Bank of Israel Reforms Slash Fees on Debit Cards and Returned Checks

Starting tomorrow, the Bank of Israel's first phase of reforms to current account fees will take effect, significantly impacting debit card charges and returned checks. The monthly fee cap for debit cards will be reduced to NIS 7, down from the current average of NIS 9. With approximately 1.8 million debit cards in use, this change is expected to save consumers tens of millions of shekels annually. Additionally, the banking regulator is eliminating several outdated fees. Banks will no longer be able to charge for account location services, inheritance processing, or for checks returned due to technical reasons. The cost for changing a mortgage repayment date will be capped at NIS 5 for the first four changes per year. However, starting in July, the built-in three-year exemption from debit card fees will be abolished.

The second and more substantial phase of the reform is slated for July 1, 2027. This phase will replace the default per-transaction fee model with a fixed monthly "account management 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 up to two transactions monthly will have a maximum charge of NIS 5. According to Bank of Israel data, the average cost of managing a current account in 2025 was NIS 11.7 per month. Banks have the option to implement the new fee structure earlier, coinciding with the first phase, but this is considered unlikely due to the necessary system changes and potential revenue reduction. Despite the potential for banks to differentiate themselves by adopting the new structure early, the Israeli banking market's low competition level may hinder such proactive moves. The article notes that while fee structures are a major source of public dissatisfaction, customers have historically shown little inclination to switch banks.