Bank fees: how to stop paying unnecessarily
Bank fees can look like a small expense, but over time they can add up to hundreds or even thousands of shekels a year. This page explains how to identify unnecessary fees, choose a suitable current-account plan, compare a bank with an investment house, and negotiate terms that leave more money with you.
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Bank fees are the kind of expense that can be almost invisible. A few shekels here and another fee there, and by the end of the year you discover that you paid hundreds or thousands of shekels without noticing. The good news is that, in most cases, you can reduce these costs almost to zero by choosing the right fee plan, understanding investment fees, and conducting a simple negotiation.
This chapter exposes the less visible fees and explains how to stop money from leaking away. We will look at the current-account plans Israeli banks are required to offer, examine the large gaps between banks and investment houses, and provide a precise conversation script to help you negotiate with your banker like a professional.
Osh current-account fee plans (מסלולי עמלות עו״ש): how do they work?
Many people do not know that Israeli banks are legally required to offer customers fixed fee plans for their current account. Instead of paying separately for each transaction, such as depositing a cheque or withdrawing cash, you pay a fixed monthly amount that includes a defined number of transactions.
Bank fee plans
| Plan | What does it include? | Maximum monthly price | Who is it for? |
|---|---|---|---|
| Basic | Up to 10 direct-channel transactions + one teller transaction | Up to NIS 10 | Customers with limited activity |
| Expanded | Up to 50 direct-channel transactions + 10 teller transactions | About NIS 20–30 | Customers with regular activity |
Compare and choose wisely
The Bank of Israel publishes the fees banks charge for account transactions each month. To help you understand the monthly cost of managing an account and decide which plan suits you, we have collected the information on a dedicated comparison page.
Compare bank account opening offers
Before opening a bank account, check not only which bank offers the largest benefit but also the conditions for receiving it and the future cost of the account. Our table brings together offers from different banks, including account management fees, joining grants and benefits, eligibility conditions, the benefit period, and accompanying services. This lets you compare the offers, understand what each plan really includes, and choose the bank that suits your needs and financial habits.
Investments and foreign currency: the difference between banks and investment houses
Many investors negotiate over a few shekels in current-account fees but ignore where they may be losing thousands of shekels a year: their investment portfolio and currency conversions.
- Buying and selling fees: Every time you buy or sell a securityA general term for a tradable financial asset (such as a share, bond, or unit in a fund) that represents a right to an asset or to profits.—a share, bondA type of "loan" that an investor provides to a government or company in exchange for repayment of the principal plus interest., or exchange-traded fund—the bank charges a percentage of the transaction.
- Custody fees or portfolio management fees: A fee that some banks still charge simply for holding securities in the account.
A numerical example
In a portfolio worth NIS 350,000, an annual custody fee of 0.3% will cost NIS 1,050 every year, before you have bought or sold even one security.
The Bank of Israel publishes the fees banks charge for capital-market investments each month. To help you understand how much you pay to manage, buy, and sell securities, we have collected the information on a dedicated comparison page.
An investment portfolio at a bank or an investment house?
In most cases, managing an investment portfolio through an external investment house is significantly cheaper than doing so through a bank. The main reason is that banks usually charge management or custody fees worth about a percentage of the portfolio. As the portfolio grows, the annual cost therefore grows as well.
At investment houses, by contrast, the fee is fixed and is usually a few dozen shekels per month, regardless of the portfolio's value.
In addition, fees for buying and selling securities in Israel and abroad are usually lower than at banks, and the minimum transaction fee may also be lower.
Investors who place transactions themselves and want to reduce costs should therefore examine the terms offered by different investment houses and compare them with the costs they pay at their bank.
The following investment houses offer self-managed investment accounts:
- IBI Trade
- Meitav Trade
- Psagot Trade
- Excellence Trade
- Altshuler Shaham Trade
- Interactive Israel
Foreign-currency conversion costs and a smart solution
When you convert shekels into dollars to buy a share abroad, the bank charges a conversion spread—the difference from the representative exchange rate. On large amounts, this spread can take hundreds of shekels from your portfolio.
