Israel's Digital Banking Revolution
Israeli banking has traditionally been dominated by five large banks, but a new generation of digital-first options is changing the landscape. For olim who are used to the zero-friction banking experience of apps like Monzo, Revolut, Chime, or SoFi, these Israeli alternatives may feel much more familiar.
Digital banks in Israel offer zero or near-zero עמלה (Amlah) (fees) on everyday banking. No monthly maintenance charges, no ATM fees at their own machines, and no paper statement surcharges. The tradeoff is that they lack physical branches and some offer limited אשראי (Ashrai) (credit) products.
What matters most when choosing a digital bank?
Five factors decide whether a given digital bank fits you, in order of impact. Israel's digital-banking scene is still young: the first standalone digital-bank licence in over four decades was granted only recently, with a second new licence launching in 2026, so the competitive picture is still shifting. Weigh the factors you control rather than any bank's marketing headline.
What matters when choosing a digital bank, in order of impact
- Digital app experienceThe app is almost your entire relationship with a digital bank, so speed, clarity, and how much you can do yourself define daily life - and note most Israeli banking apps are Hebrew-first.
- Regulation and stabilityCheck whether it holds a full Bank of Israel banking licence or is the digital brand of an established bank. Both sit under supervision but differ in independence and product range.
- FeesThe core draw is low or zero everyday fees, but look past the headline to charges on out-of-network ATMs, foreign currency, and unusual transactions.
- Customer serviceWith no physical branch, the quality and availability of chat, phone, and video support is what decides how easily you resolve a problem in a real moment.
- Fit for foreign citizens and FATCAUS citizens and anyone with a foreign reporting obligation should confirm the bank accepts such customers and supports the relevant reporting before opening an account.
Pepper (by Bank Leumi)
Pepper is Israel's most established digital bank, launched by Bank Leumi in 2017. It operates as a fully licensed bank and is the closest thing Israel has to Monzo or Chime.
- Monthly fee: 0 NIS
- ATM withdrawals: Free at any Israeli ATM up to a monthly limit (after that, a small fee applies)
- Standing orders (הוראת קבע (Hora'at Keva)): Free to set up and maintain
- App language: Hebrew only - a meaningful limitation for new olim
- Salary deposits: Fully supported - employers can pay directly into your Pepper account
- Credit card: Included, Visa-based, no annual fee
- Overdraft: Available after establishing account history
- Branch access: None (Pepper-only) - but you can use Leumi branches for some services
Language note: the app is Hebrew-only, so olim without intermediate Hebrew typically rely on a translation tool to navigate it. Like other digital banks, it carries no monthly account fee, which matters most once an oleh package at a traditional bank expires.
One Zero
One Zero launched in 2022 and positions itself as an AI-powered digital bank. It's more ambitious than Pepper in scope - offering investment services, savings products, and a personal financial management layer alongside basic banking.
- Monthly fee: 0 NIS for the basic account
- ATM withdrawals: Free up to a monthly limit
- Investment integration: Can hold savings products and connect to investment accounts in-app
- App language: Hebrew only
- Availability: Application process is digital, but approval is not instant - expect 1-5 business days
- Credit products: More limited than traditional banks for new customers
Note: the account combines everyday banking with basic investing in one app, and the interface is Hebrew-only.
What other banking options should olim know about?
- Credit-card companies: Not banks, but Israeli credit-card companies offer prepaid and spending accounts that some olim use for specific purposes. Not a replacement for a bank account.
- Bit and PayBox (payment apps): Israel's version of Venmo or Zelle. Bit (by Bank Hapoalim) and PayBox (by Bank Discount) are used for peer-to-peer payments. You'll need an Israeli bank account to use them, but once set up, they're how most Israelis split bills and pay each other. You'll use these constantly.
- Revolut: Available in Israel and popular with olim for international transfers and multi-currency spending. Not an Israeli bank (no IBAN), so it can't receive salary or government payments. Useful as a supplemental tool, not a main account.
- Wise: Similarly useful for international transfers, with a multi-currency account. Can hold NIS and other currencies. Not a substitute for an Israeli bank account but excellent for moving money across borders efficiently.
How do many olim structure their banking?
A common structure combines two accounts. In year one, a traditional bank with an oleh package provides the branch access, face-to-face support, and formal infrastructure for Sal Klita payments and employer salary deposits. Bit or PayBox is typically set up right away for peer payments.
Once the oleh package begins to expire, some olim add a digital bank for everyday spending, since the zero monthly fees change the day-to-day cost, while keeping the traditional account open (often free with minimal activity or a mortgage) for the services digital banks can't yet provide. Which digital bank fits is a separate comparison - see the Meidahon reviews below.
For regular international transfers, a multi-currency service such as Wise can hold NIS and other currencies, typically at a better exchange rate than an Israeli bank's.
What can't Israeli digital banks do yet?
