The Long-Term Investment Account, abbreviated as TBSZ, is one of the best savings tools for stock investments and all other instruments in Hungary. No one likes to pay unnecessary taxes, and since reducing costs is the easiest way to increase returns, why wouldn't you do it? In this article, we will review the most important things to know about the TBSZ account. In addition to the usual theoretical foundations, I will also cover practical experiences. Let's get started!
💡Where you see the 📌 sign, I am describing what happened based on my practical experience, because I find this much more realistic than the many theoretical concepts that you can actually find on the internet.
🧮What is a TBSZ or long-term investment account?
The TBSZ account is a Hungarian specialty; this savings option does not exist abroad, but other savings accounts, such as the English ISA, do. The point of a long-term investment account is that you can save taxes with it, in practice you can reduce it or avoid it completely. There are basically two types of TBSZ accounts:
- 🏛️TBSZ deposit account for bank deposits (also called TBBSZ)
- 📈TBSZ investment account for securities
They work the same except for their names. Naturally, if you buy a stock, bond, ETF, or other instrument, it will be transferred to the latter. You don't have to create these, the service provider will open one for you when you request it. I won't even differentiate between the two from now on, we'll stick with the term TBSZ or long-term investment account.
📌In practice: I opened my first TBSZ account in 2020 and since then I have had about 4 more with 2 providers, but it wouldn't be surprising if there were 10. Why? Because if the account matures in 5 years and I open a new one every year, I can withdraw immediately every year and thus spread my wealth, I will always have free cash. This year, out of a sense of adventure, I might open another one with a third provider, but if not, then definitely in 2026. 5+1 years seems like a long time at first, but the thing is, you can divide and spread your money quite well.
🔒How does TBSZ work?
The basic concept of the TBSZ is very simple: it encourages savers to save continuously for at least 3, but preferably 5, years, or not to touch their savings. This aims to build a kind of positive financial behavior among the population. Since you usually buy stocks and securities in general for the long term, it makes sense to do this within a TBSZ account. The operation of TBSZ accounts is usually depicted on a timeline, so I borrowed the diagram of the now-defunct broker, Random Capital, for the appropriate illustration.
The diagram shows the operating stages of the TBSZ. The first is the collection year, at which time you must deposit the appropriate amount into the account. In subsequent years, no further payments can be made, but you can of course open a new TBSZ account.
💡Regarding the TBSZ, the legislator thought in terms of the calendar year, meaning that the collection year ends on December 31st, and on the first day of the following year, a new TBSZ account can be opened, with a new collection year. It follows that since a service provider can open a new TBSZ account every year, the amount of money intended for investment can be divided.
For example, by opening 5 TBSZ accounts with two service providers for 5 years with an amount of 5000 USD, you can divide the original amount into 10 equal parts, which is exactly what I mentioned earlier.
I usually read 2 opinions regarding the TBSZ account:
- 😭It's not worth depositing the money at the beginning of the collection year, because it's still "liquid" and the term won't increase.
- 😄It's worth depositing the money at the beginning of the collection year, because then these amounts will also be exempt from tax liability, a good 5 years later, at the moment of dissolution.
I think it's a matter of perspective, you can look at it anyway, you can achieve tax-free profit for 1 more year, and also that if you invest money at the beginning of the collection year, it will not be liquid for 1 more year. This mainly depends on what your goal is, at first I chose the former, because I didn't need the amount of money invested. I think that anyone who needs it before 5 years and has to open the account for some reason will not suffer a big loss, at most they will pay taxes on their profits in the same way as they would have done otherwise.
📌In practice: Over the years, I have gotten used to choosing the first option, which is to keep my money liquid, and then when I see a good opportunity, I deposit a larger amount to Interactive Brokers and take the position. I can do this because I use a Wise account, the account balance of which can be read directly by the IB, meaning the money arrives in the broker account very quickly. In the past, it was incredibly cheap to top up large amounts, unfortunately since then all kinds of taxes have been imposed on it in Hungary, but this does not affect foreigners, i.e. non-Hungarian tax residents.
