The banks with the highest monthly costs for maintaining a private current account are Bank Leumi and Union Bank. The lowest is at Bank Hapoalim.
The bank supervisor at Bank of Israel today released a table, comparing the major banks in terms of monthly cost of maintaining a private current account as of the beginning of February 1997.
The report relates to monthly costs of maintaining a private current account regarding four variables: wage-earners with NIS 3,000 in overdraft credit making 20 transactions per month and using an average 50% of their allocated credit per month; wage-earners with NIS 3,000 in overdraft credit making 20 transactions per month and using an average 150% of their allocated credit per month; wage-earners with NIS 7,500 in overdraft credit making 40 transactions per month and using an average 50% of their allocated credit per month; and wage-earners with NIS 7,500 in overdraft credit making 40 transactions per month and using an average 150% of their allocated credit per month.
The Bank of Israel report reveals that the average monthly cost of maintaining a private current account is NIS 44.73 at Bank Leumi for wage-earners with NIS 3,000 in overdraft credit making 20 transactions per month and using an average 50% of their allocated credit per month. Those using an average 150% of their allocated credit per month were charged NIS 102.73 in monthly costs. The monthly cost at Bank Leumi for wage-earners with NIS 7,500 in overdraft credit making 40 transactions per month and using an average 50% of their allocated credit per month was NIS 107.04, while those using an average 150% of their allocated credit per month were charged NIS 243.29 in monthly costs.
At Union Bank, wage-earners with NIS 3,000 in overdraft credit making 20 transactions per month and using an average 50% of their allocated credit per month were charged NIS 51.35. Those using an average 150% of their allocated credit per month were charged NIS 114.23 in monthly costs. The monthly cost at Union Bank for wage-earners with NIS 7,500 in overdraft credit making 40 transactions per month and using an average 50% of their allocated credit per month was NIS 119.58, while those using an average 150% of their allocated credit per month were charged NIS 276.76 in monthly costs.
Bank Hapoalim had the lowest costs among Israel’s seven banks, including the three largest banks. Wage-earners with NIS 3,000 in overdraft credit making 20 transactions per month and using an average 50% of their allocated credit per month were charged NIS 39.35. Those using an average 150% of their allocated credit per month were charged NIS 89.23 in monthly costs. The monthly cost at Union Bank for wage-earners with NIS 7,500 in overdraft credit making 40 transactions per month and using an average 50% of their allocated credit per month was NIS 91.45, while those using an average 150% of their allocated credit per month were charged NIS 216.14 in monthly costs.
Other findings included in Bank of Israel’s report:
- The low monthly cost at Bank Hapoalim stems from relatively low interest on withdrawals.
- Bank Discount and Mercantile Discount Bank have the lowest management and information fees, not taking into account interest on excess withdrawals, for those earning wages of up to NIS 10,000. This is in light of the fact that the per-transaction cost at these banks is lower than at other banks.
- Management and information fees at Bank Leumi significantly raise costs of those accounts with up to NIS 6,000 in allocated monthly overdraft credit. This is in light of NIS 6.9 in fixed management fees and NIS 2 (or NIS 1.3-5 depending on the type of account) in credit allocation fees. A similar practice is carried out at Discount Bank, for wage earners with salaries exceeding NIS 10,000. Discount Bank charges a fixed management fee of NIS 6.75.
It should be noted that as of February 1997, annual interest on overdraft credit allocation for wage-earners was: 23.4% at Union Bank, 19.2%-21.7% at Bank Leumi, 19.6% at Discount Bank and First International Bank, 17.7-20% at Mizrahi Bank and 17.9-19.7% at Mercantile Discount Bank. Bank Hapoalim interest levels on credit reached 16.9% on sums of up to NIS 1,000 and 18.4% from NIS 1,000 and up to the credit limit.
As of early February, charges on sums exceeding the approved credit limits reached 3.9% at Mercantile Discount Bank, 3.5% at Union Bank, 3.1% at Hapoalim and 3% at Leumi, Mizrahi and First International.