Banks and the banking system of Israel

A foreigner planning to visit Israel as a tourist or become a repatriate, it makes sense to think about opening an account in one of the country's financial institutions. While for indigenous people this is simply a necessity, for citizens of other countries, banks in Israel will be a safe place to store their earned money. The country's legislation guarantees the safety of deposits, thanks to which Israeli credit organizations are attractive to many citizens of the post-Soviet space.

Banking system of the State of Israel

The structure of the state banking system is two-tier. The role of the regulator is assigned to the Bank of Israel. It was created in 1954.

At the second level are commercial financial institutions.

The main functions performed by the Israeli banking system are related to:

• management of investment and savings funds. The system plays the role of their guardian;
• management of clients' securities. Here she acts as a custodian, distributor and dealer of these assets on the stock exchange.

Central Bank of Israel

The Bank of Israel is endowed with exclusive rights to issue monetary units into circulation, and is obliged to provide financial support to the government. And in the international arena, he has the status of the country's agent in resolving issues related to public debt.

This organization also deals with:

• regulation of the activities of credit institutions, including branches and representative offices of foreign banking structures;
• implementation of monetary policy;
• refinancing of banking institutions;
• the conduct of monetary policy.

But the main goal of the Central Bank is the stability of the national currency - the shekel.

Leading Israeli banks

Many immigrants are probably familiar with the opinion that you can choose any Israeli bank, since they are all the same plus or minus. But this thesis has the right to life only to a certain extent.

In particular, each financial institution offers its own conditions, which may be more beneficial to individual clients or business representatives, or, which also happens, neither one nor the other.

Even the opening hours of banks in Israel are different. For example, some are closed on Fridays and others on Sundays. And it is not even common for everyone that on weekends and holidays, customers are not allowed to enter the bank.

Let's take a closer look at the credit institutions in which the local population has opened the largest number of deposits and settlement accounts.

• Bank Hapoalim. Translated from Hebrew, this phrase means "Bank of workers". It was founded in 1921. Now Bank "Hapoalim" is the largest monetary organization in Israel. Historically, the specialization of some of its branches is servicing the current accounts of Russian-speaking clients - both residents and non-residents of the country.

In total, about 270 offices of this bank function within the state and beyond its borders. For example, at the beginning of 2021, bank Hapoalim Israel in Jerusalem is represented by 5 branches. Their clients enjoy such advantages of the bank's exclusive credit cards as large discounts, as well as the opportunity to receive, in addition to the already existing, a number of benefits. In addition, the customers are provided with the latest tools, for example, Internet banking, which helps to more competently conduct financial activities.

• Leumi Bank Israel. Translated as "National Bank". It was founded in 1902 in London and is currently the second largest financial institution in Israel. This oldest bank is active in all segments of commercial banking, including mortgage lending.
• IsraelDiscountBank. The third largest Israeli financial institution. His services include providing consumer loans and long-term housing loans. The work schedule of Discount Bank clearly demonstrates that in order to attract customers, credit institutions of this country can deviate from generally accepted traditions. So, a number of its branches work on holidays. True, only until 12:30. But they open these days, as expected - at 8:30.

• Mizrahi-Tefahot Bank. It is the fourth largest financial institution in the state. Bank "Mizrahi-Tfahot" was founded relatively recently - in 2004 - through the merger of credit organizations "Mizrahi" (founded in 1923, in translation means "Vostochny") and "Tfahot". Specialization - long-term housing loans. Actually, of all participants in this sector of the Israeli financial market, this bank is the largest.

The Mizrahi-Tfahot group also includes Bank Yahav in Nahariya. He provides individuals with all types of services that match his profile. The clients are mainly households and employees from various industries. A large number of branches of this bank have been opened throughout the country.

• "Beinleumi". This bank is the only credit institution in Israel that has created a subsidiary specializing in providing VIP-services to wealthy clients. Experts recommend that non-residents of the country in 2021 resort to the services of HaBank Hbinleumi (the full version of the writing in English of the bank "Beinleumi") first of all. By the way, in January of this year, he absorbed the bank "Otsar Ha-Hayal", buying back its shares for 340 million shekels. Of the 740 employees, it is expected that the majority will lose their jobs at the headquarters of the acquired lending institution.

Other financial institutions

The list of banks in Israel includes other financial institutions as well. But most of them operate under the control of the above-mentioned monetary structures. For example, consider just a few of them.

• Bank Igood. Year of foundation 1951. Among the credit institutions of the country in terms of the scale of banking activities, this bank is in 7th place. Serves both operating businesses and individuals. 1,300 specialists work at Igud Bank. In 2021, Mizrahi-Tfahot bank bought 75% of its shares for 1.4 billion shekels.
• Post Bank in Israel. This independent state institution provides its clients with the most profitable services in terms of commission fees. There is no fee for opening an account with the Post Bank. And carrying out operations is subject to reduced commissions. In this financial institution, you can carry out all the necessary procedures, for example, withdraw money from the account using a magnetic card ("kaspomat"). But loans are not issued in the "Post Bank".