⏳The 3 and 2 year cycle
The division is important because once the collection year is over, the amount of money transferred to the TBSZ account cannot be withdrawn without breaking the account. You can do anything with it within the account, buy and sell, exchange currency, etc., but the amount of money cannot leave the account. This is very important because, in the standard case, you have to pay 15% personal income tax on the return on securities, which decreases to 10% after three years and to 0% after five years, meaning it becomes tax-free. If you close the account more than 3 years ago, then:
- 💸You will have to pay the usual 15% personal income tax
- 💸From January 2025, an additional 13% SZOCHO
This also requires correcting the above in the following way:
- 💰Anyone who breaks it within 3 years will have to pay 13% SZOCHO
- 💰Anyone who breaks it within 3-5 years will have to pay 8% SZOCHO
- 💰After 5 years, the SZOCHO will decrease to 0%.
The situation of dividend-paying stocks is a bit special, because in the case of US stocks, the state withholds the tax, this is the withholding tax, the rate of which is 15%, which is practically equivalent to our personal income tax, with the difference that the amount is not even credited to the TBSZ accounts.
😭Since January 2024, when the double taxation agreement with the USA expired, the withholding tax rate has increased to 30%.
Naturally, the TBSZ account cannot provide protection against such foreign taxes either. Of course, the 13% SZOCHO, +5% additional withholding tax on the Hungarian side will also be imposed on the dividend. So,
💸Withholding tax:
- ❌with whom Hungary does not have a double taxation agreement: 15% Hungarian personal income tax + the country's own tax (30% in the case of the USA)
- ✅with whom Hungary has a double taxation agreement: variable, see: Dividend Taxation in Hungary – What to Watch Out for in 2025
💸SOCHO:
- ❌with whom Hungary does not have a double taxation agreement: 13% SZOCHO+5% tax
- ✅with whom Hungary has a double taxation agreement: 13% SZOCHO
📌In practice: since I had/have a TBSZ account before and after 2024, and I had/have a lot of dividend-paying stocks, I followed the changes. Currently, it is not worth even keeping American dividend-paying stocks in a TBSZ account, since the tax rate is at least 30%, but can be as high as 48% (30+13+5)! On the other hand, companies that do not earn their income in the USA or are not American companies at all do not have to pay their dividends into a TBSZ account, they are only subject to withholding tax, such as Philip Morris (PM). In England, the withholding tax is 0%, and there is no withholding tax here, so dividends on the TBSZ account are completely tax-free. I have also analyzed such companies, you can read the articles here:
- Diageo Stock Analysis (DEO) – An Aging Party Face?
- Games Workshop share analysis (LSE:GAW) – You know the figure!
🔍Opening a TBSZ account: how does it work?
It depends on the service provider where you can open this type of account. In the case of large banks, it is almost everywhere, but with brokers, the situation is not so simple. Where there is definitely a TBSZ account, those are the following service providers, but there are obviously others:
- Equilor
- LightYear (covered by Estonian Deposit Insurance Fund)
- Erste Invest (broker of Erste Bank)
- K&H Securities (broker of K&H Bank)
- Moon fund manager
- Interactive Brokers (through its Irish subsidiary, covered by the Irish Deposit Insurance Fund)
- Concorde Fund Manager
- Partner Bank AG (Austria, covered by the Austrian insurance fund)
📌In practice: In addition to the above, almost all banks in Hungary offer such services, but since I would never recommend any bank fund to you, I have only listed those that have brokerage services. Of the above, Concorde and Hold are fund managers, but they also have money management services, they are closer to brokers than to banks (they do not have a lending leg). Of the above, I have accounts with Interactive Brokers and Erste, I am familiar with them, but I am also planning to open another one with LightYear.
💡Partner Bank AG also offers TBSZ account opening, but only through partners, and the Inwestmentor service provider also invests through them. The TBSZ account of Partner Bank AG is interesting because they are subject to the rules of Austrian deposit insurance, which are largely the same as the Hungarian one. In contrast to the case of Interactive Brokers and LightYear, where instead of the EUR 100 protection, only EUR 20 applies to cash, while papers are kept separately, written in names (which is not entirely true, but let's not get into that now).
🧩Other rules regarding the TBSZ account
In connection with the above, I would like to address two things. Anyone who wants to diversify their assets abroad, except for the above cases, will lose the TBSZ account option. This can be resolved if a foreign broker registers a Hungarian subsidiary, as Interactive Brokers did in 2022, and then went to Ireland two years later.
