Israeli Banks Increase Fees as War-Era Relief Ends

The average monthly cost for maintaining a checking account and holding a debit card in Israel rose to 31.5 shekels in the first half of 2025, up from 29.1 shekels in 2024. This annual increase amounts to approximately 378 shekels per account, with household expenses being higher due to multiple accounts. The rise is attributed to the conclusion of war-time fee relief measures.

While banks are mandated to publish uniform fee schedules, actual charges can vary. Fees for teller-assisted transactions range from 4 to 6.8 shekels, compared to 1.2 to 2 shekels for direct channel transactions. The Banking Supervision Department notes direct channel use is about 70% cheaper. However, a package of one teller transaction and ten direct channel transactions, priced at 22-26 shekels on the schedule, is often charged between 9 and 16 shekels to customers not enrolled in specific plans, indicating banks offer significant unadvertised discounts.

Interest rates on overdrafts are also a significant cost. With the Bank of Israel's base rate at 3.25% and prime rate at 4.75% as of September 3, 2026, maximum interest on overdrafts can reach 13.85% within an approved line of credit and 16.35% for exceeding it. For accounts without an approved line, the higher rate applies to the entire overdraft. Increasing an approved credit line for customers who are consistently overdrawn can yield greater savings than negotiating teller fees.

Customers can access annual reports detailing their bank fees and interest charges through their online banking portals or by request. These reports are crucial for negotiating with banks, allowing customers to present concrete figures of their past spending and compare them with offers from other banks. Customers are advised to request fee reductions, lower risk premiums on credit lines, and adjusted credit limits, ideally for a fixed period with a follow-up reminder.

Future changes include a cap on immediate debit card fees at 7 shekels per month starting October 1, 2026, and the elimination of certain services. On July 1, 2027, a new 'payment account management' service will replace current plans, with a regulated monthly fee of up to 10 shekels for the first 100 transactions, and a simplified fee structure thereafter. This new service will automatically enroll all customers and eliminate the distinction between teller and direct channel transactions.