Banks compete as new checking account rules go into effect

New regulation requires banks to let customers execute 10 activities on their own plus one teller-executed activity per month.

By NIV ELIS
Bank of Israel 370 (photo credit: Wikimedia Commons)
Bank of Israel 370
(photo credit: Wikimedia Commons)
The country’s banks did the Bank of Israel one better on Tuesday, offering competitive prices for the basic checking services that BoI regulations required them to start offering.
The new rules require every bank to offer a basic checking account that lets customers execute 10 activities on their own plus one teller-executed activity per month for a maximum of NIS 10.
While Bank Hapoalim, Leumi, Union, Otzar Hahayal, Masad, Yahab and Arab Israeli Bank complied to the letter of the law, offering accounts for exactly NIS 10, Discount, Mizrahi, First International and Poalei Agudat Yisrael offering theirs at NIS 9, while Mercantile offered it for 8.5.
Leading the pack was the Bank of Jerusalem, which offered the basic track for free, a service it has offered for some time.
Prices were more varied among the expanded tracks, also required by BoI, which include 50 customer-executed activities and 10 teller-executed activities.
Bank of Jerusalem, again, beat the pack with its no-fee offering, while the rest ranged from a low of NIS 20 per month (Leumi, Arab Israeli Bank) to NIS 30 per month (Masad).
Some of the banks are offering a premium (expanded- plus) track that includes the activities in the expanded track plus additional services that are unique to each bank. BoI is offering an online calculator to help customers figure out whether one of the new mandatory account types or their old account is best for them.
“The purpose of this measure is to increase the transparency of the costs of managing a current account at the banks, to improve the ability of the banks’ customers to compare prices, and to encourage competition in the area of bank fees in order to reduce costs,” Bank Supervisor David Zaken said.
Nothing will change automatically – customers who want to take advantage of the new offerings will have to actively change their account type at their bank.
“We recommend that fee-paying customers positively consider joining one of the tracks, in accordance with their activity profile in the account, since they represent a considerable reduction in the cost of managing a current account for households and small businesses,” Zaken said.
An additional measure that took effect on Tuesday reduces the minimum cost of managing an account from the total cost of two teller-executed activities to just one teller- executed activity. Customers with few activities could see their fees half.