Bank of Israel Overhauls Fees, Cuts Costs for Debit Cards and Checks

Starting Thursday, the Bank of Israel's reform on current account fees will begin its first phase, significantly impacting debit card charges. The monthly fee cap for debit cards will be set at NIS 7, down from the current average of NIS 9. With approximately 1.8 million debit cards in use, this reduction is expected to save consumers tens of millions of shekels annually. The banking regulator is also eliminating several outdated fees, including those for account tracing and inheritance processing. Notably, checks returned for technical reasons will no longer incur fees for the issuer. The cost for modifying mortgage repayment dates will be capped at NIS 5 for the first four changes per year. However, starting in July, the automatic three-year debit card fee exemption for new accounts will be abolished.

The second, more substantial phase of the reform is slated for July 1, 2027. This phase will shift from per-transaction fees to a fixed monthly "account management" service fee, applicable to all customers without requiring active enrollment. Customers will pay a maximum of NIS 10 per month for a package of 100 basic transactions. Those making two or fewer transactions monthly will have a maximum charge of NIS 5. According to Bank of Israel data, the average monthly cost for managing a current account in 2025 was NIS 11.7.

While banks can opt to implement the new fee structure early, it is unlikely given the necessary system upgrades and potential revenue loss. Despite the public's widespread dissatisfaction with bank fees, Israeli banking competition is not robust enough to incentivize banks to proactively adopt the new model, unlike a previous instance with deposit account regulations where Mizrahi Tefahot Bank preemptively offered better terms.