There are many surprises (and yes, some horror stories) for former Americans who make aliyah and open a bank account in Israel. For example, in most Israeli banks, you cannot cash a check against your own account. You must bring it to the bank (and some say even to the specific branch) that hosts the account on which the check was drawn in order to cash it. Even further, some checks, marked with two parallel black lines on the face, can't be cashed at all and must be deposited.
Being constantly surprised by banking practices here, I asked friends on Facebook to comment on what they've learned about banking since making aliyah. A very special thanks to all who responded to my request.
I've organized and compiled the comments here in an effort to make things easier for the rest of us. If you have other tips, please feel free to add them in the comments section below. Especially welcome are comments that correct errors, if any, listed below.
First, in no particular order, some basic facts about banking in Israel:
- Most Israeli credit cards operate more like debit cards. You get a monthly credit limit and your credit limit is reduced as you charge things during the month. Payment is taken from your account once a month and your credit line is restored to the monthly limit. When you first arrive and/or whenever you are making large purchases, your card can be declined even if you have plenty of money in your account. This is generally resolved with a call to your banker who can authorize a monthly credit limit increase, either temporarily or permanently.
- Tashlumim means payments. When you buy a big-ticket item, you can arrange to make monthly payments, called tashlumim, generally without interest charges. Each time you check out at the grocery store, you will be asked how many payments you want to make. So if you're not careful, you could still be paying in September for vegetables you ate in June.
- Many recurring bills (utilities, arnona, cell phone, even charitable donations) can be set up to be automatically deducted from your bank account or charged to your credit card. This system is called horat keva.
- Most banks charge a fee for everything. We once wanted to make a mortgage payment in cash and were shocked to learn that there was a fee to deposit cash into our account.
- Although less common than it once was, overdraft is a system by which Israeli banks cover your bills and lend you money (with interest) without informing you that you have gone into overdraft. As I understand it, there are now limits imposed on accounts so people can't run up the kind of huge overdrafts they used to, but the system still exists.
- Israel has a banking system called Bank HaDoar which makes it possible to open an account at the post office and do most basic banking transactions there. Fees and services are bare bones, but there are branches all over the country.
Here are some comments about surprises olim encountered as a result of being unfamiliar with the Israeli banking system. In most cases, these are being published verbatim, but I did edit lightly to correct typos and make things a bit clearer to those less familiar with the system here.
You can write post-dated checks.
You can write a check with the payee blank. Your check will be passed from hand-to-hand as cash until someone decides to deposit it.
Be very careful about cashing checks, because after 5 months they will not honor/deposit the check in your account.
All your 'horao't keva' should be put onto your credit card and not via your account, because they will charge you for every single transaction including hora'ot keva of course. So on a credit card, all your payments are deducted once a month and the fee is charged only once. Very useful, bankers don't tell you this of course.
The problem with putting everything on your credit card is that you will use up all your mesgaerit (the limit on your card). It has happened to us. We bought a few big items, fridge, beds, etc. and put them on payments on our card. When I went to the supermarket the next day, the card was declined. When I called the bank, they said I had reached my limit.
Some expenses, like tuition for school, can't be charged on a credit card and can only be paid by hora'ot keva from your bank account.
Unpaid tashlumim still count against your credit limit, which will lead them to shut down your card. For example, we had two children to pay orthodontia for, so my husband arranged tashlumim through the kupa, using his credit card. The next thing we knew, all of our credit cards attached to the same account were shut down because they decided that we were in overdraft. They were not able to explain this to us when we called to ask why we couldn't use our credit cards, and we started freaking out, thinking someone had stolen our credit card, until I analyzed the account closely over the internet and then called them up arguing. That's when they explained to me that tashlumim, even though you are not paying it yet, still counts against your available balance as if you are paying for it!
The big one for me was overdraft. I was in shock when I realized that we had one. So, they should know that such a thing exists and it is based on your monthly income and does incur interest.
They will bump it and bump it until pitom you have a huge debt on your hands. Happened to us to, we went to the bank and our overdraft was almost at 40,000 shekels!! I was in shock and they said that every month they just bumped it up to keep everything covered instead of telling us to stop spending!! This was before we could access our account on the net. Now, I watch it. But, on the plus side, if you have some kind of financial emergency (broken appliance, emergency trip abroad), you can get a temporary raise in your overdraft or a small loan fairly easy at the bank.
If the bank machine eats your check at a different branch, you have to get your branch to call them and arrange for them to "transfer" the money into your account, since the branch which ate the check takes the money for themselves.
It is sometimes cheaper to take cash from an ATM than from the teller. It pays to ask.
When your credit card expires, they don't mail a new one to you (or even send a notification). You need to know by yourself to go to the bank and pick it up.
Banks will not mail credit cards, check orders or PINs. You have to pick them up yourself.
And when the card expires without you noticing, your payments could be declined and not paid. This also happened to us when we were in the US on vacation. Our card expired, we weren't here to pick up the new one and activate it. Our phone got turned off because we "missed" a payment even though there was plenty of money in the bank.
