If you’re transferring money between the U.S. and Israel the same way you always have, you’re probably handing banks a chunk of your wealth without even realizing it. Every time you exchange dollars for shekels, hidden fees and poor exchange rates quietly drain your hard-earned money.
Most people assume that a money transfer is simple: move dollars, receive shekels, done. Not exactly. Banks have built-in profit mechanisms designed to earn profits without you noticing. They inflate exchange rates, tack on fees, and delay transactions—which allows them to take a bigger cut of your money.
But here’s the good news: you don’t have to accept this. By understanding how the system works and making smarter moves, you can keep more of what’s yours.
In this guide—based on insights from Douglas Goldstein, CFP® and Ari Dobner in their latest virtual event—you’ll learn exactly where you’re losing money, how financial institutions profit from currency transfers, and, most importantly, how you can flip the script and get a better deal.
How Banks Make Money Off Your Transfers
When you transfer money internationally, you probably assume the only cost is a small transaction fee. After all, banks frequently advertise their “no-fee” transfers—which sound like an incredible deal.
But here’s the thing: You’re paying. You just don’t see it.
Banks don’t make their real money on transaction fees. Their biggest profit comes from something far more subtle—giving you a bad exchange rate.
The Exchange Rate System That Costs You Thousands
Let’s break it down. Suppose the real mid-market exchange rate (the rate banks use before they add their profit) is 3.75 shekels per dollar.
Now, when you go to transfer your money, your bank offers you 3.68 shekels per dollar instead.
That tiny difference might not seem like a big deal at first. But on a $100,000 transfer, that “small” difference means you just paid 7,000 shekels—instantly. And because most people don’t compare exchange rates, banks can do this all the time.
A Look at Fees
On top of that, sometimes banks will add extra fees.
They may charge:
- “Swift” transfer fees,
- Intermediary bank fees,
- Processing fees.
By the time your money lands in your Israeli account, a significant percentage of it has already been siphoned away.
So, What Can You Do?
Unfortunately, the system keeps you in the dark. But now that you know how the game is played, you can start playing smarter.
The Smarter Way to Transfer Money and Keep More of It
Transferring money between the U.S. and Israel should not be an afterthought. The difference between a well-planned transfer and an impulsive one could mean thousands of dollars saved or lost over time. Banks are counting on you to overlook the small details—their profits depend on it. But by taking a more strategic approach, you can cut unnecessary fees, get a better exchange rate, and time your transfers for maximum savings. Here’s how to take back control of your currency exchanges.
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Know the Mid-Market Rate at the Time You Agree to a Rate
If you don’t know the mid-market rate, you have no way of knowing whether your bank is giving you a fair deal. The mid-market rate is the real exchange rate—the one that banks and financial institutions use to trade currencies with each other before adding their markup when trading with you.
Websites like XE.com, Google Finance, and Globes display the mid-market rate in real time. This is the rate you should compare before agreeing to any quoted exchange rate. The difference between the mid-market rate and your quoted rate is the hidden “spread”—in other words, the bank’s profit margin. And that margin can be steep, often around 0.9% at Israeli banks.
But here’s the real game-changer: You don’t have to accept a rate with a hidden spread at all. Instead of relying on whatever rate your bank decides to give you, you can peg your conversion to an independent, official rate—like the Bank of Israel’s daily “Shar Yatzig” rate.
Why does this matter?
- No hidden fees or markups. Banks make their money by widening the spread, but an official rate means full transparency.
- You can verify your rate anytime—even years later. Because the official rate is public, you’ll always know exactly what you got.
- It keeps everyone honest. If your exchange rate is pegged to an independent source, there’s no room for “adjustments” that quietly skim money off the top.
Before agreeing to an exchange rate, always check the real-time mid-market rate. If the spread is large, ask about pegging to an official rate. If they can’t (or won’t) offer that option, you might be better off looking elsewhere.
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Use a Currency Exchange Provider Instead of a Bank
Your bank might be your go-to for handling day-to-day transactions, but when it comes to currency exchange, they are probably not your best option.
Unlike banks, some specialized exchange providers focus on transparency and fair pricing. Clearshift, for example, operates with a different philosophy—they believe currency exchange should be straightforward and transparent. Instead of adding hidden spreads or making it difficult to compare rates, they provide full transparency on pricing so customers know exactly what they’re getting. Their model is to provide clients with an exchange rate at the daily Shar Yatzig rate, the official rate that is free of manipulation and spreads.
By choosing a provider that values transparency, you ensure you’re getting the best possible deal without any surprises.
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When (and How) You Transfer Money Can Save You Thousands
The foreign exchange market runs around the clock, but that doesn’t mean every time is a good time to hit “send” on a currency transfer. Exchange rates fluctuate constantly, and banks adjust their pricing based on risk, timing, and how sleepy the market is.