In addition to the normal account, 1 TBSZ account can be opened per service provider per year, in which case part or all of the amount in the normal account will be transferred to the TBSZ account. From practical experience, I say that you should transfer at least 25 thousand HUF, otherwise what will happen is that the TBSZ account will be opened, but the broker will not make it available to you, so the amount will "float in nothing".
Once the money is in the account, you can do anything with it, buy or sell securities, exchange currencies, and so on, but you can't withdraw the money without breaking into the account. There is one thing you can do, however: you can transfer your TBSZ account to another service provider, but this has a pretty hefty fee.
💰What is worth putting into a TBSZ account and what is not?
There are some assets that are not worth placing on a TBSZ account, let's start with these:
- liquid assets: This is typically money sitting in bank deposits or an equivalent financial instrument. Since the point of this is to be able to access it quickly, I would not put this in a TBSZ account.
- Hungarian government securities: Since account management at the state treasury is free of charge and the interest on Hungarian government securities is tax-free, there is no reason to deposit them into a TBSZ account.
- currency: People typically exchange foreign currency because they are going on vacation or want to protect themselves against FX risks. It is becoming more common for people to pay in foreign currency online, so in this case I would not put this amount of money in a TBSZ account. If the goal is to achieve a long-term exchange rate gain, i.e. the exchange sequence will be HUF-foreign currency-HUF, then this will also appear as taxable profit, and here I see more sense in the TBSZ account.
- emergency reserve: Although this is not so much a stock investment issue, it is worth keeping the money needed for 3-6 months of living outside of TBSZ accounts, in some kind of money substitute, such as a short-term bond like the Discount Treasury Note.
📌In practice: In reality, there is an exception when you absolutely must hold a liquid asset. This includes foreign currency generated within the TBSZ account, for example in the form of dividends, or if you transfer foreign currency to the TBSZ account out of the blue, for example because currency exchange at the broker is more expensive than at other service providers. But here too, try to lock this in with short-term bonds.
📈What is worth putting into a TBSZ account:
- dividend-paying shares: As I wrote above, in some cases dividends are subject to tax of up to 48%, of which 18% can be avoided, while in other cases dividends can be as low as 0%.
- foreign government securities: These are not subject to tax exemption for Hungarian citizens, for example, it is worth keeping the cash generated as a by-product of the investment in T-Bills (American short-term bonds, approximately the same as Hungarian discount treasury bills).
- corporate bonds: the same as the case of foreign government securities.
- any instrument that should be taxed
☝🏼The TBSZ account has another advantage: you don't have to file a tax return for it, you receive a "zero return" from NAV to your customer portal, and that's it.
🔄TBSZ account transfer, movement
TBSZ accounts can be moved between providers without having to be hacked. This can be done relatively easily with a bank deposit, but with a securities account there can be problems. One of these is that brokers may not have access to the same markets or instruments. It is also important to know exactly which stock exchange a share is listed on. For example, Unilever's ADR is listed on the US stock exchange, while the company is headquartered in the UK and the Netherlands, so its shares are also traded on European exchanges. The same is true for ETFs, you may be able to buy them at one broker and not at another. The easiest way is to call the provider or write them an email about the transfer.
There is a loophole: if you sell everything and transfer the money, this problem can be solved, but you still cannot buy back the shares that were listed on a market that the other broker does not have access to. Regarding the transfer, I will mention a real-life example that has arisen several times: Alibaba (BABA) shares. There was talk of delisting Chinese ADRs from the US stock exchange, meaning that anyone who owns such shares would have to transfer their shares to Hong Kong. Of course, there is a cost to the transfer, so it is worth checking the service providers' condition lists.
☝🏼Not all providers can do this because they do not have access to the Hong Kong stock exchange, so a forced sale and, in the case of a lower exchange rate than the purchase price, a permanent capital loss may occur.
📌In practice: The above is not just a theoretical possibility. I have already done this when the broker Random Capital was acquired by Erste Invest, and the latter did not have access to my pink sheet Tencent (TCEHY) shares. Because of this, trading in the paper was frozen and I was obliged to sell it by a certain deadline. What can be done in such a case? I did the following: I issued two limit orders, one sell at Random Capital and one buy at Interactive Brokers, and in exchange for some costs, the papers “swapped places” at the brokers.
