The banking system in Israel is well-developed and generally sophisticated. Israeli commercial banks are more similar to European, rather than American banks, in that they are financial supermarkets offering a large range of products, from current accounts with cheque and credit card services, to securities and foreign exchange transactions, and loan facilities from overdrafts to mortgages, all under one roof.

Branches
Most bank branches offer a full range of services to household customers, including foreign exchange transactions.
However, the large banks have earmarked a number of branches as specializing in business customers, whilst others have special departments for "upscale" clients, with more personalized service. Especially in Tel Aviv, it's worth checking whether a branch offers the kind of service you are likely to need - or whether it is planning to change its customer focus - before opening an account there.

Retail Branch Network
The banking system is very concentrated - a few big banks dominate the market. The two largest are Bank Hapoalim and Bank Leumi, which each have 250-odd branches spread throughout the country. Israel Discount Bank is half the size of Leumi, and has some 160 branches. These three together comprise about 70% of the whole banking system.
United Mizrahi Bank and First International Bank are medium-sized banks, with 80-90 branches each, primarily in the big cities. Many of the other banks are in fact subsidiaries of the five major banks, e.g. Mercantile Discount Bank is owned by Israel Discount Bank, whilst Otsar Hahayal, Continental and Massad all belong to Hapoalim.
All the five major banks have international operations: in addition to dealing rooms and other services in Tel Aviv, they all have branches or subsidiaries in London and Zurich or Geneva. The three big banks have large-scale operations in New York as well as a presence elsewhere in the US and throughout Latin America. Bank Leumi also has a subsidiary in Paris.

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Foreign Banks in Israel
There are still very few foreign banks operating in Israel. This is due to change in the near future, when Citibank opens a full-service branch in Tel Aviv. HSBC is also due to open a branch in early 2001. Other foreign banks in the process of opening offices in Israel, such as Bank of America and Chase Manhattan, are concentrating on business customers and investment banking.
From the point of view of household banking, therefore, foreign banks are not yet an alternative to the local banks.

Other Financial Services Providers
It's worth bearing in mind that some services can be obtained quicker and/or cheaper from providers that are not commercial banks. This is especially true for some foreign currency services.

1. Post Office Bank
   The Post Office has almost as many outlets throughout the country as the entire banking system, and these are now all computerized and hence offer many services. For instance, it's cheaper (no commission) and usually quicker to pay utility and other bills in the Post Office than in the bank, even in your own branch.
   Also, the Post Office is linked into the Western Union network, so that foreign currency transfers in both directions are executed more quickly, and much cheaper (for small sums of money) than via the banks.
   The Post Office also sells and buys foreign currency cash and travellers cheques; again, the charges are lower than the banks and it's often quicker as well.
   
   
2. Change "Shops"
   In recent years, Bank of Israel has licensed several small private firms to offer exchange facilities for foreign currency. These outlets - mostly shops in the main city centers - are useful for buying and selling cash and travellers cheques. Usually their commissions are lower overall than those of the banks and the service is generally much quicker. If you become a regular customer, the shop you deal with may agree to honour your personal cheques drawn on a foreign bank. In any event, make sure that the shop you company you deal with has a license from Bank of Israel. Avoid street corner money-changers, where the risk of counterfeit notes is highest and you will have no-one to come back to.

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Languages
In most bank branches, you'll find some people who can speak English - usually the personnel in charge of foreign currency. Russian is also common.
However, if you are not comfortable with English or simply prefer to receive service in one of the other main European languages, such as French or German, you can usually find a branch where someone speaks your language.

Choosing a Bank and Branch
If language is very important to you, you should make that a key element in your decision where to open your account. This reflects the fact that, for most people, getting good service is the main factor in choosing a bank. Convenience is another important issue for most consumers. These should carry more weight than which particular bank you deal with, because for regular household banking, there is usually little difference between banks and even between branches. The particular person or team you deal with are what matters most.
It's usually a good idea to get a recommendation from a colleague or someone with similar needs to your own.

Hours of Opening
Banking hours are generally 8:30 - 13:00 every morning, Sunday-Thursday, with afternoon opening days and hours varying between banks. Most banks now open two afternoons a week. On Fridays and the eve of holidays, opening hours are 8:30-12:30.

