Money and Banking for a Year in Israel: How Students Pay for Things

The currency

Israel's currency is the new shekel (שֶׁקֶל). You'll see it written three ways: the symbol ₪, the letters NIS (for New Israeli Shekel) and the international code ILS. One shekel is 100 agorot. Bills come in 20, 50, 100 and 200 shekels, and coins go up to 10 shekels.

Exchange rates move, so look up the current rate rather than relying on a number someone gave you last year.

Using a card from home

Visa and Mastercard are widely accepted in Israel, so a debit or credit card from home is the main tool for most students. What it costs depends on your bank, and two kinds of fees are worth asking about.

• Foreign transaction fee. This is a charge some banks add to every purchase made in another currency, usually a percentage of the purchase. Some cards charge nothing. Yours might.
• ATM fees. Taking shekels out of an Israeli cash machine with a home card can trigger a fee from your bank, a fee from the machine's owner, or both, plus the bank's currency conversion.

Call the bank or read the card's fee schedule and write down the real numbers for your card. If the fees are high, it can be worth opening a different account before the year starts.

• Ask for a 4-digit PIN. Longer PINs aren't always accepted at Israeli ATMs.
• Check that the debit card carries a Visa or Mastercard logo and is on a major ATM network.
• Tell the bank the student will be in Israel for the year, if your bank still asks for travel notices, so the card isn't blocked as suspicious.
• When a card machine or ATM offers to charge in your home currency instead of shekels, choose shekels. The home-currency option lets the machine's operator set the exchange rate, which usually costs more.
• Send a second card from a different account, kept in a different place from the first.

Cash

Students need some cash for small purchases and for the rare place that doesn't take cards. Arriving with a small amount of shekels covers the first day or two. After that, a few larger ATM withdrawals usually cost less in fees than many small ones, if each withdrawal has a flat fee. Check how your bank charges.

A student shouldn't keep a large amount of cash in a dorm room. Ask the program whether it has a safe or holds money for students.

Does an overseas student need an Israeli bank account?

For a one-year program, generally not. A home card and cash cover nearly everything, and tuition is normally paid by the family from home. See paying for the year.

Opening an account is possible in some cases, but it isn't simple. Some Israeli banks don't open accounts for visiting students at all. Those that do typically ask for a passport with a valid visa and a letter from the school, most charge a monthly fee, and the account should be closed before the student leaves. Rules differ from bank to bank and change, so if you think you need an account, ask the program which banks its students have used and confirm the requirements with the branch.

US citizens with a foreign bank account may have US reporting duties. Ask a tax professional before opening one.

An account starts to make sense if the student will be paid in Israel, or stays longer. That's covered in a second year and staying in Israel.

Payment apps: Bit and PayBox

Israelis commonly send each other money with phone apps, mainly Bit and PayBox, which are run by Israeli banks. Students will hear "just Bit me" when splitting a taxi or paying someone back.

Signing up generally requires an Israeli phone number, an Israeli ID number, and an Israeli bank account or Israeli-issued card. That means most overseas students on a one-year program can't use them. Don't plan the year around these apps. If someone asks for a Bit payment, offer cash instead, or settle up through a friend who has the app.

Parents who want to send money mid-year usually do it by moving money into the student's home account, which the student then reaches with the card. Ask your bank about fees and how long transfers take.

Agree on a monthly budget

What a student spends depends on what the program already covers. Before setting a number, find out:

• How many meals a week the program provides, and what happens on Shabbat (שַׁבָּת) and during breaks.
• Whether laundry, trips and local transportation are included in tuition.
• What past students typically spent a month. The program or parents of alumni can tell you.

1. 1List the regular costs: food beyond what's provided, bus and train fares, phone plan, toiletries, laundry.
2. 2Add an amount for travel and gifts for Shabbat hosts.
3. 3Set aside a separate reserve for vacations and unplanned costs like a doctor's visit or a replacement phone.
4. 4Agree on the monthly amount together, and on what happens if it runs out early.
5. 5Look at the spending together after the first month and adjust.

A separate account with a fixed monthly transfer makes the budget visible to both of you and limits the damage if the card is stolen.

Have a lost-card plan before it's needed

1. 1Before the flight, save the bank's international phone number, the one that works from outside your country, somewhere other than the wallet.
2. 2Turn on the bank app's lock or freeze feature and make sure the student knows where it is.
3. 3If a card is lost, freeze it right away in the app, then call the bank to cancel and replace it.
4. 4Switch to the backup card. This is why it lives in a different place.
5. 5Ask the bank how it gets a replacement card to Israel and how long that takes. Often the card goes to the home address and a parent has to send it on.
6. 6Tell the program. Staff have seen this before and can help with a short-term fix.

Common questions

Should my child use a credit card or a debit card?

Many families send both: a debit card for ATM cash and a credit card for purchases. Compare the foreign transaction and ATM fees on each with your own bank, because they vary a lot between cards.

Can my child use Bit or PayBox with a foreign card?

Generally no. These apps are built for people with an Israeli ID number and an Israeli bank account or card. Check each app's current terms if this matters to you, since requirements can change.

How much spending money does a student need each month?

It varies too much by program to give one number. It depends on how many meals are provided, how often the student travels and what the program includes. Ask the program and parents of recent students, then set a budget and review it after the first month.

Is it better to exchange money before leaving or in Israel?

Bringing a small amount of shekels for the first days is convenient. For the rest of the year, ATM withdrawals and card payments are what most students use. Compare your bank's fees with the exchange rate you're offered at home.