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Date & time
Tue, Mar 17, 2:00pm
Location
Zoom
Event Language
English
Hosts

Banking in Israel for Olim

Not featured

Bank Mizrahi Tefahot's Head of English Desk presented comprehensive banking solutions for Olim, covering multi-currency accounts, tax benefits (10-year holiday on foreign income, 20 years on deposits), mortgage options (75% LTV for Olim vs. 50% for foreign residents), Israel's unique deferred debit credit card system, and the importance of bringing funds to Israel early to take advantage of tax incentives and avoid compliance complications.

Discussion Topics

1. Jonathan Gross Introduction & Bank Background

  • Jonathan Gross: 35-year Oleh from London (arrived 1990), 28 years at Bank Mizrahi Tefahot

  • Bank Mizrahi Tefahot: Third largest bank in Israel with ~20% market share in commercial banking

  • Largest mortgage bank in Israel: 40% general mortgage market share, over 70% of foreign resident mortgage market

  • English Desk serves clients from English-speaking countries (US, UK, South Africa, Australia, Canada)

2. Bank Services Overview

  • Almost 30 branches deal specifically with Olim and foreign residents (specialized tax knowledge required)

  • Four international private banking centers for clients bringing โ‰ฅ500,000 shekels (lower threshold than other banks)

  • Private banking branches staffed by Olim speaking English, French, Spanish, Portuguese, Russian

  • Regular Olim branches (24-25 locations) require smaller deposits with less specialized service

3. Multi-Currency & Multi-Purpose Accounts

  • Single account holds all currencies (USD, EUR, GBP, CAD, AUD, RUB, etc.) - no separate accounts needed

  • Multi-purpose functionality: current account, deposits, investments, mortgages, loans - all in one account

  • Simplifies banking - one account number for all transactions and currencies

4. Investment & Deposit Services

  • Deposit accounts available in shekels and foreign currencies

  • Stocks, bonds, mutual funds available once tax status is clarified (may have initial restrictions for new Olim)

  • Tax benefits: 10-year holiday on foreign income/investments, 20-year holiday on deposit interest

  • Foreign currency deposits: tax-free interest for Olim; Shekel deposits: 15% tax at source (discussions underway to change this)

5. Why Bring Money to Israel

  • Tax incentives preserved when transferring funds to Israel (common misconception that moving money loses tax benefits)

  • Must invest funds within 90 days of arrival to maintain tax-free status

  • Currency risk management: Living in shekels while earning/holding dollars exposed clients to 15-20% losses in 2025

  • Match living requirements to investments: Israeli real estate priced in shekels, daily expenses in shekels

  • Compliance made easier: Source of funds documentation readily available at time of Aliyah vs. 5-10 years later

  • Lower management fees in Israel vs. foreign investment companies (20-40% lower)

6. Currency Conversion & Exchange Best Practices

  • Banks competitive with exchange companies for large conversions (small conversions may favor exchange companies)

  • Bank advantages: government-backed security, same-day transfers, fewer correspondent banks, one-stop shop

  • Exchange company risks: Some have gone bankrupt, 3-4 day delays common, security concerns

  • Forward contracts available to lock in exchange rates for future earnings (important given shekel strengthening)

  • Dollar-shekel rate fell from ~3.70 to 3.08 in early 2025 (15-20% shekel strengthening)

7. Credit Cards & Deferred Payment System in Israel

  • Israeli "credit cards" are deferred debit cards - no revolving credit like abroad

  • Full balance charged by 2nd or 10th of following month (maximum 30-40 days credit)

  • Banks require deposit/collateral to cover monthly credit facility (e.g., 20,000 shekel deposit for 20,000 shekel limit)

  • All credit card companies available: Visa, Mastercard, Max, American Express, and points-based cards

  • Visa debit cards also available (money withdrawn immediately)

  • Tashlumin (installment) payments: Entire purchase amount immediately deducts from credit facility, even though paid over 10-15 months

8. Mortgages for Olim

  • Foreign residents: Up to 50% loan-to-value (e.g., 2.5M shekel loan on 5M property)

  • Israeli residents/Olim with Teudat Zehut: Up to 75% loan-to-value

  • Loan types: Fixed, variable, currency-linked (EUR, USD), various combinations available

  • Loan terms: Up to 30 years; age limit up to 80-83 years old (65-year-old can get 15-year mortgage)

  • Monthly payment limit: Maximum 47% of income (conservative to avoid foreclosure)

  • Pension income counts toward qualification for retirees

  • Pre-approval available: Submit financial details before property search to understand borrowing capacity

9. Online Banking & Digital Services

  • Website fully available in English and French (plus Hebrew)

  • Mobile app currently Hebrew-only; English version expected within couple months

  • Website useful for information and many transactions; app is ideal for all banking and contacting banker

  • Secure online messaging system for client-banker communication

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