✨What happens if I need to open the account?
Then you will have to pay taxes. This can be easily avoided with relatively simple planning. One is to open the aforementioned annual TBSZ accounts, and the other is to use multiple providers simultaneously. If you are not single, you can actually ask your partner to open TBSZ accounts, and this way you can spread your capital even further.
After the first TBSZ account, I opened a new account every year when I had enough money, until I reached the amount that I was not afraid to keep with one service provider, and then I went to the next service provider. With this method, I could have opened a maximum of 10 new accounts with 2 service providers during the term of the first TBSZ account, but of course there was no need for that many. Another good solution is that if you transfer money to your securities accounts for investment purposes, convert it into the currency in which the investment is made, but do not transfer it to the TBSZ account. As soon as a suitable investment target emerges, the transfer can take place, but only in the amount required to take on the given position. The remaining money can be withdrawn from the securities account at any time.
🆚TBSZ vs. NYESZ account
An alternative to the TBSZ account is the NYESZ, or Pension Pre-Employment Savings Account. This is primarily for those who want to save money for their retirement years. Of course, the conditions of the NYESZ account have also been adapted to this purpose. The basic operating principle of the two types is the same, so I will only discuss the differences. In the case of the TBSZ, you can only pay money in the collection year, and in the case of the NYESZ in any year.
Since this account essentially represents a very long commitment, up to 20-30 years, savings can be withdrawn tax-free under the following conditions:
- ✨You must have held the account for at least 10 years
- ✨You must retire (of course, if this condition is already met, only the first one should be taken into account)
Once the conditions are met, the NYESZ account offers practically the same advantages as the TBSZ account, the return on it will be completely tax-free. In terms of costs, it works practically the same as the TBSZ account. The NYESZ account also has another huge advantage over the TBSZ account. According to the current rules, 20% of the current year's contributions can be credited annually, but a maximum of HUF 100000. This is called a savings subsidy and a declaration must be filled out.
❌Limitations of the NYESZ account
Since the NYESZ account is tied to retirement, and you naturally have to do this in Hungary, fortunately you can buy more than just forint-based securities and investment units.
😭 There is one restriction, however: You can only purchase government securities, investment securities and money market instruments issued in Hungary or a member state of the European Economic Area (EEA). What you have access to depends primarily on the service provider, so before you rush to open a NYESZ account, ask your service provider about the options.
One of the rules of thumb for investments is that it is not beneficial to keep them in forint. Here, however, you will often be forced to do so because of service providers, and the time horizon is also very long, so there is a good chance that the weakening of the forint compared to other currencies will erode both your returns and the savings support of the NYESZ account, and I haven't even talked about domestic inflation. The larger the amount you have invested over the years, the smaller the percentage of the credit will be in proportion, but the more you will lose from the weakening of the forint.
To illustrate the problem with an example, let's assume that you invested 10 million forints over a 10-year term, which is not a lot at all if you want to save for retirement. Over the 10 years, you will receive a credit of 10*100 thousand forints, which is a tax-free profit of 1 million forints. I am not counting the tax benefits, since you would also receive them on a TBSZ account, so the main advantage of the NYESZ is the pre-savings subsidy. Compared to the total amount, 100 thousand forints/10 million forints will amount to 1%. I have calculated how little this matters in relation to the final amount of the NYESZ account over a longer period of time in another article, which you can read here: Pension in Hungary – What is the problem with the current system?
📌In practice: I don't have a single NYESZ account because I think that if someone were to save money for retirement, they would be better off opening a TBSZ account, investing in foreign currency, and then re-opening it every 5 years until they retire. It's more flexible, and it's not subject to the above restrictions.
🪤Other traps of the NYESZ
Let's say you open a NYESZ account today and keep it for 15-20 years. Withdrawing money from NYESZ is considered a so-called retirement payment. What is the guarantee that the annual credit will still be there in 20 years? There is also no guarantee that the state will simply not postpone the retirement age for such a long time. The number of people of working age has fallen so much that they are no longer able to finance the future pension system from their taxes, so when will the conditions be changed? Moreover, in many countries, pension payments are not tax-free, meaning that by the time the NYESZ accounts expire, this may also fall under the scope of taxable income.
