Israelis let NIS 1.5 trillion slowly evaporate

It’s no secret that NIS 100 is value lower than it was value prior to now, since costs have gone up over time. So though you might even see precisely the identical quantity in your checking account, that sum of money buys much less. That’s what inflation is all about; eroding the worth of your cash, even should you don’t at all times take note of it.

While you have a look at some detailed numbers, it turns into exhausting to digest. Each NIS 100 you left in your present account 30 years in the past is now value simply NIS 49, based on an examination by Phoenix Monetary chief economist Matan Shitrit. As a result of your cash wasn’t “working for you”, it misplaced over half its worth.

Alternatively, based on Shirit, had been the identical sum invested in a share fund (40% Israel, 60% abroad), you’ll now see in your checking account virtually NIS 1,400, which, after permitting for inflation, can be value NIS 684. On a big quantity, say NIS 100,000, you possibly can acquire lots of of hundreds of shekels, or lose tens of hundreds in actual phrases.

The principle argument in opposition to investing in shares is at all times the identical; it’s dangerous. But it surely may very well be that the definition of threat itself wants revising. “When folks discuss threat in funding, they imply short-term volatility,” says Shitirit. “However once you have a look at a horizon of a long time, the danger to households is definitely lack of buying energy due to lack of publicity to belongings that generate an actual return. Over a interval of thirty years, funding in shares is much less dangerous than holding money, as a result of erosion of the money is definite, whereas over a time interval corresponding to this the anticipated annual return on shares is round 6-7%. So the actual threat is holding money.”

NIS 1.5 trillion doing nothing

However, too many Israelis worry dropping their cash and depart it of their financial institution present account. The figures communicate for themselves. In response to the Financial institution of Israel, final October Israelis held some NIS 420 billion in present accounts. Practically one in ten holds greater than NIS 100,000 in a present account. Along with deposits and money in hand, the entire is a few NIS 1.5 trillion. That is cash the worth of which is slowly being eroded, maybe with out the proprietor being conscious of it.

“There are individuals who depart cash of their present accounts considering that it’s protected and sorted. They fail to comprehend that the cash there accumulates no return and is eroded,” says Yogev Ben-Ziv, VP and head of finance at Migdal’s long-term financial savings division. “What’s sitting in a present account at the moment will probably be eroded in actual phrases in a 12 months’s time in accordance with the speed of inflation, and that’s a loss.” One other group that Ben-Ziv identifies is those that save by financial institution deposits. “They imagine that they’re investing the cash and accumulating a return, however the returns on these accounts are low and don’t protect the buying energy of the cash.”

18% inflation in 5 years

The previous few years have made the story extra tragic. From 2013 to 2020, cumulative inflation in Israel was below 2%, however from 2021 to 2025 it shot as much as a cumulative18%. Shitrit explains that inflation is constructed into the economic system, and so have to be taken under consideration. “Central banks, together with the Financial institution of Israel, have inflation targets (1-3% yearly for the Financial institution of Israel, N.A.), which implies that costs rise yearly and the worth of money is eroded.”

To be El Al’s companion

So what’s the answer? Gat Megiddo, companion and CEO at Finessa Capital, affords an intuitive approach of understanding the matter. “I at all times give the instance of El Al, which raised fares in the course of the Swords of Iron conflict. As a buyer of the airline you may be solely on the patron facet and solely see your energy to purchase tickets eroded, or you may put money into El Al shares and protect your buying energy or your capital, by being a companion within the enterprise. ‘Partnership’ with the enterprise sector reduces the danger to your buying energy and its volatility over time, and even higher than that.”

Ben-Ziv provides, “The advice is in fact to put money into belongings that may protect the actual worth of the cash, that’s, shares, bonds, actual property, and different various investments, not essentially 100% in shares.”

It ought to be harassed that not one of the specialists recommends transferring every thing to shares tomorrow morning. “Clearly there’s a spot for money for day-to-day wants and to offer a security cushion,” says Shitrit, “however for medium to long-term financial savings, the message is easy: holding giant sums in money over time is a alternative through which the danger of abrasion in actual phrases is a certainty.”

In response to an examination by “Globes”, since 2011 the share observe in superior coaching funds has offered an actual annual return (web of inflation) of 212% (virtually 300% in nominal phrases); the final observe has offered an actual return of 112% (nominal 160%); and the actual return on the credit score and bond observe with as much as 25% shares was 70% (nominal 109%).

In contrast, the shekel observe, like financial institution deposits, barely preserved the capital, and offered an actual return of only one.7% (nominal 25%).

That is with out taking account the truth that within the case of financial institution deposits 15% tax is payable on the curiosity “from the primary shekel”, whereas on financial savings in funding provident funds, for instance, the speed of tax is 25%, however solely on actual positive aspects.

“Let your cash be just right for you” is not only a advertising and marketing slogan however fundamental safety of your wealth. Opposite to what could be thought, leaving the cash “in a protected place” on the financial institution is just not a conservative resolution however, quite the opposite, a choice to lose cash.

Printed by Globes, Israel enterprise information – en.globes.co.il – on February 1, 2026.

© Copyright of Globes Writer Itonut (1983) Ltd., 2026.