Last Updated on May 9, 2024

The information contained in this article is for general educational purposes and should never be viewed as specific investment, tax, or legal advice or a recommendation of any platform or service.

In this article, I will walk you through some of the steps and important factors to consider when deciding the best platform for you to manage your investments on

If you haven’t yet moved to Israel, this article isn’t likely to be relevant at this time. This post will also not be pertinent to retirement accounts. If you made Aliyah with a US IRA or 401k it is almost always the best option to keep these accounts at a US brokerage. Moving these funds to Israel will likely lead to significant tax ramifications and eliminate your ability to enjoy tax-deferred growth. Similarly, as tempting as it might be move your Israeli pension or Keren Hishtalmut to a commision-free US brokerage, it can’t be done.

Step 1: Summarizing some of the top investing platforms

• Commision-free US brokerages – These are some of the many platforms you can access if you do maintain a US address (many also require a US phone number): Charles Schwab, Vanguard, Interactive Brokers (IBKR Lite), Ally Invest, Robinhood, M1, and Fidelity.
  
• International US brokerages – These are some of the best US brokerages you can access if you don’t maintain a US address. Schwab International and Interactive Brokers (IBKR Pro)
  
• Israeli Brokerages – Some of the top Israeli brokerages (בית השקעות) include: Meitav, IBI, Excellence, and Psagot.
  
• Introducing Brokers – These aren’t brokers themselves, but offer access to brokerage platforms (namely Interactive Brokers) with additional features that may be beneficial for an Israeli: בלינק, אינטראקטיב ישראל

Now that you have a basic understanding of the key players, move on to step 2 to start identify which option is best for you.

Step 2: Answer these key questions

The second step is to make sure you have a good general understanding of your goals, objectives and tax status. See if you can answer all of the following questions:

• Are you in your first 10 years after Aliyah? If so, buying investments outside of Israel is generally preferable.
• Do you file Israeli taxes? If not, do you think you may need to file taxes in Israel in the future?
• Are you an American taxpayer? If you are, בלינק & Excellence are not going to be available to you.
• Do you maintain a US address & US phone number?
• How much money are you looking to get started investing with?
• Where will the money be coming from? Are you looking to make regular contributions from a US or Israeli bank?
• How often do you plan on adding new funds to your account? Which country and bank account will those funds be coming from?
• How many shares (stocks, bonds, ETFs, etc.) do you plan on buying/selling each month?

You don’t need to have all the numbers figured out perfectly, just a general idea. If you are confused about some of these questions, come back to them after you have reviewed the factors in the next step – more information below may help clarify.

Step 3: Determine which factors apply to you

Here is a summary of many of the important factors to consider – some factors may not apply to you. I suggest making a list or chart and ranking the factors in order of which are most important for you.

Accounting costs

One of the main drawbacks of using any non-Israeli brokerage is required Israeli tax reporting. If you are an employee of an Israeli company and have no savings or investments outside of Israel – there is a good chance that you don’t need to file Israeli taxes at all. By using an Israeli brokerage, taxes owed from income generated in the account will automatically be withheld for you with no further action on your part (from an Israeli tax perspective).

If you use a taxable US or International Brokerage (after your 10 year tax holiday), you will to report any income generated in these accounts (dividends, capital gains, etc.) to the Israeli tax authority. While I haven’t done a survey, my basic understanding from asking around is that the accounting costs for a simple Israeli tax return range from around 1000-2000 ILS + VAT per year. This can be a very significant annual cost if you would have no other reason to file and could be seen as one of the most important factors to consider in that situation.

New robo-tax reporting services like Alfie which only charge 275 NIS (+100 NIS for a zoom consult) per year seem to be significantly reducing the cost of this annual reporting obligation.

Obviously, you can ignore this factor if you already have an Israeli accountant or will soon need one. Some of the reasons you may already need an Israeli accountant to file taxes anyway include: Maintaining other savings and investments outside of Israel after your 10 year tax holiday, owning a business, working remotely in Israel for a non-Israeli company, and giving charity. If you already have an Israeli accountant, using a US or international brokerage is often the best way to go.

If you are a US citizen you will also need to consider additional US accounting costs. If you use a US or international brokerage, your brokerage will issue a 1099 (tax form) each year which makes US tax reporting fairly simple. If you use an Israeli brokerage, your US tax reporting will be more complicated. In addition, for US citizens, the amount of Israeli tax withheld on dividends earned from US ETFs purchased through an Israeli brokerage may to be inaccurate. Avoiding double taxation in this situation would likely require filing an annual Israeli tax report anyway.

Edge: For American Israelis, US & International brokerages tend to lead to easier overall tax reporting over the long-term, even though they may trigger an Israeli tax reporting requirement you wouldn’t otherwise have had to deal with.
For non-American Israelis, Israeli brokerages have the edge in this category.

Minimums

Here is a breakdown of the minimum initial investment needed to open your first account:

Brokerage:	Most US Brokerages	IBKR Pro	*בלינק	אינטראקטיב ישראל	Meitav Dash	IBI	Excellence	Schwab International
Minimum:	$0-100	$0	$0	$0	10,000 NIS	15,000 NIS	20,000 NIS	$25,000

Edge: US brokerages and IBKR Pro

Cash flow

One of the most important parts of any long-term investment plan is the ability to make regular contributions. That is why a key factor for many in picking the right brokerage is knowing where the money will be coming from to make those regular transfers.

