Last Updated on December 21, 2023

The revenue of Israeli banks just keep going up. While much of their profits stem from places you would expect, like interest from mortgages and loans, fees and commissions continue to make up a significant portion of bank profits. The fact is that many Israelis are paying unnecessary fees to their bank – this guide is focused on helping you keep more of what is yours. If you don’t have an Israeli bank yet, skip to the middle of “Step 2”.

Step 1: Uncover the hidden fees

The first step is to understand what fees you have already been paying. Banks are required to provide this information for you in an annual report “תעודת זהות בנקאית“. This annual report provides in-depth info on your banking activities, spending, income, and all the fees you have paid throughout the year. This article is focused specifically on fees but you should realize that this form can provide you with a lot of additional insights into your finances beyond just the fees you are paying.

The report for the previous year is generally available at the end of February – so as of February 28th, 2023 you should have been able to download the report for 2022 (Set yourself an annual calendar reminder!).

Many banks make this document a bit difficult to find and some don’t make it available if you are accessing your account via a mobile app. To download this document, log on to your account via a browser and look for a category such as “להפיק אישורים” or “דוחות ואישורים”. If you are having trouble finding it, just type {bank name} תעודת זהות בנקאית in to google and you should be able to find instructions or a link to login directly to the form for your specific bank. There will be both a summarized version (מקוצר) and a more detailed version (מפורט) – either should do the trick for this purpose.

Once downloaded, scroll down to the section on fees (עמלות) and begin reviewing to see all the banking fees you paid in the previous year. Don’t worry if you are a bit confused at this stage as to what each fee is referring to. Even fluent Hebrew speakers often struggle to understand everything mentioned in this form. The next step will discuss how you can use this form regardless.

Step 2: Eliminate the “normal” fees

Now that you have much more information at your fingertips, let’s focus on getting rid of these fees altogether.

Negotiating with confidence

The most common approach to getting your standard bank fees eliminated is just by asking your bank. Now there are obviously varying experiences when it comes to this approach but it is a good first step and many find it successful. Submit a request online asking for a year off of bank fees and be prepared to submit a similar request each year. If this is not successful, consider two alternative avenues for negotiation:

1. Schedule an appointment at your branch and bring your תעודת זהות בנקאית. Ask your banker to explain the fees – they understand this document very well – and ask them what they can do eliminate them.
2. Bring your תעודת זהות בנקאית to other banks in the area and ask them what they can offer you relative to what you are getting at your current bank. There is a good chance they will be willing to offer you at least an initial year or 2 without fees.

Consider a digital-only bank

Digital banks without any physical branches such as Pepper (owned by Leumi), and the new One Zero bank offer completely fee-free tracks. At this time, these options are not available for Israelis who also happen to be American citizens. Because of US (FATCA) reporting requirements, some of these services have therefore decided it is not in their interest to take on customers who are US Citizens at this time. In addition, new Olim are also generally prevented from opening an account. One Zero has said that they expect to change their policy on this in late 2023.

In addition, some regular banks offer a digital-only track without any fees such as FIBI’s Green Account. Lastly, Bank Yahav will give you a free account as long you’re earning a monthly salary of 5K directly deposited to your Yahav account.

Take advantage of new and special account deals

Many banks, especially if you are moving over from a different bank, will offer 1-3 years without any fees when you first open the account. Students, high-tech workers, and anyone under the age of 26 are generally able to open an account without fees.

Get rid of your bank credit cards

Another common bank fee some incur are monthly credit card fees (דמי כרטיס). If you were unable to get rid of the fees on these cards based on the previous steps, get rid of the cards instead. You can replace these cards with better, fee-free non-bank cards that have all the same basic functionality as your bank cards do (spending, ATM withdrawals, etc.).

Order a new card, wait until it arrives (this can take a while), make sure it does everything you need, and then write to your bank to cancel your bank cards – poof, there goes your credit card fees! See our full article “Israeli credit cards that don’t suck” for more info.

If all else fails

If you are unable to eliminate fees through negotiation and you are not looking to change banks/cards at this time – consider signing up for the basic fixed-fee track all banks are required to offer. The basic track costs a maximum of 10 shekel per month and includes up to 10 customer-executed transactions (online transfers, ATM withdrawals, standing orders, etc.) and up to one banker-executed transaction each month. You should be able to make this switch easily by logging on to your bank account – search for “מסלולי עמלות” and look for the basic track (בסיסי).

Step 3: Avoid costly extras

After you have hopefully reduced or eliminated your standard banking fees – let go through some of other important ways to keep the banks hands off your money.

Avoid cash, checks, and branches

Use digital means as much as possible. Checkbooks, cash, and bank branches are all becoming much less used – avoiding these can often be both more convenient and help you save on unnecessary costs.

Foreign currencies stay in foreign accounts

Israeli banks are rarely the best option to convert or store any currency other than shekels. This is especially true for Olim who maintain accounts outside of Israel. Opening a foreign currency account at your bank will likely lead to unexpected fees and unfavorable rates. If you can help it, the only thing you should transfer to your Israeli bank is shekels.

Keep money out of your עו”ש

Your bank is able to earn money off any cash sitting around in your checking account but they won’t be sharing any of those profits with you. That’s fine for money you need on-hand for your monthly expenses and regular cash-flow but much less ideal for your savings.

To earn interest on your savings you will need to get it out of your עובר ושב and into a shorter-term savings account and/or a longer-term investment vehicle depending on the nature of your goals.

Keep your investments out of the bank

Israeli banks are rarely the best option for opening or maintaining your long-term investments without clearly negotiated terms. Their fees are generally astronomical relative to the other options available to you. A recent video from ‎כאן חדשות‎ (Hebrew) did a great job pointing out the absurdity of the fees that many in Israel are paying for keeping investments at the bank.

Bottom line is that it usually makes more sense to invest elsewhere, especially if you are a US citizen. If you are interested in learning more or have additional questions you want answered around investing – grab a session in my calendar.

You can eliminate or reduce your bank fees dramatically. Banks in Israel rely on “inertia” to keep increasing their fee revenue – the fact that most people don’t want to spend the time or energy to change their existing situation. These fees can really add up over time. We have taken the guesswork out of this process for you – go get started!