The downtrend in fees paid to the banks by households on their current accounts has petered out. Bank of Israel figures published today show that fees on current accounts averaged NIS 13.50 in the second half of 2013, the same as in the first half. The downtrend, which began in 2010, has cut these fees by an average of 10%.
Credit card holding fees totaled NIS 7.10 in the second half of 2013, up 4%, compared with NIS 6.80 in the first half of the year. These fees, which were on a downtrend for three years, have almost returned to their 2010 level.
The credit card fees paid by customers of banks that own credit cards are higher than those paid by customers of other banks. For example, Bank Hapoalim customers pay an average of NIS 6.60 for an credit card from Isracard, a company controlled by the bank, while the fee paid for this card by all customers averages only NIS 4.90.
The downtrend in current account fees may well resume in the near future, following the introduction of current account tracks this past April. The Bank of Israel ordered the banks to launch two current account tracks: a basic track with up to 10 monthly transactions, and a broader track with up to 60 monthly transactions. Under Bank of Israel pressure, the banks priced these tracks substantially lower than the fees per the tariff for the transactions included in each track.
Despite the attractive prices, the number of those signing up for these options to date has been estimated at a rather low 30,000. The Bank of Israel is making an effort to bolster public awareness, and has even written in its annual report on bank fees, "The Bank of Israel Banking Supervision Department recommends that customers should positively consider joining one of the tracks, since they represent a significant discount on current account management fees." Assuming that many more customers really sign up for the current account tracks, the average fee paid is bound to resume its downward path.
The Bank of Israel's report shows that Bank Yahav for Government Employees , controlled by Mizrachi-Tefahot Bank, is still the least expensive bank for bank fees. The average payment by the bank's customers in the first half of 2013 was NIS 2.70, 80% lower than the average. The Bank of Israel's rating does not include the Bank of Jerusalem, which stopped charging fees around two years ago. The highest fees were charged by the sector banks. The most expensive bank was Bank Poaley Agudat Israel, a First International Bank of Israel subsidiary catering to the haredi (ultra-Orthodox) sector, whose customers paid an average of NIS 25.20 per month in 2013, 80% higher than the average. The next most expensive bank was Mercantile Discount Bank, which is active mainly in the haredi and Arab sectors, and whose customers paid an average of NIS 19.80 monthly in current account fees last year.
Of Israel's five largest banks, the most inexpensive was Israel Discount Bank at NIS 12.50 per month. Discount Bank was formerly considered more expensive, but it appears that the measure introduced over a year ago to lower its fees has bettered its rating. In the rating on the basis of a uniform activity profile, the bank is in third place among the five large banks, at NIS 14.30 monthly.
Next among the five largest banks is Bank Leumi at NIS 13.20 monthly, followed by Bank Hapoalim with NIS 13.80 monthly. Rated according to a uniform activity profile, Bank Hapoalim is the least expensive of the five largest banks at NIS 12 per month, followed by Bank Leumi at NIS 14.20 per month. The second most expensive of the five large banks is Mizrahi-Tefahot Bank, whose customers pay an average of NIS 15.90 monthly, and the most expensive is First International Bank of Israel with a monthly average of NIS 16.80. p>Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2014
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