Guide: How to change banks in the most convenient way
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The bank fees reform, which went into effect on July 1, 2008, enables customers to obtain all the relevant information regarding the fees charged by the banks, to compare them, and to decide which bank should handle one's account. In order to encourage competition between the banks, the Supervisor of Banks has also tried to ease, as far as possible, the process of closing a customer's account in a bank and transferring his banking activities to another bank.
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In the wake of the reform, customers will now know the cost of each bank service, and can compare the prices offered by the banks or other bodies providing the same service. With this information at their disposal, customers can request to be charged discounted fees at the bank handling their account, or if necessary, even transfer their account to another bank if it pays them to do so.
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If you have decided to change banks, this guide will enable you to make the transition between the banks in the easiest, fastest and most profitable way.
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The guide contains information on two major subjects:
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The orderly process of closing an account or transferring activity to another bank:
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Submitting full information about the customer's activity
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Avoiding the need for unnecessary visits to the branch
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Actions to be undertaken by the bank to which you have transferred your account
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Transferring some of the activities to another bank
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Limitations on fees in the process of closing an account and transferring activity
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For further information on the subject, you may consult Instruction 432  , which deals with the closing of accounts or the transfer of activity to another bank.
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| The orderly process of closing an account or transferring activity to another bank |
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Submitting full information about the customer's activity
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In order to assess your financial situation in the bank, and to weigh up whether it is worthwhile transferring your account to another bank, you are entitled, twice a year and free of charge, to request from the bank written information detailing all your assets in and liabilities to the bank and the costs of early repayment, your credit facilities, fees that were charged to your account in advance, the existence of a power of attorney on the account, etc.
The bank is required to issue the information form within four business days of your request. It is recommended to request the form prior to making the decision to move to another bank, because the form will help you:
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To assess whether it is worthwhile to transfer your activity (fully or partly) to another bank.
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To obtain a clear and comprehensive list of issues that you have to deal with prior to closing your account.
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To present your financial situation so that the banks you wish to transfer your account to can assess your position and the conditions they will offer you.
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Avoiding the need for unnecessary visits to the branch
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In order to limit as far as possible the need to return repeatedly to the bank branch as part of the process of closing your account and transferring it to another bank, you should do the following:
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Ensure that you have given explicit instructions to the bank concerning the actions to be taken regarding all the assets and the liabilities that were detailed in the information sheet you received. At the time of issuing the instructions to the bank, you can include future instructions (for example, to transfer the sum obtained from the future payment of a deposit to your account in the new bank).
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Request the bank to let you sign a form enabling you to issue instructions by telephone or by fax, as opposed to having to return in person to the branch.
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Actions to be undertaken by the bank to which you have transferred your account
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The bank you have chosen to transfer your account to is entitled to undertake, on your behalf, as requested by you, the following actions:
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Inform bodies that transfer credits to your account (National Insurance Institute, an employer) of the new account to be credited;
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Inform bodies that are authorized to debit your account (Israel Electric Corporation, cellular telephone company, Bezeq, etc.) of the new account to be debited;
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If you request the new bank to issue a new credit card, the bank is entitled to inform all the bodies that debit your account by means of the credit card for continuing transactions (for example, a newspaper subscription) of the details of the new credit card to be debited.
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If requested by you, the bank to which you have transferred your account is entitled to execute any action for you, on condition that you submit a power of attorney to the bank in which you authorize it to execute on your behalf any actions that involve transferring the activity, including managing contacts with the bank in which you have closed your account. These actions are conditional upon the bank's agreement to act in this way on your behalf.
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Transferring some of the activities to another bank
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In certain cases customers request that only some of the activities in the bank be transferred to another bank.
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You are entitled to transfer part of your activity in the bank to another bank, such as only your current account or investment deposits in another bank; to obtain loans from another bank (not the bank in which your current account is held); or obtain a credit card issued directly by the credit-card company and not by the bank handling your account.
In these cases, if you are interested in transferring only the current activity from the account, the Supervisor of Banks' instruction provides a solution to the major problems that could make the transfer more difficult. For example:
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Current account - in addition to the above contents of the guide, if you transfer the current activity but the account remains open because of a loan or a deposit or credit-card debits or post-dated checks-the account will be known as an "exchange account" on which current-account fees will not be charged.
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Deposits and loans - the bank is obligated to enable you to repay loans through another bank account, on condition that there is sufficient collateral against the loans. The bank is obligated to transfer a paid-up deposit directly to your new bank account.
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Credit cards - the credit-card company that you requested to issue you a new card is entitled to inform all the bodies that debit your account by means of the credit card for continuing transactions (for example, a newspaper subscription) of the details of the new credit card to be debited.
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| Limitations on fees in the process of closing an account and transferring activity |
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The overall fees for the transfer of activity to another bank because of the closure of an account are limited to a ceiling of NIS 40 (excluding early repayment fees and bank expenses such as a payment to a third party).
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The fee for the transfer of activity on a credit card because of the closure of an account is limited to an additional NIS 40.
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These costs are anchored in The Banking Rules (Customer Service) (Fees), 2008 (in Hebrew).
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Subject to the ceiling detailed above, the following are the fees for operations at the time of closing an account and transferring activity to another bank:
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The Service
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The Fee
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Canceling an authorization for debiting an account or a standing order
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In the case of cancellation of an authorization to debit an account or a standing order, prior to the presentation of at least 6 debits-the banking corporation is entitled to charge a minimum fee of 6 transactions in the direct channel
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Bank transfer
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The operation fee in the direct channel or operation by a teller, according to the channel in which the operation was executed
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Returning post-dated checks to the depositor
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The fee for returning post-dated checks to the depositor in the wake of closing an account, will not exceed NIS 5
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Transferring securities to the same customer's account
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NIS 5 plus the actual expenses of executing the operation
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Transferring foreign currency to the same customer's account in another bank
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The fee for transferring foreign currency to the same customer's account in another bank in Israel following closure of an account, will not exceed NIS 10
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