While the topic of finances might not initially seem exciting, effective money management is a crucial and inescapable part of life. With this in mind, we aim to bring both enthusiasm and practicality to the subject, making it more engaging and accessible.

Photo by Din Ahahroni Rolland

The truth is, while navigating Israel’s financial landscape independently comes with its challenges, it also offers many opportunities for new Olim. Until the October 7th war, Israel’s credit rating had consistently risen, reflecting the country’s economic stability and growth in more typical times.

Admittedly, many Olim may initially feel overwhelmed by the protocols and bureaucracy of Israel’s banking policies, as well as the policies of other institutions. However, you can take comfort in knowing that you’re becoming part of a stable banking system.

Israel's Banking Policy of Privacy

Banking practices in Israel differ significantly from those in many Western countries, particularly in their focus on transaction monitoring. Unlike the emphasis on banking secrecy and privacy found in other Western nations, Israeli banks adopt a vigilant approach. For example, Israeli banks often require your social security number, especially if you’re a U.S. citizen. This may seem like extra scrutiny at first, but it’s actually a step towards ensuring enhanced due diligence in banking procedures.

The heightened vigilance in Israeli banking practices is rooted in security concerns, given the persistent threat of terrorism in the region. Israel takes proactive measures to prevent the funding of potentially harmful activities. As a result, larger transactions may attract inquiries about their purpose. While asserting privacy rights may be tempting, cooperating is crucial, as resistance could lead to transaction declines or funds returned to their original account.

Additionally, U.S. regulations have prompted Israeli banks to maintain records of bank accounts held by U.S. citizens. They often require American citizens to complete various tax and IRS forms that disclose their social security or tax ID numbers. However, if you’re a U.S. citizen born in a country other than the U.S., the bank might not enforce such demands due to information gaps.

The complexity escalates with regulations like FBAR and 5471 reporting requirements. U.S. citizens who maintain foreign bank accounts or possess interests in foreign corporations must file these reports with the IRS/Treasury Department or face a potential $10,000 penalty as of today.

Seeking guidance from an accountant or lawyer well-versed in American tax regulations is strongly recommended, as compliance involves navigating various thresholds and nuances in these obligations.

Managing and Opening a Bank Account

Similar to banks worldwide, the account-opening process typically entails signing numerous documents. An intriguing aspect worth noting is that opening a bank account in Israel is possible even if you’re not a resident. Many Israeli banks offer “non-resident accounts” for individuals living abroad, contingent on specific criteria such as the annual number of days spent in Israel. However, this process may involve additional steps. If you intend to make Aliyah, it is recommended to wait and open an account once you become an Israeli citizen.

How does the process work, and how long does it take?

Upon choosing your preferred bank, a personal visit to the bank is typically necessary. For the most part, as a foreigner, a specific appointment is usually required, and it’s advisable to allocate sufficient time as paperwork and authorizations can be time-consuming. You can anticipate receiving standard account information, such as credit cards and online banking instructions.

Opening a Bank Account as a new Oleh

As an Oleh, it is required to gather various documents when preparing to open a new bank account. These include:

  • Your passport
  • Your resident identification card (Teudat Zehut) and your Oleh certificate (Teudat Oleh), which confirms your migrant status as an Oleh or other
  • For those from the US, your social security number will be required
  • The “Note of Future Bank Account” received at the Israeli airport upon arrival. The bank will stamp this to assist with your future registration at the Ministry of Aliyah and Integration
  • Initial funds in cash or a check to open the account
  • If opening a joint account, come with your spouse, as both parties need to be present
  • It’s highly recommended that you open your bank account and activate it with a deposit as soon as possible to receive your complete Aliyah benefits from the Ministry of Aliyah and Integration

Account Types

In Israel, banks establish distinct accounts (or subaccounts) for various currencies and purposes:

  • One account serves for day-to-day transactions like checks, transfers, bill payments, and deposits
  • Another is designated for investments (refer to “Asset Management in Israel” for details)
  • A separate account is allocated for saving deposits
  • Finally, there’s the foreign currency account

Each account is associated with its unique set of fees and management specifications. It is the client’s responsibility to ensure that the necessary funds are available in the relevant account.

