How to open a bank account in Israel

Every Jew has the right to “make Aliyah” or move to Israel, and thousands do each year. It’s possible for non-Jews to move to Israel too. A key step in getting set up in your new country is the process of opening a bank account. Here’s a guide to what you need to know.

Can I open a bank account as a non-resident of Israel?

Yes, you can open a bank account even if you aren’t an Israeli resident. Many Israeli banks offer “non-resident accounts” to people who live abroad. Your eligibility will depend on whether you meet the criteria the banks set, including the number of days spent in Israel per year. What that means is the process may have a few more bumps in the road than usual. If you’re on the verge of making your move to Israel permanent, it’s likely more efficient to hold off and get a resident’s account once you’re there.

What’s the process? How long does it usually take?

Once you’ve selected which bank you want to go for – more on that later – you’ll nearly always need to go there in person. You shouldn’t need to make a special appointment, but do make sure to allow yourself enough time - it can take a while to get everything signed and authorised. You’ll then receive all the standard information before you’re fully set up – cards, instructions for online and telephone banking, and so on. The time it takes will vary, but don’t expect to have everything in order by the end of Day 1.

Strange as it might sound, you should try and get to know your bank manager. A lot of Israeli banking is still done at your local branch, so it’s handy to have a familiar face there.

What documents are necessary for a foreigner to open a bank account?

Be sure to come prepared: there’s a lot of paperwork, and many boxes need to be ticked if you’re a foreigner opening a bank account in Israel. Bring the following with you:

• Your passport.
• Your teudat zehut or resident identification card, as well as your teudat oleh, the document that certifies your status as a migrant making Aliyah. If you don’t yet have your teudat zehut, check with the bank to see if you can do it with just the teudat oleh.
• If you’re coming from the US, you’ll need your social security number.
• The “Note of Future Bank Account” you should receive at the Israeli airport on arrival. The bank will stamp this, which will help you get registered with the Misrad Haklita (Ministry of Aliyah and Integration).
• Some money – either cash or a cheque – to open the account with.
• If you’re opening a joint account, you’ll need to bring along your spouse. Both of you will need to be there in person.

Can I open a bank account abroad? What about at least online?

To open an Israeli resident’s bank account, you do need to provide information about your residency in the country. Usually it’s obligatory to visit the bank in person, too – so this isn’t something you’re likely to be able to do before you get there. You’ll probably have to sit tight until you make the move.

Israeli banks offer all the online services you’d expect, and some have even made it possible to open an account online without visiting a branch in person. You’ll still be subject to the same range of checks, though, and that may include a video call with someone who works there.

If there are complications in your particular case, the Nefesh B’Nefesh organisation might be able to provide assistance with setting up a bank account, as they will for any aspect of the Aliyah process.

What fees are involved?

This is an important question to ask in Israel - as local banks charge for most services they offer.

Here’s a rundown.

ATM fees

A withdrawal fee is standard at ATMs. It may vary depending on the amount being withdrawn, and banks may offer new account holders a lower fee or even no fee at all for a while. You should also pay attention to the maximum amount you can withdraw, as this can be relatively low. If it is, try and stagger withdrawals as best you can.

Another thing to watch out for is a service that offers to charge you in your home currency. Although it can feel tempting to be able to see the amount displayed in the currency you’re used to without having to do the mental math to calculate approximate exchange rates, it’s not a great idea. If an ATM or card provider charges you in a currency other than the local one - shekels in this case - it’s something called Dynamic Currency Conversion (DCC). And what that means for you is accepting the machine’s proposition which gives the Israeli ATM the opportunity to give you its own exchange rate, which is nearly always quite poor. This means you lose money with the poor rate and they gain it at your expense.

Of course, there are also plenty of fees involved if you use a foreign card at an ATM in Israel.

Bank fees

Don’t think you can escape ATM charges simply by going up to a bank counter. You’ll still be charged for the transaction – more, in fact, because it costs more to deal with staff than with a machine. Also, if you’re simply asking a bank that you don’t have a relationship with to change cash for you, you’ll be subject to their exchange rates. Which are likely to be unfavourable.

If you open an account with a bank, you’ll still have transaction fees. Lots of them, in fact. These are exactly what they sound like: fees on transactions that take place in your account. Fees for overdraft protection, monthly fees for your credit card, the cost of a cheque book, and even a monthly fee just for having the account. Though not quite as bad as it sounds, the monthly fee is the minimum amount you’ll pay the bank each month – so if you regularly use your account and rack up other fees, it tends to get absorbed by the other fees you build up.

Try to minimise your bank fees each month

Because there are so many fees, it’s important to grasp how they work, and how you can reduce the bill as much as possible.