Other banks controlled by large credit structures:

• U-Banc. "Daughter" Beinleumi.
• Poaley Agudat Bank. It is also a subsidiary bank of Beinleumi.
• Dexia Israel Bank.
• Bank "Yahav le-Ovdey ha-Medina". It is the property of Mizrahi-Tfahot (owns 50% of shares), the trade union of civil servants and the state.
• Bank Massad. Owned by Beinleumi (51% of shares) and the teachers' union.
• Bank "Mercantile Discount". "Subsidiary" of Bank "Discount".

Branches of foreign banks

It must be said right away that there are no representative offices of Russian banks in Israel. That is, the offices of, for example, the same VTB 24 or Tinkoff Bank and even the ubiquitous Raiffeisenbank here will not be found by a tourist.

Branches of the following foreign credit organizations have been opened in Israel:

• Barclays Bank. It is one of the largest financial conglomerates in the world.
• State Bank of India. This financial structure serves more than 250 million clients. Approximately 3,900 branches of this bank have been opened in 67 countries around the world;
• It is part of a giant international corporation in the financial services industry.
• BNP Paribas.This organization is the European leader in the global market for financial and banking services.

The management of the largest Russian financial institution does not plan to open a branch of Sberbank in Israel in the near future. Its head, Mr. German Gref, explained this approach by the fact that during the period of economic sanctions it is very difficult to do this due to threats to currency transfers. Sberbank's activities will focus on countries in which the bank is already present. And in general, the financial establishment of the Promised Land is wary of "outsiders."

Those who are worried about whether a Sberbank card is valid in Israel should know that it is possible to withdraw money from an ATM using it. Only this operation is accompanied by the collection of a commission. When issuing a card, it will be useful to ask a Sberbank employee if additional activation of this plastic means of payment is required for use in Israel. And of course, it is more profitable to start a card with an interest-free withdrawal.

Also, Alfa-Bank did not open its branches in Israel. But here a slightly different situation is observed. The fact is that Russian bankers have heard a lot about the power of Jewish financial clubs and therefore are trying to get closer to them. The goal is to establish personal contacts with the world's leading money-makers. It is not surprising that Mikhail Fridman, who is the chairman of the supervisory board of the international consortium "Alfa Group", became vice president of RJC (abbreviation for the Russian Jewish Congress). A thread stretches from this organization to the AGE (World Jewish Congress).

Credit card companies

Tourists may be interested in what cards are accepted in Israel. You can travel to this country with MasterCard and Visa plastic payment instruments of any type - Classic, Gold and Platinum. Any mall also accepts Maestro and VISA ELECTRON cards.

But in the last 2 years, Israeli banks began to massively offer customers plastic means of payment with slightly different characteristics - rolling credit cards. For example, the Active Card from digital financial technology leader CAL provides customers with the ability to define:

• how much money will be withdrawn from his current account every month;
• the amount of money to be redistributed for the next months.

Thanks to such a card, its owner can intelligently manage his budget.

The same opportunities are received by a citizen who has issued a Leumi Card. But additional benefits are added to them. For example, holders of Platinum and Zahav international credit cards are provided with free insurance for 5 days when traveling abroad.

Isracard is an equally popular plastic means of payment that allows you to make profitable credit decisions in combination with flexible payment options. In early 2021, this firm offered its clients to “turn minus into plus”. We are talking about replenishing a negative bank account with funds from a card account. This effectively means that the client's debt is transferred to Isracard. But it is far from a fact that the minus in the bank will be greater than the cost of such a loan.

In 2021, Eurocheque International and Eurocard International merged. The result was the Europay International organization. The cards it issues are also accepted in Israel.

In 2021, Bank Hapoalim launched a plastic payment instrument called Poalim Express. But it was like a simple rebranding of American Express Isracard and Mastercard credit cards.

There is another credit card issuer - Diners Club Israel. Her cards are accepted almost everywhere in Israel.

But to ensure that there are no problems on the trip, the traveler must have several payment instruments: travelers checks, cards and cash.

ATMs, cash and financial transactions in Israel

ATMs in Israel allow you to cash out the currency of some countries of the post-Soviet space. You can also change money at local bank branches. But at the same time, it is necessary to take into account the peculiarities of their work schedule.

If ATMs are located at a considerable distance from the office of a credit institution, about 5 shekels are charged from the client for services. Therefore, it is recommended to carry out the cashing procedure through such devices at banks.

It is not recommended to carry out large money transactions with cards in crowded and popular places. Here tourists can face unexpected "surprises" in the form of unprofitable courses or hidden fees.

Many travelers are interested in whether it is profitable to pay in Israel with a ruble debit card "Visa". It is not profitable. The fact is that the main currency of the Visa payment system is the US dollar. Therefore, when buying goods with such a ruble card in Israeli stores, currency conversion is carried out according to the ruble-dollar-shekel scheme. That is, an intermediate operation is added, during which funds are lost. In addition, the card issuing bank itself charges a commission of about 1.5% of the transaction amount.

