Bank of Israel Cuts Fees on Debit Cards and Checks

The Bank of Israel is implementing the first phase of a reform aimed at reducing banking fees for customers, effective October 1st. This initial stage primarily targets debit cards, which deduct funds immediately from an account. The maximum monthly fee for these cards has been capped at 7 shekels, down from an average of 9 shekels previously. With approximately 1.8 million debit cards in circulation, this reduction is expected to result in significant annual savings for cardholders.

Additionally, the banking supervision authority is eliminating several outdated fees. Financial institutions are now prohibited from charging for account searches and for services related to inherited property. The fee previously levied on individuals who wrote a check that was returned for technical reasons has also been abolished. Furthermore, the cost for changing the date of a monthly mortgage payment is now limited to 5 shekels for each of the first four changes within a year.

The second and more substantial phase of the reform is scheduled for July 1, 2027. This phase will replace the current system of paying for each individual banking transaction with a fixed fee for "payment account management." Customers will be automatically transitioned to this new system. While banks can adopt the new system earlier, experts anticipate they will be reluctant to do so due to the costs associated with altering internal systems and the potential decrease in revenue.