The interest rate is rising and you can and should (even must) get a return on your free money. Don’t leave it in a checking account, it’s lying around without getting a return, don’t leave it in a daily/weekly deposit, there are many options to get a return – completely risk-free. Besides, you should keep checking other banks – in a world of high inflation and rising interest rates, you should to receive much more than you currently receive at the bank.
But it is more than that: there is now inflation of 5.1% in Israel, according to October data. That is: doing nothing is also a risk – it is a 100% risk of losing the money to inflation. It is not true that money left in the checking account has not been harmed – certainly it has been harmed. We’ll say it again: leaving the money in transit is worth burning it. Money loses its value. So there are alternatives. True, the interest you will receive on the deposits is lower than inflation, which means you will lose money, it will erode – but it will erode less. You will gain at least part of the story. Less of your money will go to waste. It will still be a real loss of money, but it will be a smaller loss. This will protect you from inflation, at least partially.
The Israeli public is sitting on mountains of cash. 1.5 trillion shekels. That’s a lot. The problem is that only a small part of the public really cares about getting the good returns and that’s a shame, it’s like throwing money in the trash, or rather – donating to the banks.
So the banks did not transfer all of the Bank of Israel’s interest rate increase to deposits, they increased less and created a margin for themselves. On the other hand – they did increase the entire margin on the credit they distribute to the public. The reason is because they can, because there is really no competition between the banks in Israel. But still, if you can get higher interest rates than zero on a checking account – why not actually?
In any case, according to data from the Bank of Israel, the public deposited more than NIS 100 billion in deposits in the last two months. But the question is – did it go to the right places, where you will get the highest interest rates, or simply to the bank where your account is managed. It probably went there.
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In October, NIS 27.7 billion came in as fixed interest deposits and another NIS 25.5 billion in variable interest (increases/decreases according to the Bank of Israel’s interest rate decision).
Here are the interest rates on deposits at a fixed rate – Mizrahi and Discount are the leading depositors for one year:
And here are the variable interest deposits – Bank One Zero is in first place, and the Bank of Jerusalem is next to it. This interest rate will rise next week, when the Bank of Israel will raise the interest rate:
Now there is a comparison option:
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