Tuesday, August 24, 2010
I Got My Bank Account On My Second Try
Thankfully, the bank which had been closed on Thursday at 4 pm, despite the websites claim that it would be open from 4:30 – 6, was open on Friday from 8 – 12. I made sure to be there on the earlier side, as banking in Israel is known to be cumbersome and to take a while to get things done. There was no receptionist at the front desk, so in good Israel fashion, I saw my way to the back of the bank, walked into the first office and asked if this was where I was able to open an account. To my good fortune, it was. I sat down with Chezy Mehlman, a very capable Account Manager, and watched as he deftly filled out an excessive amount of paper work. I initialed and signed about 25 pages of forms, and an hour after I sat down in the office, I had a bank account. Throughout the process, I began to see the many differences between US and Israeli banks. In the US, banks entice customers with “Free Checking”, giveaway gimmicks and high interest rate accounts. In Israel, the banks charge you to hold your money!
At Bank of Jerusalem, there is basically a fee for everything I do with the bank and my own money. Writing a check – 2 shekel (NIS – New Israeli Shekel), cashing a check – 2 NIS, depositing dollars in my account via a check from my US account - $4, converting those dollars into NIS - $6 or some percentage depending on the size of the conversion. Withdrawals from the teller also cost money. I was told to basically stay away from the bank after I had just handed them over a check. ATMs, online bill pay and online banking are “free” to use. Other banks take a different approach with their customers. Rather than nickel and diming their customers, they simply charge monthly or quarterly fees for “all you can bank” checking!
Chezy was also told me that there are certain banking services, such as withdrawals in dollars, that I can only use at my “home” branch, where I opened my account. This was partly due to the fact that each branch keeps its own reserves on its own accounts and other branches won’t “front me” their capital if they don’t hold reserves on my account. This is apparently another great feature consistent in Israeli banks, not just Bank of Jerusalem.
I hope to find people who can explain to me how the whole banking system here operates. I am interested in gaining a better understanding of the differences between the US and Israeli banking system. All I can say is that there is likely a business opportunity to open a US style bank here that does not charge fees on everything, assuming you want to deal with the tons and tons of regulation, and Americans are lucky they do not have to deal with the relatively more complicated and expensive banking system in Israel.