Another important question: how to put money on a card in Israel. In a bank branch, this can be done in two ways: in cash at the cash desk or through terminals with the cash-in function. In connection with the globalization of the Internet, it became possible to conduct this operation remotely. And not only from an account, for example, in Sberbank to an Israeli bank card, but also through electronic payment systems, in particular, WebMoney or PayPal.

It is worth remembering about such a service as bank cells in Israel. It can be useful for repatriates living in a rented apartment. In such cells, you can store valuables, money and important documents. The cost of the service depends on the size of the rented safe. A small cell will cost about NIS 850 / year. You will have to pay about 2000 shekels for an annual rental of a large safe.

How to open a bank account in Israel

To open an account with a bank in Israel, a foreigner must personally appear at the chosen financial institution and provide the following documents:

• repatriate certificate;
• identity document;
• payment order to open an account. Issued upon arrival at the airport;
• documents confirming the legality of the origin of money;
• at the request of the bank, additional papers (rights, foreign passport, etc.).

If the bank employee does not have any comments on the documents, the amount required to activate the account is entered. Then you need to agree on the order of a magnetic card and bank checks. Then access to the Internet banking service opens. And the final stage - checking the completion and certification with the seal of the form received at the airport.

For some new immigrants, the question is how you can open a debit card in Israel. But there are no special problems here: such a means of payment is issued when opening a current account with a bank.

Savings accounts in Israeli banks

You can get passive income by making a deposit in one of the Israeli credit institutions. There are also savings programs. They differ in that it is allowed to constantly add funds to those already on the account.

Interests on deposits in Israeli banks, depending on the term of placing funds, fluctuate in a very wide range. For example, in Bank Leumi the numbers look like this:

• term 1 month - interest rate 0.02%;
• 6 months - 0.06%;
• up to 12 months - 0.10%

Currently operating savings programs and deposits are divided into 2 types:

• "Madad" - the interest is linked to the price index;
• "Prime" - tied to the average percentage of the Bank of Israel.

Income generated by deposits in Israeli banks is taxed. Specific figures for the rates of fiscal fees are as follows:

• type of deposit "Madad" - 15%;
• deposit of "Prime" type - 10%.

How to transfer funds from / to Israel

You can export from Russia to Israel without declaring an amount not exceeding $ 10,000 (35 thousand shekels). In general, experts recommend using the following approach: move in cash the maximum amount of money allowed without declaring. And all that is from above, place in one of the large banks, "linking" to the account a card of the international system MasterCard or Visa.

There are several ways how to transfer money from Israel to Russia. Without declaring, it is allowed to take out in cash no more than 50 thousand shekels (approximately $ 14,300).

You can perform such an operation with a larger amount as follows:

• an Israeli citizen draws up a card in his own name;
• this means of payment, together with the PIN-code, is transferred to the Russian citizen;
• to withdraw money, the card is inserted into an ATM and a PIN code is entered;
• a resident of Israel sends an SMS message to the Russian citizen with the received transaction password, after entering which the ATM dispenses funds.

To legitimize such manipulation, the official cardholder must issue a power of attorney for the recipient of funds.

Lending in Israeli banks

Credit institutions of the Promised Land provide financial services to a wide range of clients - retirees and civil servants, businessmen and employees. And even people living outside the country can purchase a suitable property by taking out a mortgage loan in Israel.

Mortgages for foreigners in Israel

Banks issue a long-term home loan in Israel for Russians on the following conditions:

• loan amount - no more than 50% of the value of the acquired property;
• the potential borrower provides the financial institution with information on the level of income per month. The amount of monthly mortgage payments must be less than 30% of this income;
• loan maturity - up to 30 years;
• the borrower's age is at least 18 years old. There is no maximum age at full redemption.

Before deciding to acquire your own home using borrowed funds, you need to know how much interest on mortgages in Israel for repatriates is set on average by the banks of this country. The fact is that for clients with a dubious credit history, the size of this indicator can reach 7%. Usually it fluctuates in the range of 2-4%.

Rating of Israeli banks

According to the results of the reporting for 2021, experts formed a rating of Israeli banks. Below are its top 5 positions with some numbers.

• Bank Leumi. Profit for the first 6 months of 2021 amounted to 1.63 billion shekels.
• Bank "Hapoalim". In the third quarter of 2021, profit was fixed at 950 million shekels.
• "Mizrahi-Tfahot". In the third quarter of 2021, the net profit amounted to 454 million shekels.
• Bank "Beinleumi". In the first 6 months of 2021, he earned 317 million shekels in net profit.
• Discount Bank. For the II quarter of 2021, he earned 276 million shekels in net profit.

Conclusion

Almost every major bank in Israel is a series of integrated institutions of the corresponding profile of activity. Any of them has at least one hundred branches in the country.

Banks in Israel are traditionally conservative. Therefore, despite the seeming simplicity of the procedure, a non-resident of the country will have to spend a lot of effort to open a current account.