Digital Bank One Zero Raises Fees, Signaling Shift in 'Free Banking' Model
One Zero, Israel's first new bank in over 40 years, will implement a series of fee increases starting mid-July 2026, marking a significant departure from its initial 'free banking' promise. The foreign currency conversion fee on its free plan will rise from 2% to 3%. Other new or increased fees include 7 shekels for an instant debit card, 15 shekels for card replacement (up from 10), 45 shekels for early loan repayment (up from 10), and 150 shekels for a lawyer's letter (up from 40).
Despite these changes, One Zero reported strong growth in 2025, ending the year with 180,000 customers, a 39% increase, and doubling its revenue to approximately 110 million shekels. The bank also reduced its net loss by 20% to 214 million shekels. The fee adjustments highlight that even digital banks must eventually price their services, albeit differently. One Zero operates on a subscription model, with a free 'ZERO' tier, a 'ONE' plan at 49 shekels per month, and 'ONE+' at 89 shekels. Customers maintaining a monthly deposit of 10,000 shekels receive 'ONE+' for free, with a lower threshold granting free access to the 'ONE' plan.
According to Bank of Israel benchmarks for late 2025, One Zero showed zero fees across four categories, contrasting sharply with the average household's monthly banking costs. The bank is also offering a promotional deposit rate of 6% for up to 100,000 shekels to new customers who meet specific salary transfer and spending requirements. A Bank of Israel survey in early 2026 indicated high customer satisfaction, with 78% of One Zero customers recommending the bank, compared to 56% across the entire banking system. Customers also expressed higher satisfaction with cost reduction and service compared to traditional banks.
Meanwhile, Bank Ashrai, which received its license in late 2022, operates on a different model called 'equal distribution,' returning half of the interest income generated from checking account balances to customers, with no management fees or salary transfer conditions. However, its offerings are limited, excluding mortgages, securities, and foreign currency transactions. A potential acquisition by Isracard, valued up to 500 million shekels, fell through in July 2026. Pepper, a digital brand of Bank Leumi, offers basic checking account fee waivers and 24/6 chat support, functioning as a full account within Bank Leumi. Traditional large banks still hold advantages in areas like physical branches, ATMs, and mortgages, which digital-only banks often lack.
