Choosing and managing a bank account: how to choose well and save thousands
Choosing a bank account affects the fees and interest you pay, the quality of service and the tools available for managing your money. This page explains how to compare traditional and digital banks, match the account to your needs and stage of life, and determine when switching banks can save money and improve service.
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For most of us, the bank account is the center of our financial lives. Our salary is paid into it, and our expenses are paid from it. Even so, many people choose a bank almost by chance—because it was their parents' bank or because of a benefit they received at age 16. This choice has real financial significance and can add up to tens of thousands of shekels over the years.
Today's banking market no longer allows us to remain indifferent. Small differences in fees, overdraft 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. or deposit terms directly affect our net position. This page explains how to compare types of banks, how to switch banks without leaving home and how to match the account to your current stage of life.
How do you choose a bank?
Choosing a bank is not a question of which bank is largest, but of how you use your account. Are you often overdrawn? Do you hold savings? Invest in the capital market? Need personal service, or prefer to do everything on your phone?
Before opening an account, examine these four essential factors:
- Fees: How much does routine account management cost, including direct-channel and teller transactions, credit card costs and capital-market trading fees?
- Interest rates: What interest will you pay if you enter an overdraft or take a loan, and how much will the bank pay you on deposits and positive balances?
- Service and app: How advanced is the digital interface, and can you perform most actions without visiting a branch?
- Special services: Specific terms for foreign currency, investment portfolios or benefits tailored to your status.
Types of banks in Israel: traditional versus digital
Banking in Israel currently follows two main models. The choice between them depends entirely on how comfortable you are with digital services.
Traditional banks, such as Hapoalim, Leumi and Mizrahi-Tefahot
The established model combines a network of physical branches, face-to-face meetings and digital systems.
Advantages
- Face-to-face human assistance, personal support on complex matters such as mortgages or business credit, and a sense of 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. for people who prefer direct contact.
Disadvantages
- Usually higher fees, longer waiting times at branches and less flexibility in opening hours.
Digital banks, such as ONE ZERO or Esh Bank
Licensed, technology-based banks that operate entirely through an app and website, without physical branches.
Advantages
- A fast and advanced user experience, fully digital account opening, low fees or fixed-plan pricing, and smart technology for tracking expenses.
Disadvantages
- No option to meet a banker face to face, a range of services that may still be narrower than at large banks, and less suitable for people who are not comfortable with technology.
Service and availability: the real test
Despite the major shift to apps, during a crisis or at important decision points—such as taking a loan or resolving an account problem—we may still need a person. Before choosing a bank, check the availability of its service centers, response times, and whether it offers a personal banker or fast chat service.
Compare and choose carefully
The Bank of Israel's official data table presents the annual ranking of banks by service quality and customer satisfaction. We have gathered the relevant banking information on the Banking section so you can continue comparing your options.
Compare bank offers for opening an account
Before opening a bank account, do not examine only which bank offers the largest benefit. Check the conditions for receiving it and what the account will cost later. Compare account-management fees, joining grants and benefits, eligibility conditions, the benefit period and accompanying services. This helps you understand what each plan really includes and choose the bank that suits your needs and financial habits.
Switching banks
If your terms are poor, the account-switching reform has removed much of the bureaucratic burden. Israel now operates the “switch with a click” system, which lets you move to another bank automatically, securely and at no cost within seven business days.
What moves automatically with you?
- Positive or negative balances, including an overdraft.
- Standing orders and direct-debit authorizations.
- Credit-card charges, both bank and non-bank cards.
- Salary, benefits and recurring transfers.
What should you check before switching banks?
Checks worth performing
- Compare fees and interest rates
- Make sure the terms of your loans are not harmed
- Check investment-portfolio and foreign-currency fees
- Make sure every instruction transferred successfully
- Continue monitoring the account during the first few months
Matching the account to your stage of life
Banks offer plans tailored to different stages of life, and it is important to make sure you are assigned to the right one:
- Young people and students: Usually eligible for a full exemption from basic current-account fees, flexible credit limits and dedicated credit-card benefits.
- Self-employed people and business owners: Should focus on the costs of depositing cash and checks, the convenience of making supplier transfers and the terms of business credit.
- Families: Should focus on convenient joint-account management, the quality of the app for family monitoring, and loan and mortgageA long-term loan for purchasing a property, with the property serving as collateral for the bank. terms.
- Pensioners: Are entitled to benefits prescribed by law, partial exemptions and accessible, simple service channels.
Bottom line
The best bank is not necessarily the largest bank or the one that offered a gift for opening an account. Check which bank suits your usage habits and financial situation, and make sure you are not paying unnecessary fees or high interest.