Opening a Bank Account Online

To open an account as an Israeli resident, you’ll typically need to provide proof of residency and a physical visit to the bank is often required. However, some Israeli banks offer the convenience of opening an account virtually through their online services. Even in these cases, standard verification procedures are in place, which may include a video call with a bank representative for identity confirmation. Additionally, digital banks like Pepper (Hebrew website) and One Zero operates exclusively online.


Most Banks in Israel are known for charging a small fee (Amlah) for some financial transactions. It’s recommended to check and compare the different fees between each bank prior to choosing your preffered bank.

A useful tip for Olim, especially Olim opening a new account, is that banks often offer fee waivers or discounts initially. But keep in mind that these fees usually rise after the introductory grace period ends.

If you have a knack for charm, you might be able to negotiate with your banker to reduce your fees. This approach often works better for business owners and usually requires a direct request. Building a strong rapport with your banker can prove invaluable. It helps not only to secure fee reductions but also to navigate complex financial scenarios smoothly.

Banking ID Card

A recent and highly valuable enhancement to banking services, similar to a banking disclosure in the US, is the introduction of the “Banking ID Card.” This document, accessible through the client’s online account, provides a comprehensive overview of all account activities in a clear, concise, and easily comparable format.

Details included in the banking ID card are account assets, loans, total fees paid, standing bank orders, and any related powers of attorney. It is distributed annually on February 28 to all clients (individuals and small businesses) via their online account on the bank’s website or by mail (based on the client’s preferred communication method with the bank).

This report remains accessible on the online account for 3 years. Clients can also request a Banking ID Card anytime throughout the year to access up-to-date account information.


How does the Banking ID Card benefit the client?
The Banking ID Card enables the client to:

  • Monitor the account’s activity, allowing easier and more informed management
  • Familiarize itself with the banking products associated with the account, their costs, and the generated profits
  • Compare the current terms of the account with offerings from other banks, potentially prompting a switch to a more advantageous option
  • Trim down account management fees and expenses

6 ‘Must-Know’ Banking Tips for Israel

Here are some useful tips and shortcuts for banking in Israel that can save you time and money while avoiding unnecessary hassles:

  1. Utilize online banking – Banks in Israel frequently provide lower fees and decreased interest rates for online transactions, making them a cost-effective choice that benefits both the bank and the client. Conducting most of your banking online minimizes reliance on teller services and can save you time and money.
  2. Cultivate strong banking relationships – Establishing a strong rapport with your bank opens doors to a wider array of services, enhancing flexibility in obtaining credit. The closer your ties with the bank, the more advantageous your financial position becomes.
  3. Embrace digital payment solutions – The era of cashless transactions has blossomed thanks to technology. User-friendly apps like Bit and PayBox, provide convenient options that seamlessly sync with your smartphone, credit card, or bank account, facilitating effortless transactions. However, it is recommended to check in advance the various fees involved.
  4. Negotiate credit card fees – If you’re considering canceling your credit card due to fees, try contacting your credit card company first and explain your intention. They often offer to waive the fee, particularly if you make a point to schedule a reminder to call them again once the temporary waiver period is nearing its end.
  5. Embrace negotiation – In the local banking landscape, a key strategy to remember is that many fees, charges, and account terms are often negotiable, particularly as the size of your account grows. Showing a willingness to discuss and request discounts might just lead to an unexpectedly favorable outcome. Negotiation and bargaining are integral parts of Middle Eastern culture and extend to financial deals.
  6. Streamline transactions – To lower bank fees, consider reducing the number of transactions you make each month rather than using a credit card for recurring monthly expenses. This approach can help you avoid fees charged per check and for each transaction line.

Remember, the real trick is adapting these strategies to align with your financial landscape. Make these tips work for you by customizing them to your specific needs and circumstances.

