Bank of Israel Launches Major Current Account Fee Reform and Debit Card Caps
The Bank of Israel's current account fee reform launches tomorrow, capping debit card fees at 7 NIS and eliminating outdated bank charges. A broader overhaul arriving in July 2027 will introduce flat monthly pricing.
The first phase of the Bank of Israel's sweeping current account fee reform takes effect tomorrow, bringing tangible relief to consumers utilizing debit cards. The monthly fee ceiling for debit cards will be capped at 7 NIS, down from the current market average of 9 NIS. With approximately 1.8 million active debit cards in circulation, this reduction is projected to yield tens of millions of shekels in annual savings for Israeli households.
Abolishing Legacy Fees and Capping Mortgage Adjustments
Alongside the debit card adjustments, the Banking Supervision Department is officially eliminating several outdated and contentious fees. Banks will no longer be permitted to charge customers for account tracing services or the complex handling of inheritances and estates. Furthermore, the penalty fee charged to the issuer of a check returned due to technical reasons will be completely abolished.
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Debit card monthly fee capped at 7 NIS.
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Elimination of account tracing and inheritance processing fees.
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Mortgage repayment date modification capped at 5 NIS for the first four changes annually.
The Upcoming Second Phase and Market Competitiveness
The central and most transformative component of the reform is scheduled to take effect on July 1, 2027. Under the upcoming framework, the traditional per-transaction fee default will be phased out and replaced by a mandatory "payment account management" service applied automatically to all customers without requiring active opt-in.
"While the reform aims to curb unfair banking costs, experience shows that Israeli bank customers rarely switch institutions despite ongoing public dissatisfaction with high fees," financial analysts note.
Under the 2027 model, customers will pay a maximum of 10 NIS per month for a comprehensive bundle covering 100 basic transactions, while those executing up to two monthly transactions will pay no more than 5 NIS. Bank of Israel data indicates that the average cost of maintaining a current account stood at 11.7 NIS per month in 2025.