• Everyone has to pay a monthly fee, which acts as the minimum amount you pay the bank per month – you’ll have to pay this even if you don’t use your account at all.
• Assuming you do use your account, the cost of the first few transactions you make will be absorbed into your monthly fee. It’s after you’ve exceeded this fee that you start paying extra.
• Ask about the bank’s “track service”. With it you can pre-buy little packages of services in bulk at a discounted rate. So if you’re planning on more than a certain number of transactions per month, buying this package can save you cash. The Bank of Israel has a nifty Excel spreadsheet you can download, which can do the mathematics for you - you can also dive a bit more into the specifics of Israeli banking fees.
• Think carefully about whether you use a credit or debit card. It’s counterintuitive, but because credit cards cost a fixed amount monthly, they can work out to be cheaper than debit cards, because you pay for each debit card transaction you make.
• New arrivals in the country may be eligible for discounted rates from the bank – make sure to ask your manager about this when you get set up. This’ll only be for a few months, though.

Fees for international transfers

This is a problem that’s not so unique to Israel: when sending or receiving money from abroad, you’ll often be faced with a bewildering range of costly options - some more clearly spelled out than others. You’ll be charged for making international transfers at banks, just like you are for exchanging money in Israel. Be wary: banks generally offer exchange rates that work in their favour, rather than the real, mid-market exchange rate you’ll find on Google or XE.

Sending money out of Israel through a bank can be a complex process because of taxation where you’ll have to confirm you don’t need to pay Israeli tax on the money you’re transferring out. To get a better idea on your specific transaction, you’ll probably need to talk to your bank about this.

Once you’ve got your bank account set up – or even before, if you know someone who’s already there - consider using Wise to move your money into Israel. Wise uses the real mid-market rate and a simple upfront fee, so you always know exactly what you’re being charged. Money is held in local bank accounts to cut out on normal international banking fees, which makes it cheaper for everyone. It’s a great way to get your money from A to B, without any nasty surprises.

Which bank should I choose?

The top 2 Israeli banks, Hapoalim and Leumi, control around 60% of the market on their own, and 5 main banks control the bulk of the market share. There are other options, though - the Bank of Israel has a comprehensive list if you’re keen to use a smaller institution. International banks operate in the country, too – Barclays, Citibank and HSBC, among others – but generally for businesses rather than individuals.

In Israel, having a conveniently located branch is something still valued, so when choosing your bank think carefully about its locations and if they fit with where you’ll be living and working. Do also research fees, and you might want to stick your head round the door and get a feel for the place as well – don’t underestimate that personal touch.

Most banks do have English-language websites, but the sites are often limited compared to the Hebrew versions. To get serious stuff done, either use the Hebrew version of the site or find yourself a bank manager who speaks English. Many do, especially in big cities.

Here are the top five:

• Hapoalim
• Leumi
• Discount Bank
• Mizrahi Tefahot
• First International

Hapoalim

The largest Israeli bank, Hapoalim has been operating since 1921. It scores high for convenience, with a great many ATMs and branches around the country. Fees are competitive and they do offer a discount for Olim (immigrants).

You can open an account with Hapoalim online if you’re willing to waive that personal touch.

Leumi

Bank Leumi is similar in size to Hapoalim. Its history goes all the way back to 1902. Today it offers a range of different accounts, including one for employees – so this might be a good option if your job is already sorted out. Also among the products it offers is a non-residents account specifically intended for tourists.

Leumi also offers customers the chance to open an account online.

Discount Bank

Israel’s third largest bank has a long history, too, dating back to 1935. Its subsidiary, Mercantile, is also a major bank in its own right, with account options for young people, soldiers and other groups. Discount offers deals for new joiners.

Despite the name, it’s not a no-frills budget option but a serious bank in line with its competitors.

Mizrahi Tefahot

Another venerable institution, Mizrahi Tefahot today prides itself on flexible customer service including online and telephone options. It’s also the country’s leading mortgage lender, so it’s worth checking out if you’re considering buying property.

First International

The country’s fifth largest bank specialises in business accounts and premium accounts for high-net-worth customers. Many banks have “private banking” options, but this is a First International (FIBI) speciality.

Wise

Though it’s not a bank, when you’re transferring money into Israel, Wise can offer you the real mid-market exchange rate and a simple upfront fee, saving you a ton of unnecessary hidden costs and minimising hassle.

And even before you’re registered with an Israeli bank account, through a Wise Borderless multi currency account you can hold and manage your money in Israeli shekels – as well as another 28 currencies – shielding yourself against unexpected fluctuations in exchange rates. There are no hidden costs for this, either. Also, coming in early 2018 borderless consumer debit cards are set to be released.

Moving abroad is never simple, but with Wise moving your money doesn’t have to be so tough. There are some bank fees that you really don’t have to pay.