"Long-Term Stash"
Long-term Investments Yield 500 Billion Rubles for Government: Keys to Public Wealth Accumulation
With the commencement of "Operation Special"* and the departure of foreign investors from Russia, the Russian government has been aggressively courting long-term funds from its citizens for the economy. In December 2023, Finance Minister Anton Siluanov outlined a strategy to attract 40 trillion rubles held by citizens. "These are some damn good resources, they can generate income for citizens and serve as a foundation for economic development," Siluanov stated at the time.
Since 2023, the government has been developing and launching various tools to attract long-term funds with terms of five years or more, aiming to spur economic growth in a country where 41% of the 2025 budget gets allocated to defense and law enforcement. As a result, a program for long-term savings through NPFs - investment accounts of the third type, designed for long-term investments, started operating in Russia from January 1, 2024. Additionally, in 2025, a new form of life insurance - a revamped IJS - insurance with an investment component, hit the market, but it hasn't gained widespread popularity yet.
Our calculations indicate that the volume of funds attracted to these long-term savings tools today exceeds 500 billion rubles, filling 1.3% of Siluanov's plan. How did we calculate this?
Saving Long-Term: The Ultimate Guide
Long-Term Savings Program (LTP)
Launch Date: January 1, 2024
Funds Attracted: Over 330 billion rubles, according to the CB
The LTP is a product that, as the CB notes, allows you to create a financial safety net or gain an additional pension supplement. This program is managed by non-state pension funds, with which citizens must sign a contract. Primarily, it's a 15-year pension accumulation program tailored to the current climate.
The initial contribution can be both frozen pension savings from 2014 and new citizen funds, which they can independently replenish. There are aspects of previous state accumulation programs: the state helps fund part of the contributions. You can get assistance from the state by making an annual contribution of at least 2000 rubles to an NPF. Co-funding lasts for 10 years from the date of the initial contribution and could reach 36,000 rubles per year.
Participants in the LTP program can additionally claim a tax deduction for the amount of funds contributed, up to 400,000 rubles. The maximum limit varies between 52,000 to 60,000 rubles, depending on the income tax rate of the individual (13% or 15%). All contributed funds and income from investments are insured up to 2.8 million rubles. After 15 years from the contract date or reaching retirement age, the participant of the LTP can apply for monthly payments - lifelong or for more than ten years.
The Bank of Russia informed us after our inquiry that citizens are willingly opting into this program, as evident by the growing number of contracts with multiple contributions by Russians. Currently, there are approximately 4.6 million contracts in the LTP, and the volume of attracted funds exceeds 330 billion rubles, a forecast that includes the expected size of co-financing and statements about the transfer of pension savings to the program.
Third Type Investment Accounts (IIS-3)
Launch Date: January 1, 2024
Volume of Attracted Funds: over 183 billion rubles, according to the Central Bank
IIS-3 is a new type of investment account offering tax benefits after ten years from the account opening, though it is currently launched in a five-year format. Unlike previous accounts, IIS-3 has no limit on annual contributions. It combines the tax advantages of the abolished IIS-1 and IIS-2 types, allowing investors to claim a tax deduction on both the contributed funds and the income earned.
To receive tax benefits, the investor must not withdraw funds from the account for five years. However, there are certain life situations where early withdrawal is possible while still maintaining the benefits. Moreover, investors can now withdraw dividends from IIS-3 into their bank accounts, and they can convert their old IIS-1 and IIS-2 accounts into new IIS-3 accounts, with the broker counting the term of the old account.
According to the latest data from the Bank of Russia, the value of assets on IIS-3 stands at 183 billion rubles out of 637 billion rubles for all IIS.
Join Life Insurance (JLI)
Launch Date: Spring 2025
Attracted Funds Volume: No less than 2.1 billion rubles, according to Sberbank
Life insurance has a new member called Joint Life Insurance (JLI). Despite being less popular, these insurance companies are endorsing it. However, the final list of associated taxes is still undefined. In mid-May, the Ministry of Finance announced that tax adjustments are in the works and will be submitted to parliament.
The first such product was launched in March on its own license by "SberLife Insurance." According to the senior vice president and head of the wealth management department at Sberbank, Ruslan Vesterovskiy, for this period, over 760 policies have been issued, totalling 2.1 billion rubles.
JLI is an instrument comprising insurance and investment components. The insurance portion will be invested in Russian money market funds (PIFs). The policyholder decides where to invest the investment component. This differs from insurance with an investment component (IZh), where the investment portion is decided by the insurance company. After next year, such products will not be marketed to customers.
The main issue with JLI is the term of the insurance contract required to obtain tax benefits. Discussions are underway regarding variants ranging from five to ten years.
The Amount of Money
If you sum up the growth of funds in the LTP, LIS-3, and other similar instruments, the total amounts to over 515 billion rubles. While this seems significant, it falls far short of Russia's objectives. Putin has set the goal of increasing capital market size to 2030, with a minimum requirement of 23 trillion rubles, primarily sourced from Russian households, reminds Aleksei Timofeev, president of the National Academy of Financial Management.
Despite this relatively small amount, Russia's efforts signal a growing interest in long-term financial planning, as citizens face ongoing economic instability due to geopolitical tensions and economic fluctuations.
*In compliance with Roskomnadzor's requirement, all Russian media must use information from official Russian sources when preparing materials about the "special operation in eastern Ukraine." We cannot publish materials that describe the operation as an "attack," "invasion," or "declaration of war" unless it constitutes a direct quote (Article 57 of the Law on Mass Media). Violation of this rule may result in a fine of 5 million rubles and possible blocking of the publication.
- To better their personal-finance situation and contribute to the Russian economy, citizens are utilizing long-term savings tools such as the Long-Term Savings Program (LTP) and Third Type Investment Accounts (IIS-3), which have collectively attracted over 515 billion rubles in funds.
- As part of a larger investment strategy, individuals are also exploring life insurance options, including the newly introduced Joint Life Insurance (JLI), with an aim to build wealth and secure their financial future amid economic instability and geopolitical tensions in Russia.
