Mad Hon · Emergency fund

Build an emergency fund in shekels

Build an emergency fund in shekels. A step-by-step Mad Hon guide for your Emergency fund score, written for olim.

1. Open an account separate from your current account.
Seeing the fund apart from spending money is the strongest defence against spending it. A second account at your existing bank, a pikadon yomi (an overnight deposit that stays accessible), or an account at one of the digital banks all work. Check there is no monthly fee on an account with little activity, which some Israeli accounts still carry.
2. Set a monthly standing order, and start small.
Five to ten percent of salary is a reasonable place to start, and ₪250 a month is a real start if that is what fits right now. Date the hora'at keva to your payday so the money moves before it is available to spend.
3. Start with a token standing order. Even ₪100 counts.
On a modest income every shekel in the standing order is felt. Pick an amount you would not notice missing, ₪100 or ₪150 a month, and automate it on payday. Raise it as income rises. The fund is built by the habit, not by an impressive opening figure.
4. Check that it is genuinely liquid.
An emergency fund does not belong in ETFs, shares or anything with a lock-up. It belongs in an overnight deposit or a savings account with no minimum term. The working test: if getting at the money takes more than 48 hours, it is not liquid enough to be the emergency fund.
5. Decide how much of it sits in shekels.
This is the question an oleh has and a local does not. Your emergencies are priced in shekels, so the buffer should be too, and money left in your home currency carries exchange-rate risk against the bills it is meant to pay. Keeping some abroad can still make sense while you have obligations there; the point is to choose the split deliberately rather than inherit it.
6. Look at what the balance earns.
Several Israeli banks, the digital ones in particular, pay interest on a current-account or overnight-deposit balance, which compounds the fund while it waits and leaves the money available. Compare the rate against any account fee before moving, because a fee can outweigh the interest on a small balance.

Build an emergency fund in shekels. A step-by-step Mad Hon guide for your Emergency fund score, written for olim.

1. Open an account separate from your current account.

Seeing the fund apart from spending money is the strongest defence against spending it. A second account at your existing bank, a pikadon yomi (an overnight deposit that stays accessible), or an account at one of the digital banks all work. Check there is no monthly fee on an account with little activity, which some Israeli accounts still carry.

2. Set a monthly standing order, and start small.

Five to ten percent of salary is a reasonable place to start, and ₪250 a month is a real start if that is what fits right now. Date the hora'at keva to your payday so the money moves before it is available to spend.

3. Start with a token standing order. Even ₪100 counts.

On a modest income every shekel in the standing order is felt. Pick an amount you would not notice missing, ₪100 or ₪150 a month, and automate it on payday. Raise it as income rises. The fund is built by the habit, not by an impressive opening figure.

4. Check that it is genuinely liquid.

An emergency fund does not belong in ETFs, shares or anything with a lock-up. It belongs in an overnight deposit or a savings account with no minimum term. The working test: if getting at the money takes more than 48 hours, it is not liquid enough to be the emergency fund.

5. Decide how much of it sits in shekels.

This is the question an oleh has and a local does not. Your emergencies are priced in shekels, so the buffer should be too, and money left in your home currency carries exchange-rate risk against the bills it is meant to pay. Keeping some abroad can still make sense while you have obligations there; the point is to choose the split deliberately rather than inherit it.

6. Look at what the balance earns.

Several Israeli banks, the digital ones in particular, pay interest on a current-account or overnight-deposit balance, which compounds the fund while it waits and leaves the money available. Compare the rate against any account fee before moving, because a fee can outweigh the interest on a small balance.