Opening a Bank Account
Why open a bank account?
If you will be earning a shekel salary, having a bank account is a no-brainer. But what if you don’t foresee having shekel checks to deposit?
You are not required by law to have an Israeli bank account. However grants and refunds from certain government bodies – Bituach Leumi and Arnona, for example – cannot be processed without one. Having a bank account also gives you the option of setting up automatic bill payments.
Due to new IRS regulations, Israeli banks have become considerably less accommodating to foreign citizens. Some banks refuse to deal with foreigners; others demand large initial deposits; others will open accounts but without student discounts on fees. If you are a foreign citizen, you may have difficulty opening a bank account in the first few places you try. Don’t give up! Speak to managers. Negotiate plans. Try the main branches of smaller banks you’ve visited. Ask friends who recently opened bank accounts where they were successful. You may want to consider Bank HaDoar, which is a viable option for many people (see end of this article). Do not hesitate to call Chaim V’Chessed for up-to-date tips and guidance.
What you need to open an account
No matter which bank you use, the following documents are required:
- Teudat zehut, or foreign passport with a valid visa
- Two forms of photo ID (e.g. passport and driver’s license)
- Tax identification number in country of origin: Social Security number, National Insurance number, etc.
- For a student account: Letter from yeshiva or institution stating that you are their student, period of study, study hours, and stipend paid per month
- For a joint account: Marriage license
- Proof of income in Israel, if applicable: Three most recent tlushim (pay stubs)
- Some banks offer foreign currency accounts. Furthermore, some shekel accounts allow you to deposit foreign currency into them, though you will only be able to withdraw the funds in shekels.
- Most banks charge monthly service fees in addition to individual transaction fees. There are other accounts that charge a flat fee per month, which includes unlimited transactions.
- Ask whether there are special offers for those opening a new account; very often there are.
- Specials for students (no monthly payments, discounted or free transactions) might be available with the correct ishur from a yeshiva.
- Online accounts or phone/fax agreements: make sure to set up an online account or a phone/fax agreement that allow you to make transactions without visiting the bank.
In Hebrew, an ATM is called a Kaspomat or Snifomat. ATM cards are generally offered when opening a bank account. You can withdraw money from any ATM machine in the country at a minimal charge. You can also use a foreign bank card to withdraw shekels from an Israeli ATM, but in this case there is usually a charge from both the foreign bank and the Israeli bank.
Cashing Foreign Checks
You can deposit foreign currency checks into many Israeli bank accounts and hold it in that currency until needed. There are fees for a foreign currency deposit. At times, it can take several weeks for checks to clear and for the funds to be available. You can also cash foreign currency checks through a money changer.
The benchmark exchange rate is called the shaar hayatzig, which is set every banking day by the Bank of Israel. This rate is set somewhere between the buying and selling rate of the foreign currency. You can find out the exact rate by calling 02-373-2000 (Hebrew only) . Banks convert currency at a lower rate than the one posted daily. They also charge commission fees for all conversion transactions. It is better to convert larger amounts at one time to avoid bank charges. Money changers usually convert currency at 0.5%‒1.5% off the shaar hayatzig, which is sometimes significantly better than bank rates.
Wire transfers are the most efficient and economical way of transferring large sums of money from abroad into an Israeli account. You can make wire transfers from abroad directly to your bank account. Money changers often offer better transfer rates than banks do.
Your water, telephone, gas and electric bills, among others, can be paid in person at the bank for a nominal fee. You can also set up hora’at keva, automatic payments, to be paid through your bank account. There may be a one-time charge for initiating this service.
The bigger foreign exchange companies offer many of the same services as banks, including check cashing and wire transfers. As mentioned above, they can save you substantial amounts of money in many instances, particularly when transferring or changing larger amounts; i.e. when buying an apartment or car. It is important to use only reputable companies.
Opening a Checking Account with Bank HaDoar
What is Bank HaDoar?
By now you might have noticed that the Israeli post office is busier with more than just mail! In Israel, the post office also provides certain banking services, which is why lots of bills are paid there. You can even open a low-cost bank account with the post office. The post office bank is called Bank HaDoar.
Bank HaDoar’s basic banking services include withdrawals and deposits, foreign currency transfers and transfers to other banks at somewhat discounted rates. There is no interest granted and no savings plan option. Since most standard banks do not offer student discounts to foreigners, Bank HaDoar has become an even more popular choice. However, the limited services of Bank HaDoar as compared to standard banks may make it less worthwhile.
Where do I go?
To open a checking account in Bank HaDoar, visit a main post office branch. Privately operated branches do not provide this service. Once your Bank HaDoar account is open, you may perform transactions at virtually every doar branch, including the privately operated branches.
Main branches in central Jerusalem include:
- Yaffo 217 (near Tachana Merkazit)
Sunday – Thursday 8:00 am-5:00 pm
- David 7, Shuk HaBucharim (near Meah She’arim)
Sunday, Tuesday, Thursday 8:00 am-8:00 pm
Monday and Wednesday 8:00 am-1:30 pm
Friday 8:00 am-12:00 pm
You may now schedule an appointment online before visiting the post office for any purpose, including banking, which lets you cut the line when you get there! Visit the online post office appointment page.
What do I need?
Bring your teudat zehut or passport with valid visa, marriage license (if applicable), and Social Security/National Insurance Number (if you hold foreign or dual citizenship). You will be asked to fill out a form requesting a new account and pay an opening fee, and you will then receive a bank account number. If you have a restricted or foreclosed account at a different bank, you will not be able to open an account.
Only those who are 18 years or older may open accounts in Bank HaDoar. To open a joint account, both spouses must be present.
To order checkbooks, you must first deposit a one-time sum of 1,000 nis into your account. The checkbook(s) will be mailed to you within two weeks.
There is a fee charged for nearly every transaction. Check clearing takes seven days, which can be a tremendous drawback. Money can only be withdrawn from your branch with proof of ID. There is also a fee charged for an account that is inactive for six months.
As mentioned above, Bank HaDoar does not have a savings plan option and they do not pay interest on accounts. Additionally, there is no overdraft; if your account is even one shekel too low, your checks will bounce.
For a monthly fee, Bank HaDoar offers a debit card that can be used to pay for purchases at stores and to withdraw money from bank machines.
Bank HaDoar Contact Information
24 Hour Automated Banking and Customer Service (with an easy-to-use English menu)
This service allows you to check your balance, review transactions or get information about services.
Live Customer Service Hours:
Sunday‒Thursday: 8:00 am‒6:00 pm
Friday and Erev Yom Tov: 8:00 am‒12:00 pm