On the one hand, the increase in interest rates is very burdensome for those who took out a mortgage, but at the same time there should be an opportunity for those who want to save on a deposit to earn a little more money. But the banks in Israel don’t really allow that to happen.
The banks’ method: while the Bank of Israel raises its interest rate, the big banks lower the interest rate on our savings. @amsterdamski2 shows how it works#The evening news pic.twitter.com/opVa4loy2T
— here news (@kann_news) August 31, 2022
Here is a private case of a customer who closed a certain amount of money in a deposit at Discount Bank for a period of 90 days. It happened in the middle of June and she received an interest rate of a little more than one and a half percent from the bank. Since June, the Bank of Israel has raised the interest rate twice by a total rate of one and a quarter percent. Did Discount Bank raise the deposit interest at the same rate? vice versa. The bank lowered the interest rate on its monthly deposits. And when the Bank of Israel raised the interest rate again – Discount Bank again worsened the terms of its customers’ deposits. And this case represents the conduct of all banks in Israel.
In other words: instead of passing on the interest rate increase to its customers, Discount Bank passed on the profit to its pockets. This is exactly how the banks earn about five billion shekels for every one percent increase in interest rates.
Governor of the Bank of Israel Prof. Amir Yaron to@MichalRabi and-@lielkyzer: High inflation hurts economic activity, we are determined to return inflation to the target. Increasing the supply of apartments will lead to an increase in prices. The Israeli economy has the capacity to absorb interest rate hikes https://t.co/VfVQp6iZPk#The evening news pic.twitter.com/1OgkF74rAL
— here news (@kann_news) May 23, 2022