Banking & Finance in Israel: Opening Accounts, Credit Cards, and Managing Money

Banking & Finance in Israel

Opening a Bank Account

Required Documents

• Teudat Zehut (Israeli ID)
• Teudat Oleh (for new immigrants)
• Proof of address (rental contract, utility bill)
• Passport

Major Banks

Bank Hapoalim (בנק הפועלים)

• Largest bank in Israel
• Branches everywhere
• Good mobile app
• Average fees

Bank Leumi (בנק לאומי)

• Second largest
• Modern digital services
• Competitive rates
• English-speaking services

Discount Bank (דיסקונט)

• Good for students/young professionals
• Lower fees
• Decent app

Mizrahi Tefahot (מזרחי טפחות)

• Popular with religious community
• Personal service
• Higher fees

Digital Banks

• One Zero: No fees, app-only
• Pepper: Low fees, good rates
• Best for: Tech-savvy users, second account

Account Types

• Current account (Heshbon Avar): Standard checking
• Savings account (Heshbon Osher): Higher interest, limited withdrawals
• Foreign currency: USD, EUR accounts available

Banking Fees

Typical Monthly Costs

• Account maintenance: 10-15 NIS/month
• Debit card: Free-10 NIS/month
• Credit card: 5-10 NIS/month
• Transactions: Small fees per transaction

For New Olim

• First 2-3 years: Reduced/zero fees
• Negotiate: Ask for oleh benefits package
• Compare: Shop around before choosing

Credit Cards

Getting Your First Card

• Need 3-6 months banking history
• Start with low credit limit
• Builds credit score over time

Payment Methods

• Regular (Ragil): Pay in full next month
• Credit/Installments (Tashlumim): Split over months
• Immediate debit (Hovaת): Direct from account

Popular Credit Cards

• Isracard (ישראכרט): Most common
• Cal (כאל): Alternative network
• Max: Isracard's budget option
• Leumi Card: Bank-issued

Understanding Israeli Payslips

Gross vs. Net

• Gross (Bruto): Before deductions
• Net (Neto): Take-home pay
• Deductions: ~25-30% of gross

Deductions Include

• Income tax (Mas Hachnasa): 10-50% progressive
• Bituach Leumi: National Insurance (~12%)
• Health tax: ~5%
• Pension: 6-7%

Tax Benefits for Olim

• 10-year tax exemption on foreign income
• 3.5-year business tax breaks
• Reduced capital gains tax

Mortgages (Mashkanta)

Requirements

• Israeli credit history (2+ years)
• Stable employment
• Down payment: 25-30%
• Debt-to-income ratio check

Mortgage Types

• Prime: Tracks Bank of Israel rate
• Fixed: Locked rate (more expensive)
• Mixed: Combination of both
• Terms: Up to 30 years

For Olim

• Merkantil discount: Government subsidy
• Easier approval first few years
• Larger mortgages possible with oleh benefits

Money Transfers

Sending Money Abroad

• Bank wire: Expensive (50-100 NIS + exchange rate markup)
• Wise (TransferWise): Cheapest, best rates
• PayPal: Convenient but higher fees
• Western Union: Fast but expensive

Receiving Money

• Provide Israeli IBAN
• Watch out for fees
• Report large sums to tax authority

Budgeting in Israel

Average Monthly Expenses (Single Person)

• Rent: 3,000-6,000 NIS
• Groceries: 1,500-2,000 NIS
• Transportation: 200-500 NIS
• Health insurance: 100-200 NIS
• Phone/Internet: 150-200 NIS
• Total: ~5,500-9,500 NIS

Saving Strategies

• Shop at budget supermarkets (Rami Levy, Shufersal Deal)
• Use Rav Kav for public transport
• Cook at home (eating out expensive)
• Buy at shuk (market) for produce
• Wait for sales (especially clothing)

Investment Options

Pension (Keren Pensia)

• Mandatory employer contribution
• Tax-deductible personal contributions
• Choose your fund manager

Savings Plans (Keren Hishtalmut)

• Combined savings and severance
• Tax benefits
• Liquid after 6 years

Stock Market

• Israeli stocks (TASE)
• Foreign stocks (requires reporting)
• ETFs and mutual funds available

Important Money Tips

1. Keep Israeli and foreign accounts initially
2. Use money transfer services not banks
3. Build credit slowly - start with debit, then credit
4. Understand your payslip - ask HR to explain
5. Save emergency fund - 3-6 months expenses
6. Maximize oleh benefits - they expire!
7. Get financial advisor - many specialize in olim
8. Track expenses - Israel is expensive
9. Learn financial Hebrew - critical for banking
10. Read before signing - have contracts translated