Banking in Israel

The process of opening a bank account in Israel, as well as the types of accounts available, vary based on one's personal circumstances. It's worth noting that individuals who are not residents of Israel can still initiate the account-opening process. However, they must provide their home country's tax identification number to ensure compliance with tax regulations and prevent any potential tax evasion.

Read also The tax system in Israel

Banks in Israel

The five largest banks in Israel – Hapoalim, Leumi, Discount, Mizrahi, and First International Bank – control more than 80% of the banking business. In 2022, there were 10 commercial banks in Israel, with 1,510 branches in the country's 82 cities (Israel's territory is, for comparison, 25 times smaller than France's). The banking system is controlled by the Bank of Israel, an independent body. Foreign banks operating in the country are not authorized to conduct banking operations.

There are also digital banks in Israel, like Pepper and One Zero. These options are exclusively open to residents of Israel with their tax residency in Israel and without American citizenship. Pepper has an extra requirement – you must already hold an account with another Israeli bank. The procedures for both banks are straightforward and efficient. While they mention on their websites that the final decision rests with the bank, typically, all you need is proof of identity and responses to a few inquiries, either through video or in written form.

What are the procedures for opening an account in Israel?

The process of initiating an account with established, conventional banks follows a distinct approach. The five prominent Israeli banks provide the option of initiating this process through their mobile app or over the phone. Those inclined to proceed with a bank representative at a physical branch can do so by scheduling an appointment, which can be arranged via their website or by phone. These avenues are open to foreign citizens residing in Israel as well, but they may be required to furnish extra documentation like their visa, passport, and tax-related information from their home country.

To open a private bank account, a foreign resident must present :

• his passport;
• a second piece of identification;
• visa or teudat ole (booklet certifying new immigrant status);
• social security number (for Americans) or tax number;
• cash to deposit in the new account.

To open a commercial account, the foreign resident must present:

• identity papers and legal documents attesting to your status;
• confirmation of company registration.

Read also Finding work in Israel

For the account to be in the name of the company and not in the name of the owner, the latter must present one of the following documents which will attest to the name of the company:

• its authorized dealer certificate;
• an attestation from a CPA or lawyer that the client is operating under the company's name;
• a business license certificate in the company's name issued by the local authority.

You also have the option to establish a foreign currency account. Each bank maintains its unique approach regarding agreements and exclusive deals. To get accurate information, it's advisable to consult your nearby bank or get in touch with the bank directly.

In Israel, every financial transaction comes with associated bank fees, including withdrawing money from your own bank's ATM. Digital banks, which are relatively new but provide 24/6 customer support, tend to be the more cost-effective option.

Payment methods in Israel

Israel has excellent Internet coverage and stands at the forefront of digital advancement; that's why it's possible to pay virtually anywhere via credit or debit card or telephone. There are also digital payment applications that are widely used between people and even between customers and service providers. The two leading applications in widespread use are Bit and Paybox.

To get started with this payment method, you have to input your phone number, bank information, and card number. Once the registration process is finished, you can easily make transfers and payments by identifying the recipient through their phone number. A new system is being examined, allowing direct phone-to-phone payments without requiring a separate payment app. This system is expected to be rolled out soon.

Lastly, certain supermarkets like Rami Levy and Shufersal and professional associations, insurance companies, and other enterprises provide their customers or members with credit card agreements, each presenting unique benefits.