Financial transactions in Israel, both for olim chadashim (new immigrants) and foreign residents, can be a daunting process, requiring dealing with a new culture, a different language, different financial products – and most importantly, a different currency. You are also dealing with a banking system that may be very different from what you are used to in your countries of origin.
People open accounts in Israel for many reasons, whether to lay the groundwork for their own Aliyah, to support children or parents who may be studying or retiring in Israel, to invest in the property market or in a local business, to name but a few.
The banking relationship one begins is often the most crucial business relationship one can have post-Aliyah. In Israel, the bank is central to many aspects of our financial life. Maintaining savings and deposits in different currencies, investments and retirement plans, property finance or car loans, mortgages or deferred debit cards (credit cards), transferring and receiving funds, paying or receiving rent, social security or pension funds – these are just some of the activities where the bank is a critical part of the process. Finding the right banker to help you navigate through the services and options is key in ensuring a successful banking relationship.Learn how Mizrahi Tefahot can help >> At a time when many banks are opting for the digital approach via alternative channels, such as call centers and digital banking, new immigrants are often left behind as they are not fully fluent in Hebrew and cannot easily navigate the system. We at Mizrahi Tefahot pride ourselves in being the only bank still focusing on the human element in the banking relationship. Our technology supports and reinforces the "banking relationship" and by no means replaces it.
Finding the right banker as part of your Aliyah will transform your banking experience, and the value provided exceeds any alternative.
How do I open an account in Israel?
Mizrahi Tefahot has specified certain branches which can deal with bridging all the above and can therefore offer and deliver better services required by the customers. In addition, the compliance processes are easier to navigate when explained in one's native language by someone who has much experience in the field.
At Mizrahi Tefahot Bank (UMTB), we have designated several branches located in different parts of the country that can offer the necessary services for this clientele. This includes four International Private Banking Centers, which provide a full range of private banking services staffed by native speakers of English, French and other languages. This makes the entire experience a more pleasant one as it not only removes the language barrier but offers the client personalized service, often from a banker who himself has experienced new immigrant status in the past.
The account opening process involves signing documentation in a language understood by the customer. We at UMTB offer a comprehensive and supportive service where the customer's needs are at the forefront. By taking into account all of the client's expected future activity, we can ensure that the process is as smooth as possible.
Transferring funds into my account from abroad- How do I ensure a smooth process?
One of the obstacles faced by many clients occurs when they try to transfer funds from abroad. We are often approached by new customers who have experienced significant difficulties carrying out this seemingly trivial task. Once the various documentation needs are explained, including affirming the source of funds, for example, the process is quite simple.
It is prudent to consult your banker prior to making the transfer, and he will be able to explain the necessary documentation required to cover all the compliance requests. At UMTB, we find that this preparation provides a smoother process with less frustration for the clientele.
Converting FC to shekels – Where can I get the best deals?
Almost every new immigrant will need to change foreign currency into shekels. The bank prides itself on providing a competitive service for all foreign currency needs. It is part of the total banking package and includes help in navigating the relevant documentation needed for receiving funds. Your banker will take you through every step of this process and will save you money and time if you consult with your relationship manager ahead of any transfers to match your specific needs.
Credit and Debit cards – How does this differ from abroad?
An area that causes a great deal of confusion among new immigrants and foreign residents is credit and debit cards. When a customer receives a credit card from his bank abroad, he is given a credit capacity which he can either pay off on a monthly basis or decide to pay at a later stage, incurring interest charges for the credit amount provided.
In Israel, this "credit capacity " is less prevalent, and the payments on every card are automatically paid off monthly. These are known as deferred debit cards which offer credit on a purchase until the pre-ordained payment date on the following month. As a result of this automatic debit, the bank will typically require the customer to deposit money in a collateralized deposit for the value of the capacity. Your banker will explain all you need to know about this much-utilized function. In Israel, interest-free payments, known as "Tashlumim," is probably the most common of all credit card usages. It is worthwhile to fully understand the significant benefits involved as well as the pitfalls to avoid.
Buying property in Israel – How can I finance it?
A new immigrant purchasing his first property in Israel can borrow up to 70% of the value of the property over a period of up to 30 years. There is the possibility of exceeding this rate by providing additional guarantees. The mortgage request is assessed by bankers who have expertise in international documentation and can provide quick answers.
The mortgage can be financed in shekel at a fixed or variable rate or indexed to the euro or dollar under certain circumstances. The bank will provide the customer with a "tailor-made" solution to meet their requirements. It is critical to understand how the 'ability to repay' is measured and how the Bank of Israel regulations affect this and the purchase process.
As the largest mortgage bank in Israel, we pride ourselves in providing customers with a competitive offering, taking into account their financial situation and expected future income. Since we recognize that taking a mortgage is one of the most important long-term decisions that the customer will make, and can have ramifications for many years, we take great care in ensuring that our expertise will guarantee the success of this decision.
The above are just a few of the service we offer olim chadashim, at any stage of their process. In a future article we will look into the various opportunities for savings and investments. These are no less important a part of the product offering that clients seek, albeit once they have settled down in the country and ready to proceed to the next stage of integrating successfully in their new home.
Mizrahi Tefahot – for olim chadashim – Welcome Home
The above is not in anyway an offer for credit. The provision of any credit (including credit cards) are subject to the banks criteria. Any default on a loan may entail arrears interest charges and enforcement proceedings.