For someone looking to invest a portion of their monthly Israeli income it is important that the brokerage be easily accessible from Israel. Israeli brokerages obviously accept direct transfer from your Israeli bank account. Interactive Brokers is also a good option as you can make a regular bank transfer from your Israeli bank to your IBKR account (discussed here) – the only US based brokerage that offers this. For someone who is only drawing from US income or US savings for long-term investment purposes, US brokerages are far more attractive.

Currency exchange costs are another important part of the cash flow equation. This is a fee that can hit you twice both when you transfer money from Israel to your brokerage and then eventually when you transfer money back to your Israeli banks. US based ETFs are arguably the single best investment vehicle for Americans living in Israel (to avoid PFICs and stock picking) and they can only be purchased in USD.

For those looking to invest in US ETFs from Israeli sourced funds – IBKR offer extremely low commissions on currency exchange ($2 for up to $100k). Israeli brokers often charge both an exchange fee and take a significant spread from the live market rate as an additional fee. All other US brokerages I am aware of do not accept deposits in shekels or if they do – immediately convert them to dollars at an unfavorable rate.

Interactive Brokers shines the most in this category because you can easily receive money from and withdraw money to both US and Israeli banks – with the lowest currency exchange fees available.

Edge: Interactive Brokers

Trading commissions

Here is a breakdown of the approximate trading costs for buying US stocks and ETFs:

Brokerage:	Us Brokerages	Schwab International	בלינק*	IBKR Pro	אינטראקטיב ישראל	Meitav Dash	IBI	Excellence
Commision per trade	$0	$0	$0 (up to 10 transactions per month)	$0.0035 per share	$0.01 per share	$0.01 per share	$0.01 per share	$0.01 per share
Minimum Commision per trade:	$0	$0	$0	$0.35	$2.5	$5	$7.5	$5

Edge: US Brokerages, בלינק

To see more information about fees and commissions charged by each platform and compare other Israeli platforms, check out the following links. Obviously, like all financial institutions in Israel, everything is negotiable and fees are changing constantly – you may be able to do better than the fees listed for the Israeli platforms in this post:

• Post on Ninja Finance (Hebrew)
• Comparison of all brokerages/banks in Israel (Hebrew)
• IBKR Pro

Buying on the TASE

If you are looking specifically to purchase Israeli shekel bonds or stock traded on the Tel Aviv stock exchange, there isn’t likely any cost-effective way to do that outside of an Israeli bank or brokerage account. If you are a US citizen, make sure you understand the potential US tax consequences of purchasing any Israeli mutual fund or ETF, and the tedious and risky nature of purchasing individual stocks and bonds before pursuing this strategy. For a long-term investors, the diffirence in fees between brokerages for buying Israeli stocks and bonds is pretty negligible.

For non-Americans, access to low-cost shekel denominated ETFs traded on the TASE can often be the best long term investment vehicle because they can be purchased in shekels and have potential Israeli tax advantages. Therefore, if you are not American, this is often one of the more important factors to consider.

Brokerage:	Meitav Dash	IBI	Excellence
Commision per trade	.08-.09%	.08%	.07-.08%
Minimum Commision per trade:	4.65 NIS	2.35 NIS	3 NIS

Edge: Israeli brokerages

Monthly maintenance fees

These are the monthly fees you will incur if the account is open but no transactions are being made in the account. Generally, any commissions paid will cancel out any monthly maintenance fees.

Brokerage:	US Brokerages	International US Brokerages	Meitav Dash	IBI	Excellence
Monthly Fee:	$0	$0	19.65 NIS	15 NIS	15 NIS

Edge: US and International US Brokerages

Customer support and ease of use

US financial institutions are widely known to offer better customer support than Israeli ones – especially in English. Additionally, many Olim understandably prefer a trading platform in English. Schwab really shines in this category with 24 hour support and an easy to use desktop and mobile interface in english.

I have not done any “scientific polling” on this but on the Israeli brokerage side… just from asking around, IBI seems to get the best feedback as far as customer support.

בלינק also seems to be a very easy to use platform.

Edge: Schwab and other US brokerages

Step 4: Put it all together!

To be clear, this article is geared at helping you get started. If you are already have a brokerage account that you are using and comfortable with – don’t jump around to try and save a little bit on fees – especially if there will be adverse tax consequences for that decision.

Generally We have found Interactive Brokers to be the best choice for Americans living in Israel in most cases.

For non-Americans living in Israel that are not within 10 years of Aliyah, one of the Israeli brokerages tends to be a better choice. We have received positive feedback about IBI. If you have significant years left on your Aliyah holiday, Interactive Brokers may be a better choice.

Obviously, it is important to go through the factors above based on your personal circumstances to arrive at the best platform for you.

Step 5: Get started!

After going through this process you should have a better idea whether a US or Israeli brokerage is right for you. While I always do my best to write everything out as clearly as possible in all our free guides, I understand that many want additional guidance in building a comprehensive investment plan and getting started. This is what we do!

Be sure to check out our guided investment program for more information. It is time to get your money out of the bank!