Foreign Currency Accounts
All the banks, but especially the major ones, will open foreign currency accounts for temporary residents and foreign citizens. These have various advantages over regular foreign currency accounts available to Israelis, notably that the interest rates paid on deposits are higher and that interest is tax free.
Both current and deposit accounts are available in all the main currencies, such as dollar, euro and euro-component currencies (D-mark, French franc, florin, etc.), British pound, Swiss franc, etc. Checking facilities are usually unavailable on foreign currency accounts, but can sometimes be arranged on US dollar accounts - it generally isn't worthwhile.
Interest on deposit accounts is paid on the basis of the amount on deposit and the time span; these rates are in line with those available for similar sized deposits in international banks in Europe. The rates are usually negotiable, especially for customers in good standing - remember, this is the Middle East and everything is open to bargaining.

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Changing Cash and Notes
As noted, these services are available both in banks and in non-bank companies. In general, foreign exchange "shops" will be cheaper and quicker for small transactions.

Forex Transfers
All the banks can handle transfers to and from overseas, but the charges are often very high, especially for small amounts. The most economical way to effect small transfers is via the Post Office link with Western Union.

Securities Trading
All banks offer the possibility of trading both local and foreign securities from your regular account. However, if you want to trade foreign securities on a regular basis you should use one of the five major banks, and ask for clearance to speak directly to the foreign securities trading desk, which stays open until US markets close, at around 23:00 Israel time.
Alternatively, you can open an account with one of the several US brokerage companies that have offices in Israel, such as Oppenheimer or Josephthal. If you are used to trading via the internet from a brokerage account overseas, that should still be possible and may well be desirable. If you are a good customer, your broker will allow you to call him collect, or he will phone you back directly you call him.
Bear in mind that trading US markets from Israel means watching the markets through the evening, which gets a bit tiresome.

Current Accounts
Opening a current account in shekels in an Israeli bank is no worse than opening an account in most countries - in other words, it's a time-consuming thing that you simply have to do. You'll need identification (passport) and probably a letter from your employer or embassy. There are lots of forms, which some banks have available in English, but it's a waste of time trying to read them: they are full of legalese that says one main thing - the bank is always right and you are always wrong.
Your current account number will usually serve as your foreign currency account number as well, but with a different prefix. If you ask for an easy-to-remember number you might be lucky and get one - it doesn't hurt to try.

Cash Machines
When you open your current account, you should apply for a cash card, or (see below) a credit card that serves as a cash card as well. In Israel, the automated teller machines (ATM's) of any bank must accept the cards of all other banks, for the purposes of cash withdrawals. Some machines have instructions in several languages, but its worth getting assistance for the first few times you use them. Israeli banks encourage the use of ATM's by charging a smaller fee for cash withdrawals from an ATM than over the counter in your branch. The machine usually tells you how much you can withdraw in a single day, depending on the kind of card you are using.
The ATM's also allow you to draw cash in shekels using foreign credit cards, but this usually entails a charge, as well as commissions on the conversion fromwhatever currency your card uses, to shekels.
If an ATM swallows your card, for any reason, it's no use speaking to the people in the branch where the machine is situated. They are obliged to send it to your branch, and you have to apply there to get it back or have it replaced.

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Cheques
Banks will issue cheque books when you open an account, if you either make a deposit, especially of foreign currency, or arrange to have a salary or regular income credited to the account. Otherwise, the branch will delay giving you a cheque book until it "gets to know you". If you are introduced to the branch by your employer or by an existing customer, you will be get better treatment generally and will be granted a cheque book and credit card immediately.

Charges
Bank charges in Israel are generally lower than in banks in the US, UK and other Western European countries. As a rule, very few services are free, but the level of fees is low by international standards.

Paying Bills
If you are in Israel for any length of time, it's worth arranging to pay your utility, phone and other regular bills by standing order via the bank. Other bills, such as car insurance, can often be paid over the phone, using a credit card.
If you insist on paying in cash, try and use the post offices, where there is no charge levied on paying bills.

Direct Banking
Phone banking is fairly developed in Israel, but making transactions over the internet (as distinct from obtaining information from the bank's site) has not yet been approved by the regulators and is therefore not generally available.

1. Phone Banking
   All the major banks offer phone banking of some sort. Bank Leumi's service is a direct copy of the British First Direct bank, and even uses the same name. Bank Hapoalim Direct is available as an ancillary service for accounts in all its branches, but doesn't operate as a separate bank or branch. These services are in Hebrew, and are of limited use for non-Hebrew speakers.
   On the other hand, the computerized answer-phone touch-dialling services offered by most of the banks are available in several languages, including English and Russian.
   
2. Internet Banking
   The Israeli banks are lagging behind their foreign rivals in developing online banking services. These are gradually expanding in scope and sophistication, but remain limited for the moment to information about markets and rates as well as access to updated account information. Bank Leumi offers a service whereby its customers can trade on US markets through its online system. Israel General Bank, one of the smaller banks, offers foreign exchange trading online and the larger banks will probably catch up before long.

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