❗If you open your NYESZ account prematurely, the proceeds will be taxed as other income. You will have to pay all kinds of contributions afterwards, plus you will have to repay tax credits at 120%. In addition retroactively you also have to amend your tax returns. So there are too many unknowns, not to mention the fact that the government has already plowed through the previous voluntary pension fund system❗
Summary
The TBSZ account is a special Hungarian form of savings that would be a crime not to take advantage of. I can't really think of another country where you can access your investments practically tax-free after 5 years, but of course there are similar forms elsewhere, for example the ISA in England. There are limitations to TBSZ, but these are dwarfed by its advantages. There are countless special cases and interesting facts to list in this topic, and I tried to cover them as much as possible. I even looked into the mysteries of the NYESZ account, so anyone interested in this can find their calculations in the article. The bottom line: if you plan for the long term, TBSZ will be a mandatory element of your investment❗
Frequently Asked Questions (FAQ)
📊Which broker should I choose to buy shares?
There are several aspects to consider when choosing a broker - we will write a complete article about this - but I would like to highlight a few that are worth considering:
- size, reliability: The bigger a broker, the safer it is. Those with a banking background – Erste, K&H, Charles Schwab, etc. – are even better, and well-known brokers are typically more reliable.
- expenditures: Brokers operate with various costs, such as the account management fee, the portfolio fee - which is the worst cost -, the purchase/sale fee and the currency exchange cost (if USD is not deposited in the brokerage account)
- Availability of instruments: It doesn't matter which broker has which market available, or whether they add the given instrument upon request and how quickly.
- account type: cash or margin account, the latter can only be used for options. For Hungarian tax residents, having a TBSZ account is important, but citizens of other countries also have special options – such as the American 401K retirement savings account – which are either supported by the broker or not.
- surface: is one of the most underrated aspects, and it can be a real pain. Anyone who had an account with Random Capital, a now-defunct Hungarian broker, knows what it's like to work on a platform left over from the 90s. Erste's system is lousy slow, Interactive Brokers requires a flight test, and LightYear believes in simple but modern solutions.
Based on the above, I recommend the Interactive Brokers account because:
- the world's largest broker with a strong background
- a few million instruments are available on it, and shares listed on multiple markets – e.g. both the original and the ADR – of a single share are often available
- Interactive Brokers a discount broker, they have the lowest prices on the market
- you can link your Wise account to them, from which you can quickly transfer money
- Morningstar's analyses are available for free under the fundamental explorer (good for analysis)
- EVA framework data is available under fundamental explorer (useful for analysis)
- they have both cash and margin accounts, Hungarian citizens can open a TBSZ
- you can use three types of interfaces: there is a web and PC client and a phone application
🧾 How is TBSZ inherited?
The savings in the TBSZ account are part of the inheritance and must therefore be taken into account during the inheritance. According to the relevant legislation, the direct heirs and the surviving spouse are exempt from paying inheritance tax. In all other cases, the heirs must pay tax in accordance with the provisions of Act XCIII of 1990 on inheritance tax. However, it is best to ask a tax expert what laws apply in your situation, which may be completely specific.
🏆 Which is the best TBSZ account?
The title of best TBSZ account should be awarded to the account that best meets your needs. It always depends on what aspects you consider important: low costs, wide ETF/investment offer, easy online management. In general, the offers of Erste, LightYear, Interactive Brokers are considered favorable on the Hungarian market, but it is worth making a fresh comparison every year.
🧮 Is there a TBSZ calculator?
Yes, several banks and financial portals offer TBSZ calculators, which help you estimate the expected return on your savings and the tax savings until the end of the term. You can easily model whether it is worth choosing TBSZ for you. However, practice shows that on the one hand, costs can change quite quickly, and on the other hand, it is worth haggling for a small discount at your bank. I can say from experience that it works in the case of Erste 😇
💸 What are the costs of a TBSZ account?
The costs of the TBSZ may include account management fees (usually an annual fee), purchase/sale transaction fees, ETF or investment fund management costs, and inactivity, holding or custody fees for some providers. You can always find the exact fees in the announcement of the chosen provider, but trading, i.e. selling and buying costs, can often be deducted from these.
