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Guide to managing your bank account

Author: Yossi Lax and Bell System

Your family’s most important financial enterprise takes place right here in your bank account. If we compare the management of our family bank account to the financial management of a business, we will emphasize the importance of managing the account as ‘initiators’ rather than ‘trailers’.

A well-managed bank account gives you an up-to-date picture of what is happening in the account at any point in time and allows you to plan your conduct according to the money you have.

Manage your bank account and don’t let it manage you!

So how do you manage a bank account?

Bank-customer relations

As a customer, you can choose a bank, choose a bank branch, switch banks, open another account and close a bank account.

The bank in which your account is managed is the one that determines the amount of credit to the customer, the terms of the loan and the interest rates, and it does this according to the customer’s risk level. The bank can reduce or expand credit facilities, reduce or offer an increase in credit, worsen or improve the terms of the account, all in accordance with the quality of the customer and the customer’s ability to negotiate with the bank. The bank’s aspiration is for the customer to meet his obligations and return (with interest) the money borrowed from the bank.

The bank also has flexibility

It is important to know that conditions at the bank are not the same for all customers. The conditions you receive from the bank are determined by:

Your level of risk as a customer: The bank will provide less favorable conditions to a customer that the bank estimates that will have difficulty repaying his debts.

The amount of assets you own, such as a study fund, savings and investments: The bank provides preferential terms to customers who own assets that attest to their ability to save and better meet their obligations to the bank.

Trust between the customer and the bank: Establishing a good relationship of trust means better conditions for the customer.

In many cases, the offer that the bank offers you is not the final and best offer you can receive. Know that banks have various terms and different offers, designed to allow them to compete with other banks.

Get the information you need

Today, you can get the information you need to make the best decision easily and free of charge at any bank. Do not hesitate to ask the bank for all the information you need. The bank is obliged to provide you with the information by law.

Before buying a service or product from the bank, it is worth comparing prices between several banks. As in any competition, a competing bank sees you as a potential customer and will make an effort to give you the best terms. Comparing the offers will clarify which offer is better for you and will equip you with relevant information when negotiating at the bank.

Understand the information you’ve received

Before making decisions, it is recommended to familiarize yourself with basic banking concepts, such as credit overdraft, types of fees and their rates, interest, prime plus, indexation, fixed interest, variable interest, compound interest, etc..

You can learn about these terms in several ways:

Self-study on the Internet: The Bank of Israel’s website provides comprehensive explanations on banking topics and you will also find a glossary that can be used by you. Banks’ websites also provide you with guides and a glossary that you can use.

Asking questions to the bank – The banks and bankers are obligated to explain everything that needs an explanation, and in case you do not understand the explanation, insist on your right to receive a clear answer. Ask for the information in terms of money, so you can compare offers offered to you.

Consultation with professionals and acquaintances who understand the field – ask them to explain to you what is needed and use their knowledge and experience to make decisions.

Monitor regularly

Regularly monitor the financial movements in your account to ensure that the revenue covers the expenses, check the transactions due and those due to you. If you find an incorrect charge, credit or unclear fee, contact your bank or service provider for an explanation.

Keep track of your credit card spending online or through your credit card company’s voicemail, so you can track the amounts due on your cards next month or check charges for previous months. Make sure that on the day the credit card is charged there is sufficient balance on the account to honor the charges.

Get in the habit of checking your bank accounts once a week or every other week. This habit will verify your exact situation, and allow you to prepare accordingly and prevent unpleasant ‘surprises’.

You can keep track of your account by connecting online to your online bank account. The “Email Messaging” service will allow you, if you join it, to track messages and letters that the bank sends you electronically. Messages will be received to a personal and secure email box on the bank’s website. You can also use the service offered by some banks to receive real-time alerts and messages to your mobile device.

Attention! Since July 2014, the banks are obligated to maintain the benefit given to you when taking out a loan or when opening a deposit throughout the term of the loan or deposit, even if the benefit was given because you belong to a certain group of customers, such as students and lawyers, and you no longer belong to that group.

It is important to maintain a proper relationship with the bank. It is recommended to create a positive and non-confrontational atmosphere in meetings with bank personnel at all levels. This is even more important if you find yourself in financial distress and the help of the bank is essential for you. In this case, explain to the banker why your request will not endanger the bank and try to convince him that he is guaranteed to get all his money back. Reliability is key!

Consider switching to uniform commission plans

According to the law, the banks include the option of uniform commission tracks, according to these tracks, for a predetermined number of transactions, the customer also pays a predetermined amount. There are two tracks:

Basic track – the possibility of performing up to 10 actions through a direct channel and up to one clerk’s action, at a supervised price of up to NIS 10.

Extended track – the possibility of performing up to 50 actions through a direct channel and up to 10 clerk actions.

There are small differences in the cost of the plans at the different banks, but it is easy to compare the prices of these plans between the banks.

How do you know if it’s worthwhile for you to switch to a uniform commission plan?

You can ask a bank representative to show you the amount you actually paid for account fees in the last three months or download such a report on the bank’s website.

How do you actually switch to uniform commission plans?

The option exists on the website of each of the banks, and you can also contact the bank clerk with a request.

Need to increase your credit limit?

Have you used your credit limit fully and need more money for your ongoing needs? Just before you turn to the bank to ask for an increase in the credit limit, ask yourself whether such an increase will indeed solve your cash flow problem or whether next month you will find yourself in exactly the same situation.

If your problem stems from the fact that you consume more than you put in, it is better to face reality, otherwise your situation will get worse, because your debts will only intensify. Linking to budget managers, making a decision.

If you do decide in favor of increasing the framework, make sure to increase it only by the amount you lack and no more, so as not to accustom yourself to acting this way every time you need to cover the family’s monthly deficit.

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