Israeli Banks Earn About NIS 9.7 Billion a Year From Household Checking Balances
Israeli banks are estimated to have earned NIS 9.7 billion net in the past 12 months from household checking-account balances, according to a Calcalist analysis. After paying only about NIS 230 million back to customers in token interest, the banks kept the rest by depositing most of that money at the Bank of Israel and earning roughly the policy rate, which averaged 4.3% over the year. In practice, every NIS 10,000 left in a current account generated about NIS 430 for the banks, while households received only about NIS 10.
The article says the public became used to holding large liquid balances during a decade of near-zero rates, and when rates rose sharply in April 2022, banks profited from the inertia. At one point, some money moved into deposits and money market funds, and during 2025 the checking-account total had been relatively stable at NIS 227 billion to NIS 232 billion a month. But Bank of Israel data for April show the trend reversed, with balances rising for four straight months from NIS 226 billion in February to NIS 237 billion in April, the highest level in nearly two years.
Calcalist says many households still do not use money market funds as an alternative. These funds pool bank deposits and short-term government paper, giving retail savers institutional-like terms, daily liquidity, low risk, and returns close to market rates. With the Bank of Israel rate still at 3.75% after a 0.75 percentage point cut since last November, NIS 10,000 can still earn about NIS 375 before tax, or NIS 420 over the past year.
The article notes that money market fund assets have grown steadily, from NIS 50 billion at the start of 2023 to NIS 107 billion at the start of 2024, NIS 150 billion at the start of 2025, and NIS 202 billion in June. Even so, that remains well below the NIS 237 billion sitting in checking accounts and far under more than NIS 1.5 trillion in bank deposits. Using an assumption that each household needs a basic liquid balance of NIS 15,000, or about NIS 46 billion in total, the paper estimates the average Israeli household lost NIS 2,588 over the past year by leaving extra cash in checking instead of a money market fund.
The report adds a structural caveat, based on Bank Supervisor data from last year: 37% of all checking-account money is concentrated in just 2.6% of accounts, those with more than NIS 250,000, while nearly half of accounts hold no more than NIS 5,000 a month. Regulators are trying to push the issue, after a law sponsored by MK Erez Malul of Shas took effect this year requiring banks to warn customers who keep more than NIS 15,000 in checking for a long time. In October, Bank of Israel also ordered banks to display money market funds alongside deposits, and last month the Competition Authority said banks were a concentration group, paving the way for possible requirements to highlight those funds at key customer decision points.