One of the biggest mistakes people make? Converting on Friday afternoons or Sundays.
Why? Because the shekel forex market slows down heading into the weekend. Banks widen their spreads to protect themselves from volatility, and guess who pays for that extra cushion? You do.
Instead, plan your conversions when the market is active—typically Monday through Thursday—when there’s more liquidity and competition, meaning tighter spreads and better rates for you.
Now, if you really want to take the stress out of timing altogether, there’s a smart workaround: peg your conversion to an official, independent rate like the Bank of Israel’s Shar Yatzig. That way, you don’t have to worry about market noise, timing, or mysterious spreads—you know exactly what rate you’re getting, and you can verify it at any time.
But timing isn’t the only factor—how you structure your transfers matters, too.
If you’re planning to move a large amount, don’t fall into the “all-in-one-shot” trap. Trying to hit the perfect moment with one big transfer can backfire. Exchange rates can shift quickly, and locking in a bad one on a large sum can lead to some serious regret.
Instead, spread your transfers out over time—a technique known as dollar-cost averaging. For example, if you’re transferring $100,000, you might schedule four transfers of $25,000 spaced out over a few weeks. If rates improve, you benefit on some. If they dip, at least you didn’t convert it all at the worst rate.
This strategy is especially helpful in volatile markets—it smooths out the highs and lows and reduces risk overall.
Pro tip: If the rate is good now and you know you’ll need shekels in the near future, consider converting a bit extra and holding it in a multi-currency account. That way, you’re not forced to convert at a bad rate later when the need arises.
Bottom line? A little planning goes a long way. By timing smartly and structuring your transfers with intention, you can cut costs, reduce stress, and keep more of your money where it belongs.
Common Questions and Smart Strategies for Cross-Border Money Management
Managing money between the U.S. and Israel isn’t just about moving dollars from Point A to Point B. There are tax traps, investment decisions, and big financial consequences that can cost you if you’re not careful.
Below are some of the most common questions Americans living in Israel ask—and the smartest strategies to keep your wealth working for you, not against you.
Should I Move My U.S. Investments to Israel or Keep Them in the U.S.?
Many Americans in Israel choose to keep their investments in the U.S. Why? Because the U.S. offers:
- Better diversification (access to a wider range of stocks, bonds, and funds)
- More favorable tax treatment (owning Israeli mutual funds and ETFs can be problematic for Americans from a tax standpoint)
- Stronger protections and liquidity (U.S. financial markets are deeper and more established)
However, if you need frequent access to shekels, it might make sense to hold a portion of your assets in Israel to avoid constantly transferring money.
The Smart Move: Instead of going all-in on one side, consider a blended approach—keeping most of your investments in the U.S. while maintaining enough liquid shekels in Israel to cover your expenses.
Should I Transfer Money in Dollars and Convert to Shekels Later?
In many cases—yes. But it’s not just about waiting for the perfect rate.
If you send dollars directly into your Israeli bank account, you’re putting yourself in a corner. Once the dollars hit their system, you’re stuck with their rate. Moving the money back out to a different provider is often expensive and inconvenient, so at that point, you’re probably not in a great position.
Instead, consider keeping your dollars on hold in your insured U.S. bank or brokerage account until you’re actually ready to convert.
This isn’t about trying to time the market down to the shekel. It’s about giving yourself flexibility and control, rather than being forced into a bad rate just because your money ended up in the wrong place.
Take Control of Your Money and Stop Overpaying on Transfers
If you’re still converting money through a bank without checking exchange rates, timing your transactions, or using a specialized provider, you’re likely losing money on every transfer. By being proactive with your currency exchanges, you can avoid the hidden costs that banks build into their pricing.
Taking control of your money starts with understanding how exchange rates work, choosing the right provider, and making smarter decisions about when and how you transfer funds. The system is designed to benefit financial institutions, but by applying the strategies outlined in this guide, you can shift the advantage back in your favor.
If you’re looking for an alternative way to move money across the ocean, learn more at clearshiftinc.com or call them directly at 03-915-5726.
If you’re managing U.S. investments while living in Israel and want expert guidance on optimizing your financial strategy, now is the time to take action. Schedule a free Cross-Border Financial Evaluation today to ensure that your money is working for you—not the banks.
Disclaimer: This guide is for educational purposes only and does not constitute financial, tax, or legal advice. The information presented is general in nature and may not apply to your specific circumstances. Mention of specific companies or service providers, including Clearshift, is for illustrative purposes only and does not constitute an endorsement or recommendation. All financial transactions, including currency exchanges, involve risk. Readers should conduct their own due diligence and consult with qualified professionals before making any financial decisions. Neither the author, Profile Investment Services, Ltd., nor their affiliates assume any responsibility for loss or damage resulting from reliance on the information provided herein.