tax only for the yield of the withdrawn money.
- You can change the portfolio of your investment inside the account, so you can sell your securities and purchase others, but you can not withdraw the money. The realized yield during the collection and investing period can be reinvested. The situation is the same for the deposits as well.
- After the 5 years of investing period you can continue your savings period (3+2 year), but you have to enter into a new contract in the Bank. In this case the new investing period (3+2 years) starts without a collection period.
Further tax rules
- The tax allowances are valid as well in the collection period
- If you do not wait until the tax free period, so you close the account before the end of the fifth year of the investing period or in the collection period you have to ascertain and return your income tax for the yield realized from the opening of the account until the closing on your own, according to the certificate given from the Bank.
On the following homepages and on the homepage of the Issuer you could gather public information about the securities:
- OTP Fund Management
- OTP Funds portfolio report
- OTP Mortgages
- OTP Real Estate Fund
- Hungarian State Debt Management Agency/Államadósság Kezelő Központ (ÁKK)
- Hungarian National Bank/Magyar Nemzeti Bank (MNB)
- Budapest Stock Exchange/Budapesti Értéktőzsde (BÉT)
- Hungarian National Bank publications
- KELER Central Depository Ltd./KELER Központi Értéktár Zrt.