🏦 Opening a TBSZ account: how?
You can open a TBSZ account through your existing securities account, every year between January 1 and December 31, this is the so-called collection year. During this period, you can transfer the money, which you can rotate within the account tax-free during the 5-year lock-up period, if you comply with the conditions. The exception to this is the withholding tax on dividends, because this is deducted before the broker credits it to your account.
📈 ETF TBSZ: possible?
Yes, you can also buy ETFs in a TBSZ account, so you can enjoy low-cost, global or thematic investments tax-free if you keep the 5-year lock-in period. This is one of the most popular and effective ways to use TBSZ.
🧭 Where can I open a TBSZ account?
To choose the best place, it is worth comparing the fees, product offerings and customer interfaces of the service providers. Erste, K&H, Interactive Brokers may be good options, but if you already have an existing account somewhere, it may be easier to open TBSZ there as well. Above a certain amount, it is worth opening an account with 2-3 service providers, and even taking part of your assets abroad.
🧾 What must be reported to NAV in the event of TBSZ?
Nothing. The account-keeping institution automatically reports the opening, management and closure of the TBSZ to the Tax Authority, so you don't have to do anything special. Subsequent tax aspects are also automatically sorted out if you follow the rules.
⏳ TBSZ after 5 years: what will happen?
The TBSZ expires after 5 years, and the profits on it become completely tax-free. You can then decide whether to withdraw the money or start another TBSZ with a cumulative year and carry the amount forward to grow tax-free for another 5 years. In this case, there is no cumulative year, meaning that the term of the carried-over TBSZ account is not 5+1 years, but only 5.
🥇 Which is the best TBSZ?
The best TBSZ is the one that suits you best: low fees, easy access, good customer service, wide investment options.
🧠 What is a brokerage account?
A brokerage account (also known as a securities account) is an account through which you can buy or sell stocks, bonds, ETFs, and other investment products. It is also called a master account, and any other accounts you open alongside it, such as a TBSZ or a margin account, which is good for options trading, for example.
💼 What is a TBSZ account?
The Long-Term Investment Account (TBSZ) is a Hungarian tax-advantaged savings form, in which you can withdraw your returns with a reduced rate after 3 years and with a full tax exemption after 5 years, if you do not cancel the deposit. There are similar accounts abroad, but not under the name TBSZ, such as the English ISA.
🧾 NAV TBSZ announcement!
You do not have to take care of the TBSZ notification, the service provider will handle it for the NAV, if the service provider is Hungarian. This is automatic, no separate declaration or administration is required, except if you open an account with a foreign service provider. In that case, the state on the e-paper surface You need to fill out a form. You can find out how to do this on YouTube, there are countless videos on it.
🧓 Meaning of NYESZ!
The NYESZ (Retirement Savings Account) is a long-term savings form that encourages retirement savings with an annual tax credit of 20% – but a maximum of HUF 100000. The tax credit is paid after your contributions, but you can only withdraw the savings tax-free upon retirement.
🔄 NYESZ TBSZ conversion, how do you do it?
If your pension entitlement or NYESZ ceases, you have the option to transfer the assets there to a TBSZ account. This only happens tax-free if you meet the legal requirements; for the transfer, you typically need to submit an application to the bank that holds the account.
💰 Dividends on TBSZ account: how are they taxed?
Dividends received within a TBSZ account also become tax-free after 5 years of deposit. The account manager typically automatically reinvests or credits the dividends, and if you do not close the account prematurely, you will not have to pay either SZJA or SZOCHO afterwards. However, only what is credited tax-free to the account is credited; if certain items are deducted beforehand, it will still be taxed.
Legal and liability statement (aka. disclaimer): my articles contain personal opinions, I write them solely for my own entertainment and that of my readers. iO ChartsThe articles published on do NOT in any way exhaust the topic of investment advice. I have never wanted, do not want and am unlikely to provide such in the future. What is written here is for informational purposes only and should NOT be construed as an offer. The expression of opinion should NOT be considered as a guarantee for the sale or purchase of financial instruments in any way. You are SOLELY responsible for the decisions you make, and no one else, including me, assumes the risk.
