Tuesday, 16 October 2018

Best ways to transfer and move money to Israel for Aliyah & relocation

Hebrew: העברת כספים מחו"ל לישראל

By: Daniel Engelsman - www.isratransfer.com

big money bagsWhether on vacation, sending to family or friends, purchasing a home, prior to, or post Aliyah, safely wiring and transferring you funds to Israel can be worrying.  There are no currency transfer restrictions from the USA for example, but if you are subject to currency restrictions and emigration allowances, like in South Africa you want to make sure you get the very best exchange rates and pay the lowest fees.  No matter what, we want to transfer with minimal risk and make sure the transfer is not delayed in any way.  Every cent, penny and agora counts and fluctuations in exchange rates can make a significant difference to your lifestyle.

Tip 1 - Prior Arrangements

Speak to your bank or currency transfer specialist at least 6 months BEFORE making Aliyah or relocating. Whether intend to moving money now, or in 2 years time it is very important to make as many arrangements as possible before you leave the country. You need establish how to send money to Israel without being able to go to your existing bank branch when you need money. On occasion people have made Aliyah or relocated to Israel without making prior arrangements and on occasions clients have had to fly back to their home country to release their own money! Don’t let this happen to you.

Tip 2 - Charges

Make sure you know exactly what you are going to be charged for and how much. Compare the rates of a bank with those of a currency transfer specialist.  Whether they are bank charges or a currency transfer specialists' charges,  you need to factor them into your costings.

  • Transfer costs – your foreign bank will charge you to send the money to Israel. This ranges from around $25 - $50 (rates may change).
  • Receiving charge in Israel – if you send money (in dollars/euros/sterling/rand or shekels) directly to your own account in Israel the bank will charge you to receive the money. This fee is normally a minimum of $20, and can go up to $100’s if transferring a large amount.
  • Conversion fee – many Israeli banks will charge you a percentage of the amount you have sent to convert funds to shekels.
  • Interbank rates also form part of the fees. The interbank rate is the rate the banks pay when they are trading with each other.

Tip 3 - Currency Fluctuations

Fluctuations in the exchange rate can SERIOUSLY effect your budget – when making Aliyah or relocating to Israel, your expenses are (almost always) exclusively in Shekels. If your savings and or income are in a foreign currency then currency fluctuations can seriously effect your budgeting. Make sure you work out any conversions on what you consider the worse case scenario exchange rate. For example, if you have worked out that your monthly expenses in Israel will be 12,000 Shekels, there is no point budgeting at an exchange rate of 4 for the US Dollar. Yes, the rate was there, but over the last 2 years it has also been as low as 3.3. So instead of needing $3,000 you would need $3,636 if the rate was to fall that low again.

For example the USD/ILS traded at 3.90 ILS on Monday November 23, 2015 according to interbank foreign exchange market quotes.The Israeli Shekel has averaged 3.53 from 1981 until 2015, reaching an all time high of 5.01 in June of 2002 and a record low of 0.01 in May of 1981. (Source: Tradingeconomics.com)

 

shekeldollargraph

A one year comparison: 20155 - 2016 Dollar Shekel Trading Graph   Photo credit:  Bank of Israel

Things that could affect the exchange rate

There are a number of factors, beyond our control, that affect the exchange which include;

  • Current interest rates
  • Inflation and economic stability
  • Deficits in foreign trade
  • Public debt
  • Political stability and influences - Britain's decision to exit from the EU is the most recent example and it saw a significant depreciation in the value of the Pound Sterling.

Tip 4 - Think ahead

If you are planning on moving a large amount of money, be it for a property purchase a car or living expenses make sure you think ahead of time. Exchange rates can change very quickly, so the more time you give yourself to convert your funds the more chance you have of getting a better exchange rate.  You can either watch the rates yourself or ask a currency specialist,  to watch the rates for you and advise you if the exchange rate reaches a certain level.

Tip 5 -Checks?

Avoid checks – whilst it may be easy to just write a check to get shekels, it is often a costly way of doing things. To bank a check in Israel there are two main ways. Either you go to a foreign exchange or currency exchange facility, who will give you the shekels almost immediately but will charge you approximately 1% for the privilege. Alternatively you can go to your bank who wont charge as much, but may not transfer the shekels into your account for up to 4 weeks. If the amount you need is less than a few thousand dollars this might be your best option, but anything over this consider using a currency broker and wire your money.

 

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