Bank Leumi (level:room) And Mizrahi Bank (TASE: MZTF) became the first two Israeli banks to join Bank of Israel Governor Prof. Amir Yaron’s call to pay interest on consumers’ checking accounts. Banks also fear legislation to raise taxes on their growing profits as interest rates rise. However, the benefits offered are very limited. Banks will also reduce the interest paid on overdrafts.
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Leumi will pay 2% annual interest on current account balances of up to NIS 25,000 to clients who pay their salary or pension into the account and have two Leumi products – either a mortgage, a credit card with an average monthly expenditure of at least NIS 4,000, or a portfolio Finance. This will go into effect on August 1.
Leumi will pay 1% annual interest on current account balances of up to NIS 10,000 to clients who pay their salary or pension into the account and have a mortgage from Bank Leumi or a credit card with an average monthly expenditure of at least NIS 3,000. This will go into effect on July 1.
At the same time, Leumi will reduce overdraft interest rates by 2% for private clients with overdrafts in the first stage and by 1% for overdrafts in the second stage.
Mizrahi Tefahot will pay 2% annual interest on current account balances up to NIS 25,000. The advantage is for customers who have at least NIS 50,000 in the bank in their checking accounts, deposits, and securities portfolio. Income tax will be deducted on the interest every three months.
Mizrahi-Tefahot will also cut the overdraft interest by 1%-2%. The annual interest currently charged on overdrafts ranges between 13.25% and 18.45%.
Published by Globes, Israel business news – en.globes.co.il – on June 29, 2023.
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