The Bank of Israel published today (Sunday) for the second time the average interest rates offered by the banks on deposits to the public, from which it appears that in September, after the penultimate interest rate increase by the Central Bank (at the end of August), the banks raised the interest rate, but did not pass on to the public on all deposits the The full increase was 0.75%.
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On the other hand, the data reveal that the same interest rate increase was immediately and fully transferred to loans, with the average in the banking system jumping from 6.57% to 7.23%, and some banks even raised the interest rate on loans by more than 0.75%.
With a fixed interest rate, in short-term deposits of up to 3 months, the bank that offered the best interest rate was the Bank of Jerusalem with an interest rate of 1.79%, followed by the International Bank (1.34%), Mercantile (1.27%) and the Po’aleim (1.23%). For comparison, in August the interest rates of those banks were 1.36%, 0.86%, 1% and 0.81%, respectively. In other words, the Bank of Jerusalem, the International and the Po’aleim raised the interest rate by half a percent, while Mercantile settled for about a quarter percent. Overall, in the banking system, the interest rate for this segment increased from 0.46% in August to 0.73% in September.
The most “generous” bank
For a fixed interest deposit for a period of between one and two years, Mizrahi Tefahot is the most “generous” bank with an interest rate of 3.58%, followed by Mercantil (3.08%) and Discount (2.9%). Mizrahi Tefahot raised the yield in this sector by the same rate as the Bank of Israel’s interest rate increase, while Discount raised the offer by a much more significant rate after in August it offered an interest rate of only 0.34% on a deposit for one to two years. Here, in September, the average interest rate in the entire system rose to 2.59%, compared to 1.58% in August, so during this deposit period you can see that the banks have internalized the public criticism that has been heard about them in recent months.
For longer deposits, of up to five years, Mizrahi Tefahot (3.18%) and Po’aleim (3.13%) offer the highest interest rates. The system average in September was 2.7%, compared to 1.39% in August, here too it is an addition to the higher interest rate than the Bank of Israel’s interest rate increase.
In the variable interest deposit, based on the prime interest rate – the Bank of Israel interest rate plus 1.5%, the Bank of Jerusalem leads the ranking with an average interest rate of 2.32%, while overtaking the new digital bank, One Zero, which in September offered an average variable interest rate of 2.16%. In August, One Zero offered an average interest rate of 2.1% compared to 2.05% at the Bank of Jerusalem.
The two major banks, Leumi and the Poaleim, remained far behind in this segment, with Leumi offering an average variable interest rate of 0.83%, and the Poaleim 0.8%. Only Masad offers a less attractive interest rate of 0.69%.
The data shows that the longest repayment period for variable interest loans is at Mercantil and is two years, while at Hapoalim and Yahav banks the average repayment period is less than a month and a half.
On the other hand, if the Bank of Jerusalem excelled in providing interest on deposits, it is far behind in terms of the interest it charges on the loans it grants to customers. Here the average interest rate stood at 13.2%, while the average in the banking system was 7.23% in September, an increase of 0.66% compared to the average in the system in August.
The lowest interest rates on loans are offered by One Zero and they stand at 4.73%, while those of Discount stand at 5.74%. The International Bank is also below the industry average, while Hapoalim, Leumi and Mizrachi Tefahot are slightly above average with interest rates on loans that range from 7.5% to 7.6%.