Israel's Major Banks

Bank Hapoalim

Pioneering the banking industry since 1921, Bank Hapoalim stands as Israel's most expansive financial institution. It prides itself on accessibility, highlighted by its array of ATMs and branches scattered across the nation. Also, it offers competitive fees and an exclusive discount for Olim, making it a prime choice for banking services. (Hebrew Website)

Bank Leumi

Similar in size to Bank Hapoalim, Bank Leumi currently offers a diverse selection of account types, including specialized accounts for employees. The bank also caters to the needs of tourists with its non-resident account option and simplifies the banking experience with the possibility of opening accounts online.


Innovating within the realm of digital banking, Pepper was launched in 2017 as a forward-thinking branch of Bank Leumi. It revolutionizes banking with zero transaction fees, leveraging cutting-edge technology to provide personalized financial insights and account management solutions that cater directly to the user’s needs. (Hebrew website)

Mizrahi Tefahot Bank

Known for its commitment to flexible customer service, available both online and over the phone, Mizrahi Tefahot Bank is a key player in Israel's banking landscape. Its reputation as the leading mortgage provider highlights its essential role for those looking to invest in real estate within Israel.

Discount Bank

As the third-largest bank in Israel, founded in 1935, Discount Bank has established a big presence. Its affiliate, Mercantile Bank, serves a wide array of clients, including youth, soldiers, and more. Notably, Discount Bank offers enticing incentives specifically designed for new Olim Chadashim.

First International Bank of Israel (FIBI)

FIBI, ranked the fifth largest bank in Israel, distinguishes itself by focusing on business accounts and premium services tailored to affluent clients. In the world of 'private banking,' FIBI's commitment to exceptional service and expertise stands out, catering to a wide variety of clients.

Bank Yahav

Bank Yahav excels in delivering banking and financial services, emphasizing cost-efficiency and exclusive advantages for its clients. It represents a collaborative venture between Mizrahi-Tefahot Bank Ltd. and the Company for Economic and Cultural Enterprises. (Hebrew website)

One Zero

Introducing Israel’s inaugural digital or ‘neo’ bank, One Zero offers the ultimate financial management flexibility. With this platform, managing your finances via smartphone or computer is effortless and efficient, complemented by competitive fees, thanks to its optimized operational structure.

The Postal Bank

Functioning as a no-frills banking option, The Postal Bank focuses on offering streamlined account services. It does not provide overdraft facilities nor interest on account balances, yet it is celebrated for its minimal fees on banking transactions.

Credit Cards and Other Noteworthy Tips

Pay Attention - Your "Credit Card" may Only be a Debit Card

While credit cards are a staple in most wallets, it’s essential for Olim to grasp a crucial distinction – many “credit” cards issued in Israel are essentially debit cards. These cards operate on a monthly debit basis, with the freedom to select a convenient debit date from several options: the 1st, 2nd, or 10th of the month. These cards are typically offered by Israeli banks, automatically debiting the full outstanding balance or a set limited amount (subject to interest) from your checking account each month.

Negotiating Credit Limits

Prepare for a departure from your home country’s credit norms. Initially granted credit limits in Israel might appear relatively modest in comparison. Should you require more credit than your initial allocation, a simple call to your bank’s credit card department or an online request might secure a credit limit increase. Overdraft limitations are submitted automatically by most banks according to your financial status but are also negotiable

Installments - A Payment Puzzle

Installments (Tashlumim), a unique payment method in Israel’s banks, allows you to split a transaction interest-free or with very low interest over several months (sometimes up to 24 or even 72 payments) using your bank-issued credit card. Be mindful of potential fees imposed by your bank for this service.

However, although monthly payments might seem like the best option for large purchases, keep in mind that choosing this option, even when paid for monthly, will take up the total purchase amount on your frame. A pre-approval from the credit card company will be needed in order to pay through installments.

Contesting Charges and the Foreign Card Advantage

In contrast to the U.S., disputing credit card charges in Israel, unless fraudulent, can be a bit more challenging. Keeping your foreign-issued credit card on hand is a good idea. Some Israeli merchants accept foreign MasterCard, Visa cards and American Express cards.

Using foreign credit has its downsides: no installment payments (Tashlumim), and the conversion of Shekels to your card’s currency usually incurs fees.

