The interest rate increases in the economy, after many years of zero interest, breathed new life into the solid market that was dormant.
Currently, the interest rate stands at 2%, and according to all forecasts, it is going to continue to rise as long as inflation continues to accelerate.
In the new reality, the deposits offered by the banks are an investment alternative that becomes interesting again after a long period. The money is lying in the bank, but now it also yields a return, and it is even safe.
What is the yield? Well, even though the interest rate in the economy started to rise already in April, the banks did not hurry to update the interest they pay on the deposits. Only recently, following severe public criticism, some banks began to internalize the criticism and every day another bank publishes updated offers to the public.
So what can be done with the money over the next year, by investing in shekel deposits with a fixed interest rate? The website “Hon Madarihim Financial” carried out an examination of the various banks’ offers and came back with a breakdown of them and some clear conclusions. But before that we will also introduce you to financial funds – mutual funds that provide an advantage to the solid investor over direct investment in deposits. These funds manage a lot of money and therefore get a better return from the banks. Besides, they are flexible, they move from one solid asset to another with relative ease when a large part of their money is also invested in MCM – a short-term lender which is basically a government bond for a short time (to expand on monetary funds and MCM).
What does each bank offer?
discount – The bank sharply raised the interest rate on deposits, and for a digital deposit for a year or more, at a fixed interest rate, it now pays 3%. At the same time, the bank raised the interest rate on deposits for one year or more at a variable interest rate, which will now be the same as the Bank of Israel’s interest rate: 2% (prime minus 1.5%), and will be updated in accordance with the Bank of Israel’s future interest rate changes.
Mizrahi Bank – The bank updated the interest rates on an orange deposit, which is a four-year deposit. According to the updated offer, the interest on the deposit is 3.2% at the end of the period. However, if you choose to exit earlier during the period, the interest rates will be lower: at the end of six months to a year the interest rate will be 2%, and at the end of one to one and a half years it will be 2.6%. Over a year and a half, the interest rate will be 3%, and only if you continue to hold the deposit until the end of the four-year period will you receive the maximum interest rate of 3.2%, as stated.
national – Leumi also recently updated the interest rate on deposits, and these are his proposals:
- A two-year index-linked deposit – which pays an index + 0.5% annual interest – to preserve the value of money in a variable inflation environment, starting with an amount of NIS 1,000.
- A two-year fixed interest deposit – which pays 6.6% interest at the end of the period (3.25% annual interest) – starting with an amount of NIS 1,000.
- Safe savings routes:
- Safe savings in a monthly deposit for a period of 3 years – from NIS 100 a month to NIS 10,000 a month, with an annual interest rate of 3.5%.
- Safe savings in a monthly deposit for a period of 5 years – from NIS 100 a month up to NIS 10,000 a month, with an annual interest rate of 3.7%
Bank of Jerusalem – Offers his customers an interest rate of 2.3% per year
One Zero – The new digital bank offers the option of depositing at the interest rate of prime minus 0.85%. This means interest on the deposit of 2.65%. Both in Jerusalem and in One Zero, if you arrive with a large sum there is a possibility that you will receive another tenth or two.
working – Currently the bank has not updated its interest rate offers on deposits and is offering an interest rate of 1.6%-1.7% on deposits per year at a fixed rate.
the international – Both the International Bank and the subsidiary bank, Otsar Hayal, have not updated their offers as of now, and they offer 2% interest on a deposit for a year at a fixed rate.
Where is the most profitable?
So which bank will give you the best interest rate on a one-year deposit at a fixed rate? First, we emphasize as mentioned that not all banks bothered to update their offers according to the current interest rate in the economy. Among the banks that made an update, Leumi’s offer is good but refers to a two-year deposit, while Mizrahi’s also gives an interest rate of over 3% but only at the end of four years.
Bottom line, after examining all the updated bank offers, it seems that the discount bank’s offer, which offers 3% interest on a deposit per year, is the most profitable.
For additional guides on the capital website:
Guide to mutual funds – advantages and disadvantages
Provident fund for investment – everything you need to know
* The guide was written by the capital website system, financial guides. The information and data in the guide do not constitute a recommendation to buy or sell any assets; and are not a substitute for advice that takes into account the data and needs of each person.