In this guide, I will explain the best way to transfer money to Israel, as well as transferring money from Israel. As an Israeli who has been making international money transfers to Israel and from Israel myself, a lot of this comes from first-hand experience. Additionally, as the managing director of Money Transfer Comparison, this guide takes into account a broad view of both Israeli and non-Israeli international money transfer companies.
How to Transfer Money from Israel?
You can transfer money from Israel internationally through Israeli banks. As of 2023, it’s still the most common way to send money from Israel. Each of the major 5 banks in Israel support international money transfers, with the most popular destinations being transferring money from Israel to USA, EU, and UK (but also a variety of other destinations as Israel is a young country with vast immigration).
You can also send money from Israel abroad, to any country in the world using a service like PayPal. Additionally, one uncommon but wallet-friendly way to transfer money from Israel is through a handful of commercial money transfer companies licensed and regulated in Israel, which is the best way to transfer money from Israel for many of the use-cases.
How to Transfer Money to Israel?
Transferring money from USA, UK, or Europe to an Israeli bank account is easy as transferring money to any other destination. It would be a rare occasion for any major bank globally to not have the possibility of transferring money to Israel. Some Israelis would also have a USD or EUR denominated bank account, so that if you are making an international payment to Israel you could transfer it in the same currency instead of having to conduct a currency exchange to the Shekel, which could be expensive.
As Israelis can register on PayPal, you could transfer money to Israel through PayPal or similar high-profile platforms. Venmo is not supported as it is only for U.S residents. Pay attention that transferring money to Israel through PayPal will be costly, or potentially – very costly if currency exchange is involved. Transferring money with PayPal costs approx. 5% just for the currency exchange on top of payment fees and withdrawal fees.
Another great way to transfer money to Israel from abroad is through a designated money transfer service. The best international money transfer companies are widely available for residents of the UK and Europe, with most also accepting customers from the USA, Australia, Canada, and New Zealand. Money transfer companies are the cheapest way to transfer money to Israel for most use cases.
Which currency is used in Israel?
The currency used in Israel is the Israeli Shekel but it’s not uncommon for an Israeli individual who does a lot of international business or international investing to have a bank account denominated in USD, and to a lesser extent EUR. Similarly, most international businesses in Israel have bank accounts in multiple currencies with their Israeli bank.++
How to Format International Transfers to Israel
Israel has adopted the IBAN format for receiving international wire transfers. It’s a global international numbering standard which is also adopted in places like the UK and the EU. This common standard helps to reduce payment errors and improve the time in which transfers complete. IBAN is an alphanumeric code which can differ in length depending on the country you’re sending money to.
The Israeli IBAN format consists of 23 alphanumeric characters. When transferring money to Israel, the country code ‘IL’ will always apply and the rest will vary depending on the bank and account number you’re sending money to.
Israel IBAN Format: ILkk BBBN NNCC CCCC CCCC CCC
» IL = Country Code
» kk = Check Digits
» B = Bank Code
» N = Branch Code
» C = Account No.
On top of this, you’ll also have to provide:
- Beneficiary Bank BIC/SWIFT: 8 or 11 characters
- Purpose of Payment
Which are the most popular destinations for money transfers to and from Israel?
The following are the most popular currency routes based on the many thousands of readers who have visited this page.
- Transfer from UK to Israel (GBP to ILS)
- Transfer money from USA to Israel (USD to ILS)
- Transfer from Israel to France (ILS to EUR)
- Transfer from Israel to Portugal (ILS to EUR)
- Transfer from Israel to Romania (ILS to RON)
- Transfer from Israel to USA (ILS to USD)
- Transfer from Israel to UK (ILS to GBP)
- Transfer from Canada to Israel (CAD to ILS)
- Transfer from Australia to Israel (AUD to ILS)
What is the best way to transfer money from Israel?
The following are the best 4 ways (services) to transfer money to and from Israel. They all support international money transfers to Israel, but only Covercy can on-board Israeli clients.
Currencies Direct: Best for International Money Transfers to Israel
- 96% Positive Feedback from Customers, Since 1996
- Service Oriented - Specialising in Large Transfers - Friendly Dealers
- Very Competitive Rates, No Wire Fees
🇮🇱 Covercy: Best for Money Transfers from Israel
- Israeli Company with Israeli Staff and Israeli Bank Accounts
- Professional and Friendly
- Better-Than-Banks Rates with 30 Shekel Fixed Fee
moneycorp: Oldest and Most Reputable Foreign Exchange Service
- Providing FX Services since 1979
- Very Recognisable Brand with Excellent Reputation - £36.9in Transfers Annually with Offices in Every Continent
- Business Specialists
Key Currency: Up and Coming Currency Broker with Local Presence UK/Spain
- Fastest Growing UK Currency Transfer Provider
- Strong Onboard Team, Get an Immediate Callback
- Recipient of Multiple Industry Awards
Why seek a bank alternative when transferring money from Israel?
When transferring money from Israel internationally, banks can be quite cheap or alas, very expensive. It all depends on the terms that you have negotiated with you bank.
