Chasing the Fionist Dream

Banks around the world all have one thing in common. Their main goal is to make money off you in any way they can.

Israeli banks are no different. They are going to charge you an arm and a leg unless YOU put a stop to it. Did you know that Israeli banks charge you for every single transaction you do? This refers to your simple עמלת שורה transactions like withdrawing cash, depositing a check or wire transfers. As of April 2014 the banks are required to allow you to choose a fixed plan for transactions from 10-25 shekel depending on how many transactions a month you do.

If you don’t know how much you are paying a month on fees, log in to your bank account and under דוחול (reports) download your פירוט עמלות to see how much you have paid during a particular period of time.

Bank’s best clients
If you pay your bills on time, don’t go into debt, and never take a loan, your bank likes you but you aren’t their favorite. Who do the banks like best? Banks love anyone who can be convinced to take a loan. Students that may need a loan to cover school costs, anyone who is always in (mild, controlled) overdraft or anyone who might just want to remodel their kitchen. Banks want you to be in debt so they can gain the interest. They also like public service employees since they are unlikely to be fired and have a fixed income.

According to a report published in December 2022 bank profits just keep going up, and a lot of it comes from the fees they charge us for simply having an account.

The fixed plan mentioned above does not include the monthly charge you pay for your credit card. These charges can be anywhere from 12-20 shekel a month per card. That’s at minimum 144 shekel a year, which could otherwise buy at least 20 liters of milk. Call your bank and ask them to forgive this fee. If they don’t, find a credit card company not connected to your bank.

You don’t need to have your credit card with the bank. There is Max, Cal, Isracard and others. Find the best type of card that is good for you. You can read more about Israeli credit cards that don’t suck here. We use Cal FixBack because it gives us Buyme.

Now what banks don’t like to share is that they all offer different types of “free” accounts where you wont pay for the basic transaction for a few years just by simply having a paycheck coming in. Some of the banks might only offer it to you if you are a new client.

Ways to get rid of some of the fees
There are times that the bank will “fight” to get new customers and they will offer a limited time offer for new customers to join. From no basic fees for 3 years, a “free” loan and other goodies.

Here are a few examples that different banks offer. (We have no connection and get nothing by showing this other than helping you.)

Almost all banks offer an online account – meaning there is no physical branch. They all offer no fees for basic transactions and others. Be aware that if you are a US citizen this type of account might be off limits to you by the bank.

If you’re a teacher, medical professional , high tech employee, lawyer, etc, many banks may give you a few years with no basic fees and extra benefits – but only if you ask for it. Check your bank’s website to see what benefits they offer. 

The biggest banks in Israel are Mizrahi, Benleumi, Discount Bank, Hapoalim Bank, Bank Leumi, but there are also many others. While there is no best bank, you might find that a particular bank might be best for you at this point in time. And remember, just like supermarkets, there is no need to stay loyal to your bank. Switching banks has become easier than ever.

Emergency funds and investment funds
One thing you might want to keep in the bank are your emergency funds. You can hold them in a short term savings fund called a פק”מ. Depending on the amount of time you want to lock up your money, you may receive a small amount of interest on it, which you can see here. However the whole point of an emergency fund is to have the money when you need it and not necessarily to gain interest, so plan wisely.

Another thing that your bank will offer you is the ability to build a stock market investment portfolio. While we are all about investing and managed our investments through the bank for years, we left when we learned that the bank’s management fees are much higher than pretty much any other option. There are multiple investment houses in Israel (and in the US), so as always, it’s best to do your homework and see what works best for you. The Israeli stock exchange has a website comparing the fees that are offered and what the actual fees people pay which you can find here. If you choose to keep your investments at your bank (for convenience reasons), make sure to negotiate your rates. There are discounts aplenty and you won’t get if you don’t ask.

Conclusion

Your bank is a business and its goal is to make money. Just like everything else in Israel is negotiable, so are your bank fees. Speak to your bank and get your fees lowered or eliminated. Every 20-40 shekel a month you can save on your bank fees can be invested or cover some milk and eggs. If your bank refuses to negotiate, leave. You do not need to stay loyal to your bank just because you’ve always been there.

How did you choose your current bank? Have you ever switched Israeli banks?