Following the Governor's meeting with the banks a week ago, Mizrahi-Tefahot Bank is launching a move today (Wednesday) for customers, in the framework of which, starting at the beginning of July, it will grant an interest rate of 2 percent (in annual terms) to customers whose accounts have a current account balance of up to NIS 25,100. According to estimates, the move will cost the bank more than NIS <> million.
Yesterday, the Governor urgently appealed to the Prime Minister to remove from the agenda the bill requiring the banks to provide interest on the reserves. We also note that the interest rate in the economy currently stands at 4.75 percent.
Bank of Israel Governor Prof. Amir Yaron at the Finance Committee // Credit: Knesset Channel
The benefit is intended for private account holders, whose total assets in the account (current account + deposits + securities) is up to NIS 50,<>.
The benefit will be valid for a period of one year. The customers' account will be credited with the amount of interest, less tax, once a quarter.
Reduction of interest on the overdraft
In addition, the Bank will reduce by up to 2 percent the interest charged on the overdraft in the accounts of all private customers (in the relevant credit facilities), according to the following details: a reduction of 1 percent from sub-framework A; a reduction of 1.5% from subframework B; 2% reduction from subframework C. The benefit will be valid for a period of one year.
The bank will reduce by up to 2%, (illustrative), photo: Joshua Yosef
Credit of NIS 1,200 to mortgage customers Against the background of the increase in monthly mortgage repayments, as a result of the increase in the prime interest rate, the Bank will grant borrowers who meet the appropriate criteria, and whose loan was made until May 2023, a special credit of NIS 1,200, against mortgage repayments, directly to the account from which the loan is paid.
The credit will be given in four doses of NIS 300, once a quarter, starting in mid-July 2023.
Customers eligible for the benefit:
Owners of a loan that is paid properly, for the purchase of a single residential apartment, which includes a prime component. This is in addition to the following criteria, as they were at the time the loan was taken: the value of the property – up to NIS 2 million; funding rate – 60% and above; Return to income ratio – 30% or more.
Mizrahi Tefahot branch in Ness Ziona // Photo: Yossi Zeliger,
Upon embarking on this unique move, Bank of Israel CEO Moshe Larry said: "Our benefits package relates to the areas of banking activity, with the broadest common denominator: the plus and overdraft in current accounts and mortgages. This means that hundreds of thousands of the bank's customers will benefit from it. We are certainly attentive to the state of the cost of living in Israel, and the difficulty it creates for many families. The public discourse and the expectation from the banks to make it easier for customers during this complex period also did not go unnoticed, and therefore we decided to initiate an unusual consumer move for the benefit of our customers. In order to make it easier for the relevant customers, joining the benefits will be done automatically, and there is no need to contact the bank about it," noted Moshe Larry.
According to him, the bank's benefit in the area of current account interest does not replace the need of customers who have money balances in their accounts to actively act in order to maximize the maximum value for their money. "We invite customers who have a balance in their account that they do not need immediately, to use Mizrahi-Tefahot's attractive fruit deposit basket, and to choose from there the deposit that best suits their needs," said the bank's CEO.
It should be noted that in addition to the new benefits package, the Bank continues to offer the unique benefit: "The Overdraft is on Us", which is intended for Tefahot's mortgage customers, who also manage a current account at the bank. Customers who wish to join the benefit will be exempt from the interest on the overdraft in the account, up to the monthly repayment of the mortgage or up to NIS 6,000, whichever is lower.
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