Until recently, standard checking accounts in Israeli banks didn’t receive interest payments, so the issue of the bank’s heter iska was relevant only to someone paying a mortgage or with an interest account with the bank. However, a recent law has changed the status quo, and now every standard bank account holder will be receiving interest. (The exceptions, as far as I know, are Bank HaDoar and Mercantile Bank.)

This means that we would all be guilty of lending with ribbis if not for the heter iska. Fortunately, as we’ve learned, as long as the bank is the borrower, all the qualifications for the heter iska are automatically met.

Many people ask if using the heter iska is ideal. The answer is that it’s similar to selling chametz to a non-Jew for Pesach. Both are fully binding business transactions that circumvent an issur. One cannot disqualify a proper heter iska whose significance both parties understand. However, just like there are those who try not to sell chametz, one who wishes to be stringent can try not to work with a heter iska if unnecessary. 

(While sometimes there are other methods that may solve the ribbis issue, they should always be used in conjunction with the heter iska, not instead. Many people whose reluctance to use the heter iska led them to try getting around the ribbis in other ways found themselves transgressing ribbis min haTorah. Therefore, it’s always worthwhile to also have a heter iska to cover all bases.) 

In our case, since the bank is the borrower, there is less reason to be machmir about the heter iska. The reason for this distinction is that when the bank borrows there is at maximum an issur deRabbanan involved, because the bank owners don’t carry a personal responsibility to repay the debt. Would the loan default, the lender will have a right to the bank’s assets, not personal assets. 

Therefore, everyone may lechatchila rely on the bank’s heter iska provided that they understand that the payments aren’t interest, but dividends, as we have discussed at length. As previously mentioned, one should ask for a signature affirming that their account is subject to the heter iska.

One who does wish to be stringent can request from their bank not to reward them with interest. Unfortunately, not every bank will honor this request.