Trading-system convenience
Price is important, but when choosing a trading system, remember to check:
What is important to check?
- Is the trading system convenient?
- Is it easy to buy and sell?
- Is the information presented clearly?
- Does it provide access to the markets relevant to you?
This will help you make sure that the system you choose suits the way you operate.
How do you negotiate bank fees and management fees?
The terms the bank offers are not predetermined. A bank is a business, and a customer with a regular salary, savings, or credit activity is a customer the bank wants to retain.
Conversation script: how to do it right
Come prepared. Do not ask for a favor; conduct the conversation as a customer evaluating a service provider. Contact the banker through the app or by phone and say:
A conversation with the bank
Hello, I reviewed my fees and management charges against offers I received from competing banks and investment houses. To keep my activity here, I would like you to cancel the custody fees and update my trading and current-account fees to competitive terms.
Simply having this conversation will often lead to an immediate reduction in fees, cancellation of credit-card fees, and better interestThe "price of money" – the amount paid for the use of someone else’s money, as income to the depositor or as a cost to the borrower. rates on deposits.
Even if you do not receive everything you ask for, an improvement of a few dozen shekels a month or a few tenths of a percentage point in interest can add up to thousands of shekels over the years.
Exemptions and benefits for eligible customers
Israeli banks compete for new customers, so they offer substantial benefit packages for different stages of life. A common mistake is forgetting to update our status as our circumstances change and continuing to pay full fees.
Check which group you belong to and what you are entitled to:
Young people and teenagers aged 14–18
Typical market terms: A complete exemption from management fees and basic current-account fees, including digital and teller transactions. Dedicated credit cards with no card fee and strict exposure limits to help prevent overspending.
Compulsory-service soldiers and national service volunteers
Typical market terms: A complete exemption from basic current-account fees, exemption from bank credit-card fees, and significant discounts on foreign-currency fees, especially relevant when travelling abroad during leave.
Students at recognized institutions
Typical market terms: A complete exemption or a significant discount of 80%–100% on current-account fees, no credit-card fee, preferred terms, and flexible credit facilities, sometimes including interest-free loans to finance studies.
Proof required: The benefit is time-limited, usually for three to five years, and depends on presenting a student card or annual confirmation of studies at the beginning of each academic year.
Senior citizens and people with disabilities
Typical market terms: Built-in protection from the Bank of Israel. Eligible customers receive four teller transactions per month at the reduced price of a direct-channel digital transaction. Banks must also automatically place them on the basic fee plan, costing up to NIS 10 per month, if the system identifies that this will reduce their costs.
The bottom line
A thorough review of fees will leave more money in your pocket and can save you hundreds or thousands of shekels each year.
Frequently asked questions
Will a banker really take me seriously if I am a small customer without millions?
Yes. Banks are measured on customer retention and the acquisition of salary accounts that provide cash flow. An ordinary customer who presents an alternative or asks to move to a structured fee plan will also receive a response.
Is it worth moving to a fixed fee plan?
In most cases, yes, especially if you make routine transactions in the account. Check whether the plan is cheaper than paying for each transaction separately.
How can I tell how much I paid in fees last year?
Every February, the bank must send you a document called a Teudat Zehut Bankait (תעודת זהות בנקאית), or annual banking statement. It clearly summarizes all the fees and interest you paid during the previous year. This is your best tool for negotiation.
Is it always better to invest through an investment house?
Not necessarily. Banks sometimes waive custody fees and provide significant discounts on buying and selling fees. The bank's convenience may also be worth the additional cost, but it is important to understand in advance how much you are paying and whether the difference is justified.
In summary
Bank fees may not be your largest expense, but they are among the easiest expenses to reduce.
Do not assume that the terms you received in the past are the terms you deserve today. A yearly review and a change of plan when needed will help keep the money you worked hard for in your own pocket rather than in the bank's account.