When I made aliyah a few years ago, I was surprised at how different the banking system in Israel is from the system I was used to in the States.  Not knowing what to expect, I blindly followed my aliyah shaliah’s advice and ended up at a horrible bank from which I transferred after 2 years. 

But it’s not all bad.  My first banking experience in Israel could have been worse, and before it was, it taught me to consider a number of items when choosing a bank:

(1)  Think local

In Israel, unlike in the US, your account is tied to a local branch, so if you need to do any major transactions, you will have to go to your branch.  When I moved from Jerusalem to Petah Tikvah, I had to switch to a local branch that was not open on Fridays, forcing me to miss work any time I wanted to do any serious banking.  I later switched to a bank that was open Fridays, but closed Sundays, a much better trade-off to match my working schedule.

Also, pay attention to how busy the local branch is.  At my last bank I had to wait two hours for a single transaction because I went on a busy day. Obviously banks have busier times than others, but two hours is insane.  Next time you shop for a bank, go into the bank a few times at your convenience and see if the bank is not overly packed (or understaffed, as the case may be.)

(2)  It can get personal

Some Israeli banks insist on tying every customer to a particular banker.  While this does allow for a more personal banking experience where your personal banker knows what you need, it is also annoying to have to try to wait if your particular banker is busy or on vacation.  Personally, I hate the idea of being tied to a banker; I want to be in contact with the first available banker and get the information I need (what can I say, banking really brings out the yekke in me).

At the same time, make sure that you get the direct number for the local branch where you do your banking.  At my last bank, I had an issue where money was taken from me by mistake, and the bank even admitted it, but kept telling me to be in contact with them via the call center.  The call center was horrible; everyone kept passing me to someone else and promising to call me back with an answer.  After calling dozens of times over the course of six weeks and not getting anywhere, I closed my account and moved to a different bank.

I know what you’re saying now: “so go to a bank where you are tied to a banker!”  Well, I ended up going to a bank with the best of both worlds.  On one hand I am not tied to a banker; on the other hand, I can directly contact the manager of the bank if anything goes awry.

(3)  Credit and debit cards are not the same and it makes a difference

While the American credit card system is a travesty, the American debit card system is a model to which I hope Israel will aspire.  Back in the US, I could use my debit card to take out up to as much money as I had in my account and everything was posted instantly.  (And don’t let the rumors fool you; most debit cards have the exact same protection as credit cards.)

Israel has a different system that is kind of a cross between a debit and credit card system.  Using an Israeli credit card, you are only to spend up to a particular limit and instead of the money coming out of your account as each transaction occurs, the amount you charged each month is removed in a lump sum.  This became an issue two years ago when I had to pay for a private surgery and had to come up with a large amount of money.  The money was in my account, but the surgeon would not accept a check.  I had to choose between using a bunch of different credit cards (including my US one, which charges a large fee for international use) or taking out the money from my branch and carrying around thousands of shekels in cash, like a drug dealer.  Long story short, make sure you have a system in place with your bank to deal with this kind of issue.

(4)  Online services have a lot of potential

Most banks will allow you to monitor your account and perform simple transactions online, but some will even let you do complicated transactions as well.  This week, my wife contacted her banker via e-mail with a difficult transaction request and then he called her within a day to confirm the transaction and send over the necessary paperwork.

(5)  Banks will try to nickel and dime you

I already killed this subject in a couple of posts here and here.  My views are clear:  you should be paying minimal or no fees and you have to fight for it.  Make sure, before signing onto a new account, that you know the entire fee structure.  Also, don’t believe a banker who promises you a discount; get everything in writing.

(6)  Language matters

I was actually surprised to hear from a number of people that their bankers would not communicate with them in English, or even get another banker who could.  Most banks I have dealt with go out of their way to find bankers who speak a number of languages (in Petah Tikvah, Russian and Amharic are the main languages in demand).  Nonetheless, if a banker will not speak to you in your language, request another banker or don’t sign up for that bank; it’s not worth messing up your finances over a language issue.  (“I dind’t close ten thousand dollars in a CD, I asked you what time you’re open on Tuesdays!”)

What do you look for in a bank?  What challenges have you faced?