Jerusalem Bank Launches New Deposit Tied to Construction Costs Index

Jerusalem Bank has introduced a new savings product called "Construction Inputs Deposit," designed to protect prospective homebuyers in Israel from fluctuations in the construction costs index. This is the only deposit account in Israel that allows private clients to link their savings to the construction inputs index, which is often used to update future payments for new apartments.

Many new apartment sales contracts include payment schedules tied to the construction inputs index. This means that buyers might hold funds for future payments while the amount owed to the contractor could increase if the index rises. The new deposit aims to mitigate this risk by linking the funds intended for these payments to the same index, thereby reducing exposure to index-related changes.

The deposit is for a one-year term and offers full exposure to the construction inputs index. Customers can withdraw their funds at any time with 35 days' notice, allowing them to align their savings with their apartment payment schedule. The savings amount is adjusted according to index changes, and upon withdrawal, the customer receives the full accrued linkage differences based on the latest published index relative to the base index at the time of deposit.

Data shows the residential construction inputs index rose by 5.1% during 2025 and an additional 2.3% from the start of 2026 until July. This contrasts with a 2.6% rise in the consumer price index in 2025 and a 1.4% rise in the same period of 2026. Ofir Ohana, Deputy CEO of the Retail Division, stated that the deposit is an innovative product addressing a significant household expense and aims to reduce risk for funds designated for future apartment payments, expanding the bank's offerings in housing and finance.