While credit card companies frequently offer competitive exchange rates, a common drawback is the imposition of a 3-5% currency conversion fee, affecting the overall cost of transactions. A pragmatic, cost-effective solution is to carry a foreign credit card that either waives or minimizes currency conversion fees.

Bank Account Foreclosures - Unpaid Bills

The Foreclosure Process

The pursuit of delinquent municipal taxes In Israel takes a slightly more assertive stance compared to the U.S. When dealing with unpaid municipal or government-related bills such as property taxes, parking fines, Bituach Leumi payments, and similar dues, creditors wield significant authority. They have the power to initiate foreclosure processes (Ikul) or impose a restraining order on your account.

In simpler terms, your bank account could be frozen, allowing creditors to seize an amount equivalent to your debt. Notably, this action typically doesn’t require court approval. If you’ve received notices from creditors and overlooked or misunderstood them, it could eventually lead to the infamous foreclosure (Ikul). This serves as the creditors’ last resort, often leaving Olim bewildered as they navigate these unfamiliar terms in the financial landscape.

Prevention Measures

Olim, be mindful – overlooking municipal bills or other financial obligations could lead to unpleasant surprises. Here’s where a dash of proactive communication can work wonders. Most Israeli municipalities are open to negotiation before resorting to foreclosures. They are willing to explore payment plans that suit your circumstances or even consider reducing the bill to a more manageable amount. Remember, engaging with them before a foreclosure process (Ikul) could be your key to sidestepping financial complications.

Foreign Transactions

Navigating Foreign Funds From Overseas – Keep That Account Open

International Transfers

Venturing into the realm of transferring money from Israel abroad and vice versa is fast and easy. For instance, the Postal Bank enables its account holders to seamlessly transfer money from their bank account to an international bank account securely, conveniently, and straightforwardly without needing to visit the post office. Clients registered for digital banking can initiate a transfer directly from their online account or through the ‘Postal Bank account management’ application.

For bank clients not yet registered for this service, the process involves downloading the form in either Hebrew or English, completing it, and then submitting it via email to [email protected] or by fax to 02-5005300.

It is also important to emphasize that money-transferring services between accounts from Israel and abroad are available at any bank in Israel.

Here is a noteworthy tidbit: You have the option to hold foreign currencies in your Israeli account without converting them to Shekels, thereby sidestepping foreign exchange challenges. However, staying aware of the deposit and withdrawal fees associated with this convenience is essential.

Keeping your foreign bank account post-Aliyah and embracing online banking is highly recommended. Before making your journey to Israel, make sure your foreign account is set up for wire and ACH transfers, ensuring seamless access to your funds. It’s important to pack and bring your foreign checkbook along. To navigate the intricate process of sending foreign currencies overseas, consider keeping them in overseas deposits and transferring funds to Israel only when needed.

Receiving foreign funds in Israel may require a waiting period of a few days before they are credited to your bank account. You’ll need the IBAN (Mispar Zahav) of your Israeli bank account to facilitate overseas transfers.

Domestic Transfers

Transferring funds between Israeli bank accounts is a straightforward process. Standard transfers can be easily initiated through online platforms or bank tellers. However, your bank may require additional details for larger sums, as discussed earlier.

Decoding bank account IDs in Israel is simple. Each bank is identified by a 1 to 2-digit number, and each branch has a unique 3-digit code. The account number typically ranges from 5 to 7 digits, though it can sometimes be longer.

The major bank codes are as follows:

When it’s time to shuffle funds locally, these 3 sets of numbers, paired with the account holder’s name, are all you need. Usually, if a transfer is executed between 2 branches of the same bank, it might go through as a same-day transaction, provided you make the bank’s cut-off time. However, transfers between 2 different banks will usually clear only on the next business day. If you’re willing to incur an additional fee, an IBAN-powered transfer can guarantee same-day transactions.

Foreign Currency Conversion

The journey to Israel often includes a pit stop at the foreign exchange station, where converting your currency to Shekels becomes necessary. Choosing the optimal location for this financial exchange involves considering options such as banks, post offices, and money changers. Additionally, the foreign-issued credit card can be advantageous, but be cautious of hidden foreign exchange fees that may lurk in credit card transactions.

