Most of the banks again did not pass on the full interest rate increases to citizens' deposits

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by Ifi Reporter Category:Banking Oct 8, 2022

Most of the banks in Israel again did not pass on the full interest rate increases to citizens' deposits, the Bank of Israel published today (Sunday) a first comparison between the average interest rates given by each of the banks in Israel in practice for deposits and for credit. The data is expected to be updated once a month, thus helping the public to compare the conditions given by the various banks and, if necessary, to bargain and even switch banks. However, while the data may help customers compare, it does not present a complete picture.

For example, today's data is not divided according to the amount of the deposit or the amount of the credit - which of course may greatly change the interest rate offered to the customer (for example, a person who deposited a million shekels in a deposit will often receive a higher interest rate than someone who deposited 10,000 shekels for the same period of time).
While it is possible to compare deposits with a fixed interest rate for different time periods (up to three months, up to a year, up to two years, etc.), this comparison does not currently exist on the bank's website with regard to deposits with a variable interest rate, which of course are also determined according to the target period of the deposit. Even with regard to the variable interest rate on credit, only average and partial data are presented.
In addition, today the data is based on the average interest on deposits and credit that were deposited or given to households during that specific month, so it is difficult to know which of the banks gives the best conditions over time. The bank notes that this is the first stage of the process, and that "already during the first quarter of 2023, further expansion of the information displayed on the website is expected and data will be added that will expand the comparison."
From the data that has been published now and is correct for last August, a very similar situation emerges to the one that was published after the last interest rate increase. For example, the data shows that the digital bank One Zero and the Bank of Jerusalem offer significantly higher interest rates on variable interest deposits and offered an average interest rate of 2.05%-2.10% during this period.
The data also shows that Bank Yahav and Bank Leumi gave the lowest average interest rate (on variable interest deposits) - 0.42%-0.44%, Bank Hapoalim and Discount Bank only slightly above them with 0.57% and Bank Mizrahi Tefahot, International and Mercantile with a higher interest rate - if because it is still about half lower than that offered by One Zero and the Bank of Jerusalem - 0.90%-1.11%.
In deposits of three months to one year at a fixed interest rate, which will not benefit from the expected increase in interest rates this week, Mercantile Bank and Bank Discount led with an average interest rate of 2.31% and 2.25%, respectively. The Bank of Jerusalem offers 1.93% on the same deposit and the Hapoalim and National Banks offer 1.46% and 1.71%, respectively. Bank One Zero currently does not offer fixed-interest deposits.
The Supervisor of Banks, Yair Avidan, said upon the publication of the data: "As part of the many consumer reforms promoted by the bank in recent years, today we are publishing information about the interest rates of the deposit and credit products for households, broken down by the various banks. I believe that this step will help strengthen the power of The customer and provide the ability to make an informed decision, after examining the entirety of the data in a simple, accessible, and convenient manner."

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