Banks here know no privacy. They will share your bank details as if it were a shuk. Coming from Europe where you need an appointment with the banker to discuss your matters .. here it's quite a shocker!
You can get a credit card from CAL. It is called a "Cal Active." It works like the American credit cards. You can charge the full amount or do payments if the place of business offers it. Each month, the minimum amount is automatically deducted from your bank account. If you want to pay more than the minimum, you need to call or go on-line to raise the amount to be deducted. I got my Cal Active from being in the teacher's union, but I am sure there is other ways of getting it.
When you send a deposit by mail, it can take weeks to show up in your account.
The number one tip: Make friends with someone at the bank. It will prove useful time and time again to know a particular employee you can go to with your banking problems.
I think it's fair to say that banking here is more "human" than in the U.S. - you can talk to your banker or the branch manager if you have issues or special requests to deal with.
Sometimes you can get bank accounts through your place of work. Like, I am a member of the teacher's union, irgun hamorim, I can open an account with Bank Discount with extra benefits and more loan options with better conditions since the organization is the guarantor.
Always make sure you're getting the best deal they can give you. We were with Bank Discount from Day 1, always dealt with the same woman who knows us. Three years into having an account we went in to tell them we want to switch to a different bank for a better rate. She suddenly says, "You're a doctor, right? I think I can get you a great rate." It took her three yrs to decide to share this...and we didn't know enough to ask for it!
Regarding mortgages, my advice is to use a broker. Our first mortgage we did by ourselves and now we are re-financing through a broker. We got a bad deal the first time just because we didn't understand anything. It is well worth the money to go through a broker.
Realize that it's not the bank that makes the polices, but rather the branch itself. Some banks are not olim friendly at all and you have to "prove" your solubility over the course of 1/2 a year to a year, before they will simply let you deposit foreign checks. Other banks, which deal with olim, and realize 1) American salaries are much higher than Israeli ones, 2) American HATE being in the red, will be much more flexible and will even "advance" you the money until the foreign check clears. Also, very important, you must check your bank account balance. In America if you're in arrears, the bank will call you nonstop. Here, not only don't they tell you, they actually don't mind it at all.
I think in my 32 years here, I have had just about every banking problem there is: shutting down checking (after the divorce), bounced checks, miscalculated charges, etc. I have found that there are two big factors in successful banking: 1) get an online account with the bank and monitor your activity often, and KNOW (not guess) what your balance is, and what is going in and coming out. 2) develop a good relationship with the bank personnel. Loans, overdraft, and even all kinds of charges are really on a "sliding scale," despite their being bank guidelines. interest can be adjusted, etc just by showing good faith and being open with the bank folks.
Finally, a number of people wrote about good experiences they have had at banks in Israel. And they name names.
I actually opened an account at Bank of Jerusalem and I love them.
Some of the banks (Bank Yerushalayim) will let you prove your income for a loan by a letter from a Rav. You put together all your income info (especially if it is undocumented) take it to a Rav or the bais din and they certify that the info is correct and the bank accepts it as proof of income. We did that in Kiryat Sefer to prove income for a loan!
Our family started banking at Bank of Jerusalem when we got our first Israeli mortgage close to 10 years ago. After we paid off the mortgage and made aliyah, we were going to switch to a bank closer to home, but we have been getting excellent service from our English-speaking banker at Bank of Jerusalem so we stay there. We recommend him, and the bank, to many new olim who are looking for an olim-friendly bank.
I just had a wonderful surprise. Bank Hapoalim called because my balance was over a certain amount and they want to know if I want to invest it with interest. And when deciding how much to withdraw, she asked me how much I think I need over Pesach :) And of course, the call ended with Chag Sameach!
Our best banking experience has been with Bank Yahav (which is now open to everyone). At least in our case, they don't charge ANY transaction fee (no line fees either). And we cash checks at our bank all the time.
Bank Leumi started mailing the credit cards. I was prepared to go get mine when I received a replacement by mail. To validate it you have to call them or go to an ATM.
I love Bank Hadoar! You can go to any post office and do your transactions. We pay 12 NIS a month for a debit card. No tashlumim. No ovedraft. It is simple and it works. Plus you can get a debit card for international purchases if you want. Post offices have better hours than banks in general.
And one final, upbeat comment from a woman who single-handedly shared the most tips for the benefit of the rest of us:
With all these mishaps we have had at the bank (and we have had a lot), I am very pleased with my financial situation here. I am a teacher and my husband an officer manager. Our salaries are not high at all and I feel with all the things offered here that aren't offered in the States have made it easier to get by here without feeling like you are drowning. I never stress out if I am not going to have quite enough money to cover my debts because of overdraft and post-dating checks and payments. You just have to watch it and manage it so that it doesn't get out of hand.
May we all be blessed to learn from one another always.
May we all be blessed to learn from one another always.