Among the options, money changers, especially those located beyond the airport and tourist zones, generally offer better exchange rates and quicker turnaround times. Yet, tread carefully and shop around, as competition is fierce. The golden rule: only deal with licensed and reputable money exchangers. Check current exchange rates here.

Money exchangers also act as intermediaries for converting foreign checks to Shekels, a service also provided by banks. However, cashing foreign checks at a bank incurs a 1-1.5% fee plus an exchange rate fee in addition to waiting time. To avoid this fee, consider keeping your foreign bank account and utilizing online banking, wire transfers, or prompt deposit transfers.

To wire or not to wire? That’s the question. Comparing wire fees with check-cashing fees is the name of the game. Fee percentages vary depending on the amount of the money transfer, where check-cashing fees could be lower than the latter.

In summary, planning your financial journey to Israel requires foresight. Navigating the banking landscape with information can assist you in avoiding unexpected surprises.


What you Need to Know

The tax system in Israel is applied on a personal basis. Income tax is calculated on a sliding scale, meaning the more you earn, the higher the tax rate. Israel has one of the highest tax rates globally, constituting approximately 25% of the average household income.

Individuals are taxed at graduated rates of up to 47% annually. The following rates, as of 2023, apply to income (the amount of income is stated in new Israeli shekels – ILS and may change from time to time):

  • Up to 81,480 ILS – 0%
  • From 81,480 ILS to 116,760 ILS – 10%
  • From 116,760 ILS to 187,440 ILS – 14%
  • From 187,440 ILS to 260,520 ILS – 20%
  • From 260,520 ILS to 542,160 ILS – 31%
  • From 542,160 ILS to 698,280 ILS – 35%
  • Any sum over 698,280 ILS – 47%
  • If the taxable income is over 698,280 ILS, an additional 3% taxation is applied

Tax Benefits for Olim

Olim Enjoy Special Tax Breaks
Embarking on the adventure of making Aliyah opens new horizons and introduces a touch of financial optimism. This is because the Israeli tax landscape offers unique benefits and perks for Olim who are embracing this exciting chapter of life. For example:

  • Reduced car taxation – New Olim can enjoy purchasing a car at a reduced tax rate within 3 years of making Aliyah
  • Tax discounts on shipping – The local Customs Authority offers tax discounts or exemptions on shipping household items and importing business equipment
  • Property tax discounts – In all Israeli cities and towns, Olim frequently qualify for substantial property tax (Arnona) discounts, typically ranging from 70-90% for properties up to 100 These discounts are commonly accessible during the initial 2 years following Aliyah, providing Olim the opportunity to benefit for a 12-month period.

Asset Management and Investing

Managing your investment portfolio in Israel

Making Aliyah can shift your perspective on life; in return, your outlook on economic sentiment may change. Being introduced to emerging Israeli companies and the general business landscape can reveal opportunities that you may not have considered in your home country. As an Oleh, your financial perspective can undergo a transformation. Therefore, it’s generally advisable to review your investment portfolio upon making Aliyah.

Tax Considerations

Tax considerations play a crucial role in shaping your investment strategy, particularly in connection to your residency status. Depending on your situation, it is advisable to capitalize on changes in your tax status to optimize both current and future tax rates on your investments.

For American investors in Israel, another crucial aspect to consider is the investment approach. While technically allowed to invest in mutual funds worldwide, it often becomes complex from a tax perspective due to the classification as Passive Foreign Investment Corporations (PFICs). As a result, foreign mutual funds can lead to substantial tax liabilities – sometimes as high as 60-80%. However, this doesn’t preclude investors from creating diversified portfolios with local financial institutions comprising of stocks, bonds, and other securities.

You can take charge of your portfolio independently or collaborate with professionals, including licensed Israeli portfolio managers, to tailor your investments to your unique circumstances. Keep in mind that some Israeli banks, unfamiliar with US tax regulations, inadvertently invest in mutual funds for American clients, potentially causing complications. Therefore, seeking professional advice is recommended if you hold Israeli mutual funds.