Before going fully digital, be aware of the current limitations:
- No physical branches for complex problems or document submission
- Limited mortgage products (you'll need a traditional bank for a mashkanta)
- Hebrew-only apps make early-stage navigation harder
- Some employers still require a "proper" bank account for salary payment
- Government benefit deposits (Sal Klita, Bituach Leumi) work best with traditional bank accounts, though Pepper does support these
The landscape is evolving quickly. What's true today may change - One Zero in particular is actively expanding its product range. Check current reviews in English-speaking olim community forums (like Nefesh B'Nefesh groups) for the most up-to-date real-world experiences.
Compare digital banks in the Meidahon reviews
See app experience, regulation and stability, fees, and customer service for Israel's digital banks side by side, in an independent review by the Meidahon editorial team.
Compare the digital banks
Israel's two main digital banks, Pepper (launched by Bank Leumi in 2017) and One Zero (launched 2022), both charge 0 NIS in monthly fees, give free ATM withdrawals up to a monthly cap, and feel familiar to olim used to Monzo, Revolut, Chime, or SoFi. Pepper operates under a full banking license and supports salary deposits, a no-annual-fee Visa credit card, and standing orders (Hora'at Keva) for free; One Zero adds AI-driven money management and integrated investment products, with approval taking 1 to 5 business days. The two real catches for olim: both apps are Hebrew-only, and neither offers a mashkanta (mortgage). Most olim therefore keep a traditional bank in year one for the oleh package, branch access, and Sal Klita and salary deposits, then move everyday banking to a digital bank around year two when the oleh package expires. Install Bit (by Bank Hapoalim) or PayBox (by Bank Discount) right away for peer-to-peer payments, and add Wise or Revolut for international transfers, since those tools cannot receive Israeli salary or government payments.
The two established options are Pepper and One Zero. Pepper, launched by Bank Leumi in 2017, is Israel's most established digital bank, operates as a fully licensed bank, and is the closest thing Israel has to Monzo or Chime. One Zero launched in 2022 and positions itself as an AI-powered digital bank, more ambitious in scope with investment services, savings products, and a personal financial management layer on top of basic banking. Both are app-first and fee-free for everyday banking.
For everyday banking, yes. Both Pepper and One Zero charge 0 NIS monthly fees on their basic accounts. ATM withdrawals are free at any Israeli ATM up to a monthly limit, after which a small fee applies. Pepper also sets up and maintains standing orders (Hora'at Keva) for free and includes a Visa-based credit card with no annual fee. There are no monthly maintenance charges, no ATM fees at their own machines, and no paper statement surcharges. The tradeoff is no physical branches and, for some, more limited credit (Ashrai) products.
No. Both the Pepper and One Zero apps are Hebrew-only, which is a meaningful limitation for new olim. Pepper is best suited to olim who have intermediate Hebrew or are willing to use Google Translate to navigate the app, and One Zero similarly assumes you are comfortable with a Hebrew interface. Neither has reached Monzo's level of English-language polish yet, so early-stage navigation is harder until you build some Hebrew comfort.
No. Neither Pepper nor One Zero currently offers mashkanta (mortgage) products, and mortgage offerings are listed as a current limitation of Israeli digital banks. For a mashkanta you will need a traditional bank. This is one of the main reasons most olim keep a traditional bank account open alongside a digital bank rather than going fully digital.
Salary deposits are fully supported by Pepper, so employers can pay directly into your Pepper account, and Pepper also supports government benefit deposits such as Sal Klita and Bituach Leumi. That said, government benefit deposits generally work best with traditional bank accounts, and some employers still require a more conventional bank account for salary payment. Note that supplemental tools like Revolut and Wise are not Israeli banks and have no IBAN, so they cannot receive salary or government payments.
A common structure emerges among olim. In year one, use a traditional bank with your oleh package for the branch access, face-to-face support, and formal infrastructure needed for Sal Klita payments and employer salary deposits, and set up Bit or PayBox immediately for peer payments. Once the oleh package begins to expire, many add a digital bank as their primary day-to-day account for the zero fees while keeping the traditional bank account open for services digital banks cannot yet provide. Which digital bank fits is a separate comparison, covered in the Meidahon reviews. If you move money internationally, add a multi-currency service such as Wise specifically for transfers, since its exchange rate is typically better than an Israeli bank’s.
Bit (by Bank Hapoalim) and PayBox (by Bank Discount) are Israel’s peer-to-peer payment apps, comparable to Venmo or Zelle. They are how most Israelis split bills and pay each other day-to-day, and you will use them constantly. You need an Israeli bank account to activate them, but once set up they are essential. The guidance is to install Bit or PayBox immediately on arrival.
Both are useful supplemental tools, not replacements for an Israeli bank account. Revolut is available in Israel and popular for international transfers and multi-currency spending, but it is not an Israeli bank and has no IBAN, so it cannot receive salary or government payments. Wise offers a multi-currency account that can hold NIS and other currencies and is excellent for moving money across borders efficiently, with an exchange rate the article notes is consistently better than any Israeli bank’s. Olim from the US in particular are pointed to keeping Wise or Revolut for international transfers, since the Israeli digital banks do not offer a US routing number or fee-free wires to US accounts.
