When opening a private bank account in Israel you should know a few of the loopholes. A private bank account is called in Hebrew “cheshbon osh” (Over V’Shav).
What can you do using an “Over V’Shav” account?
In fact, you can do almost everything. For example: you can pay most of the bills you receive in the mail, draft personal checks (in Israel you are allowed to write a postdated check), make transactions with other banks or pay your credit card bills (in fact you must have a bank account to pay your credit card bills in Israel).
Where to open your account?
Every major bank has branches all over the country so it won’t be hard to find a branch nearby your house. It is always better to work with the closest branch to your house. You will find that in Israel you will have to go to your bank often.
The bank should not prevent you from opening an account:
Any citizen is allowed to open an account except when the new client behaves improperly or the person had a previous account in the same bank and had “problems”.
Even when the client is considered “mugbal” (which happens when ten of your checks are bounced) the bank cannot deny you the right to open an account, but in this case the account will not have any credit frame. You won’t be able to be in deficit (minus). In addition you won’t be able to use or to have personal checks from this account.
What questions should you ask when opening a new account?
The most important question is not what the bank has to offer you, but if the bank can offer you the services and conditions you require. If you always have a positive balance in your account (one of the few in Israel who actually live within his budget!), receiving low interest for your deficit is not an advantage for you. If you don’t make many transactions in your account, a low fee for those transactions is not enough of an incentive for you. Therefore, look for what will serve your banking needs and not what the bank particularly offers you.
You will be informed that all the bank fees are listed and you will even be shown a list of those fees. Don’t be fooled – you can bargain over the fees, especially over those that you most use.
It will be very difficult to change anything that you didn’t ask for or bargain for once your account is active.
Your Credit Line:
By law the bank does not have to give you any credit line. Credit lines are a result of your assets in the bank, your credibility with the bank, and even a bit of the impression that you make on the bank personnel. It is easier to receive a credit line for those who have a steady salary. The higher your salary and the more money have in savings in the bank, the more credit you will receive. Please remember that this is not a free credit; interest is very high here and very difficult to calculate in advance (read the small print!).
All the banks in Israel send you a regular statement by mail even though you can obtain all this information on the bank internet site. Please keep every piece of paper for seven years, as it is stipulated by law. You may never know when you may need them and in Israel you will certainly need them at some time.
Minimum Age for Opening an Account:
A minor can open a bank account after the age of 16. A minor over the age of 14 is also eligible to open an account on the condition that his parents (both parents) give and sign their permission in the bank.
From the age of 15, a minor who is working and receives a salary that is deposited in the bank can ask to open his own account in the bank, even without his parents signed agreement.
Credit Cards, Checks and Credit Lines for Minors:
Banks may issue credit cards to a minor who is 15 and is employed, as stated above. But no minor will receive a checkbook before the age of 16. Between the ages of 16 to 18, the bank will stamp in the checkbook that account holder is either a minor or juvenile. In addition, the amount of withdrawal for every check is limited to 400 shekels.
Minors can receive a bank card with which he can withdraw cash. The limit is 400 shekels a day, on the condition that the account is not in deficit. It is not possible to have credit lines for minors without the parents consent. Under no circumstances can the bank allow a withdrawal over the minor’s credit line.
It is possible to have a very limited debit card (again for purchases of up to 400 shekels a day).
Changing one’s account to another bank:
Not only is this permissible, but you will find that banks are always looking to attract new customers, especially if they have assets. Therefore, when changing banks you can always improve your existing privileges.
In addition, banks cannot charge more than a small fee to transfer your account.
Unfortunately there are many inconveniences when changing bank accounts. Even though your new bank you are transferring to will help you to have a smooth transfer, it is not a short process, and sometimes it is even unpleasant.
Changing bank accounts involves changing credit cards, checkbooks, automatic payments (very popular in Israel), and much more. So make a well-informed decision before taking this step and don’t be tempted by promises.
-- This post has been written for us by Tzvi (Henrique) Szajnbrum