Asset Administration

Managing assets from overseas is becoming more intricate, especially with heightened banking regulations post-9/11 and limited local branch access. Sizeable transfers often require your in-person presence, and many US banks have requested non-residents to either close their accounts or transfer their dealings to separate management divisions.

Investment Portfolios

Typical portfolios often display a local bias in their asset distribution. Investment managers naturally gravitate towards domestic investment funds, denominated in the local currency, emphasizing local stocks. This home bias is a well-established trend with logical justifications and often valid motives. However, when considering a relocation from your home country, it’s wise to contemplate portfolio adjustments that align with your new locale, currency, and global exposure.

Investing in Israel

How can investing in the Start-Up Nation jumpstart your portfolio?

Warren Buffett, one of the world’s most highly respected investors, remarked on his acquisition of the Israeli company, Iscar, in 2006. He stated: “We live in a dangerous world as it is, and in the long term, the risk premium in Israel will not be different from the US’s.” While past performance cannot guarantee future outcomes, several compelling factors make investing in Israel an appealing prospect, particularly for Olim.

The Tel Aviv Stock Exchange

The TASE (Tel Aviv Stock Exchange – Habursa) is Israel’s primary index. You can invest in it via your bank or through a brokerage firm that is a member of the TASE.

Investing With Your Israeli Bank

When considering investing in the Tel Aviv Stock Exchange (TASE) through a bank, you’ll need to establish a dedicated investment account. While this can be arranged before or after Aliyah, the process is much easier once you’ve moved to Israel. This new account will be accessible alongside your existing account through the bank’s website.

Choosing bank-assisted investment involves a systematic process. Transactions within the investment account require your explicit approval. Accredited investment advisors within the bank can provide personalized advice based on your specific needs. However, the ultimate decision and responsibility rest with you, formalized through a signed agreement.

Clients retain authority over any alterations to their investment portfolio’s composition. While branches may occasionally suggest adjustments, it is advisable for clients to stay informed about market trends for timely decision-making.

It’s worth noting that banks do not charge fees for their investment advisory services; their compensation is derived from higher fees associated with other bank services.

Portfolio Managers

Banks operate under the constraint that all transactions in your investment account require your approval. Hence, they solely employ licensed investment advisors to offer tailored investment advice aligned with your preferences. However, a distinct avenue emerges through independent portfolio managers (menahalei tikim), with the capacity to oversee your bank account (as well as brokerage accounts). These managers, whether autonomous or associated with brokerage firms (operating independently of banks), are entrusted with the task of managing your funds. Collaborating closely, you outline your risk preferences, investment objectives, income prerequisites, and other choices, subsequently delegating the authority to them to make investment decisions on your behalf.

Brokerage Firms

Brokerage firms are an alternate avenue for direct investment in Israel. Like banks, they facilitate the administration of your assets, encompassing mutual funds and individual securities. Unlike banks limited to providing investment advice, brokerage firms (alongside independent portfolio managers) actively manage your finances.

Engaging with brokerage firms offers several advantages, including reduced transaction expenses and holding fees compared to banks. Additionally, they provide user-friendly web access and accessible phone support. However, it’s important to note that brokerage firms lack an extensive branch network spread across the country, unlike banks.


Borrowing Today for a Better Tomorrow

Whether you’re looking to open a business, purchase a new car or a home, or simply seeking to settle a debt, loans serve as the gateway to transforming your aspirations into reality. In Israel, the most secure avenue for loan applications is through your bank. However, prior to applying, it’s crucial to be mindful of the interest rates associated with the loan (halva’a).

While the primary criteria for loan approval is contingent on your cash flow, fostering a positive relationship with the staff at your bank can enhance your likelihood of securing a loan approval. In Israel, bankers prefer to have familiarity with loan applicants, so cultivating a personal relationship can influence the approval process.

Ogen - Loans for Those in Need

Ogen serves as a non-profit social lending organization committed to providing accessible credit solutions to lower income communities in Israel. It aims to offer interest-free loans to families and small business owners in the low and middle-income brackets. Ogen also provides an expedited loan application process.