To break it down, Israeli banks like Leumi, Ha’Poalim and Mizrahi would charge normally a fixed fee per transfer each transfer abroad from Israel. That fee ranges in the 200 shekels per transfer by default (which amounts to $50-60, €50-60 or £50, depending on the current exchange rate at the time). That is a higher bank transfer fee than charged by any British, European, American or Australian bank that we have tested (including the notoriously expensive-for-international-payments NatWest in UK and CommonWealth in Australia).
Then, Israeli banks still tend to charge you with a “commission” of the total amount transferred. That commission appears low at the 0.2% range normally but it’s just another layer of payment fees that doesn’t exist in most other places in the world.
Additionally, Israeli banks charge a hidden markup that is literally impossible to determine before you have an account with the bank and looking to transfer money from Israel (and even then you really have to know what you’re doing to understand all the costs). That markup by default can be as high as 2% on its own.
In other words Israeli banks can be very expensive for sending money from Israel to UK or anywhere else in the world.
With that being said, Israeli banks are known to negotiate the terms of the their customers and international transfer fees from Israel, as well as other banking fees, boil down to the power of that negotiation. Larger customers with more assets and banking relationship are likely to get a reduction of up to 80% of the cost of transferring money from Israel (and similarly for incoming payments into Israel). In fact, business clients and HNW can get as low as 0.1% or 0.2% margins which beat any money transfer provider in the world.
Why seek for a bank alternative when transferring money to Israel?
The Israeli Shekels is considered an exotic currency, and by that definition banks which are already quite expensive when it comes to international money transfers costs become even more expensive.
To elaborate on the above, if you were to transfer money to Spain from UK or transfer money to France from UK, for example, the bank would hit you with two charges. One being the cost of wire transfer (SWIFT cost) when the second one would be the exchange rate markup i.e. how much worse the exchange rate you will get from GBP to EUR than the actual bank rate provided by Bank of England. As a very rough average a UK bank would charge you £15-20 for the transfer and then about 2.2% in markups, a hefty and unreasonable fees.
Unfortunately, when you are transferring money to Israel from UK, sending money to Israel from USA, or from anywhere else in the world, these two fees tend to grow because the Israeli currency is exotic. Many banks worldwide would charge a higher fee when transferring money to an Israeli bank account from abroad, and similarly and even more importantly they would charge a higher markup on the exchange rate. For American banks for example it would be common to see a margin of 5% when transferring money from USA to UK (USDILS exchange).
What are the most popular reasons to send money to Israel?
Some of the most common reasons to send money to Israel from abroad are
- Relocation. There are tens of thousands of Jewish people who are making “Aliyah” each and every year (37,000 immigrants in 2021).
- Overseas property investments. Tel Aviv, in particular, is often put in the same group as the most sought-after cities in the world like Tokyo, London, or New York City.
- Foreign investment in startup companies. Tel Aviv has for some time been nicknamed the ‘Silicon Valley of the Middle East’ (AKA Silicon Wadi) as more and more start-ups are emerging from this city. It has more start-ups per capita than anywhere else, and it has 61 more mature companies listed on NASDAQ. There is a constant flow of interest and money from overseas investors in tapping into this lucrative market.
- Tourism. Israel is a hub for many religious tourists, many comes as organized groups.
What are the most popular reasons to send money from Israel?
Relative to the size of the country and its economy, there is a large number of outbound money transfer transactions from Israel to other locations across the globe. It’s quite common to see Israelis transferring money to USA, UK, France, Spain, or even remote Australia. Below you can find the popular use-cases in which money is being sent from an Israeli bank account abroad:
- Business payments: as Israel is quite a small country it is heavily reliant on international service providers. Making a payment to a company abroad that includes currency exchange of ILS (USDILS, GBPILS, EURILS are the most common pairings) is a very common use-case.
- Personal payments: Israel imports more than $46bn worth of goods. Again it’s the economy of size that forces it to import heavily. As Israeli large importers are known to take excessive margins, many Israelis resort to buying directly from abroad. It’s a big enough business for commerce giant Amazon to expand into there in 2019. While most overseas payments from Israel would be conducted through a credit card or through an e-wallet like PayPal, large payments may be made with a bank wire from an Israeli bank account.
- Remittances: there are well over a million expats globally. It is estimated that there are over a million just in the USA! That is a vast amount of expat for a country with a population of less than 9m people in total. These expats need to transfer their money from USA to Israel often.
- Relatives abroad: Jewish families are known for that close ties even if parts of the family reside across the ocean. Transferring money from Israel to France, USA, and UK is quite often for that purpose.
- Political instability: while the Israeli shekel has been the one of the world’s strongest currencies and the economy as a whole boomed and particularly in the high-tech sector, new “judicial reforms” by an extremist government threaten to decimate the banking sector and with it the economy (as per high tech industry leaders), causing an increased outflow of funds from Israel abroad, and particularly from Israel to USA as some American brokers are happy to onboard Israeli customers. The proposed reform will enable the government to have full control of the high court of justice, raising fears among international companies and international investors that it will turn Israel totalitarian. Among the proposed laws by the government are a private army reporting directly to a minister titled “Minister of Chaos” by the New Yorker. Transferring money out of Israel for cheap in a timely manner may increase in popularity as long as this issue is not resolved.