Deposits and Guarantees in Israel

For a covered residential lease, the aggregate amount of securities involving a monetary expense to the tenant is capped at the lower of 3 months’ rent or the rent payable for one-third of the lease term. Cash deposits and bank guarantees are examples; the statutory category also includes guarantees from defined licensed providers. With constant monthly rent of NIS 8,671 on an in-scope 12-month lease, the ceiling is NIS 26,013. That rent is a fixed illustration here, not a current market quotation. A security cheque or personal guarantee that entails no monetary expense is not automatically subject to this amount cap, but the lawful-realisation rules still matter. The unused security and its proceeds must be returned by the later of 60 days after possession is returned and settlement of qualifying tenant debts, once the lease has ended. Read the scope conditions below before using any ceiling.

The instruments differ in liquidity, fees, who is liable and how a demand can be made. A cash deposit transfers money; a fully deposit-backed bank guarantee ties up collateral and adds a fee; a cheque, promissory note or personal guarantee may create a different contractual exposure. Agree the amount, purpose, expiry, draw conditions and release process in writing. A lower upfront payment does not necessarily mean lower liability.

When do these residential-rental protections apply?

The cap, permitted charges, realisation and return rules discussed here belong to the residential-rental chapter. Its exclusions are specific. A lease of three months or less is excluded only when there is no extension option; a term over ten years is excluded when the landlord has no right to end it earlier. A short term with an extension option therefore needs a different assessment from a short holiday letting.

• Excluded accommodation includes a hotel unit or other holiday accommodation; a residential facility within the statutory ma’on definition; assisted living; student, pupil or worker dormitories; and protected tenancies.
• The chapter also excludes rent above the applicable indexed high-rent threshold and any other class lawfully prescribed. NIS 20,000 is the 2017 statutory base, adjusted annually on 1 January by the specified CPI mechanism and rounded to NIS 10. Check the published notice for the applicable year before relying on a high-rent exemption; do not use the 2017 base as today’s ceiling.
• For a landlord and tenant who are defined close relatives, section 25טו(b) removes the section 25יד(2) restriction on varying listed terms to the tenant’s disadvantage. It does not automatically disapply the entire chapter or create a fee. The definition covers a spouse, sibling, parent, grandparent, descendant, a spouse’s descendant and their spouses.
• The 2017 amendment commenced 60 days after its 19 July 2017 publication and preserved the previous rules for contracts made before commencement. Have an older contract, extension or renewal classified rather than assuming the signing date is irrelevant.

These are the scope conditions in sections 25יד–25טו and the 2017 transition provision. Where the nonvariation protection applies, a contract may improve the listed protections for the tenant; it cannot simply remove them. Check the actual agreement before treating a higher demand as automatically lawful or assuming an excess payment will be recovered without a dispute.

Four common security arrangements, at a glance

The following four arrangements are a useful comparison, not an exhaustive list of every product or combination. Ordinary rent payments are separate from security.

• Cash deposit (pikadon mezuman): money held as security. Agree who holds it, whether an escrow or joint account is appropriate, how it earns proceeds and how it is released. It counts toward the aggregate expense-bearing security cap in a covered lease.
• Bank guarantee (arvut bankait): a bank’s undertaking under its written demand terms. A fully deposit-backed version freezes the collateral and charges a fee; other facilities may use different backing and pricing. The bank’s payment undertaking is separate from the landlord’s duties to use security only on lawful grounds and give reasonable prior notice and a chance to cure. Read both documents.
• Rent and security cheques: monthly rent cheques pay rent; they are not an extra deposit. A separate security cheque supports specified obligations. Where it involves no monetary expense, the amount cap does not automatically apply. Agree its maximum amount, named payee and permitted uses instead of leaving an unrestricted blank instrument.
• Personal guarantors (arevim) and promissory notes: the number of guarantors, supporting documents and their liability depend on the agreement and applicable guarantee law. A signature that entails no monetary expense is not automatically within the amount cap. Define the maximum liability and release conditions; do not assume either zero exposure or automatic liability for the entire lease.

The amount test concerns securities involving monetary expense to the tenant, in aggregate. A demand outside that amount test is still subject to its own terms and applicable law. The 2026 amendment, section 24 expressly adds guarantees from defined licensed credit providers, deposit-and-credit providers, payment-service providers holding the specific stability-related licence referenced by section 36ט of the Banking (Licensing) Law, and insurers. It does not certify every private guarantee product. The chapter’s six-month commencement rule calculates to 30 September 2026 under the statutory date-counting rules; that is a legal calculation, not a separate licensing approval. Check the issuer’s exact licence class, product and contract date.

A banker’s cheque is a separate instrument. Discount Bank debits the cheque amount and an issue fee when it issues a banker’s cheque; the bank is the payer. This differs from an ordinary security cheque and from a bank guarantee. Its FAQ warns that technical defects or forgery can prevent payment. For cancellation after a transaction falls through, it requires the original cheque at the issuing branch; loss or theft can prevent cancellation. Discount Bank’s explanation, checked 2026-10-28. Confirm the issuer’s funding and original-return procedure before handing one to a landlord.

Each instrument has its own owner page with the full mechanics: read the deep guides to the rental bank guarantee, to post-dated and security checks, and to rental guarantors (arevim). Use the comparison below to choose between them.

Compare the four arrangements on one illustrative 12-month lease

Use constant rent of NIS 8,671 per month as a fixed worked input, with the residential-rental protections applying. The expense-bearing security ceiling is min(8,671 × 12 / 3, 8,671 × 3) = NIS 26,013. This comparison assumes the maximum is requested; the parties may agree less.

Use the comparison to separate cash access from legal exposure. An amount-capped cash deposit still carries custody and recovery risks. A bank guarantee adds demand mechanics and fees. A cheque or personal guarantee may cost less upfront while exposing a different person or amount. The appropriate choice depends on the complete documents and your available cash.

Three deposit numbers worked out for you

The next examples use fixed illustrative rents and constant monthly payments. They show the cap arithmetic and cash schedule, not current city averages or a required deposit amount. Apply the scope conditions and replace the inputs with your actual agreement.

1. Deposit-to-rent ratio for each instrument

For an in-scope lease, compare 3 months’ rent with the rent payable for one-third of the lease term. With constant rent over 12 months, those are three months and four months respectively, so the lower ceiling is three months. It is an aggregate ceiling on the expense-bearing securities, not a separate allowance for each instrument.

• Cash deposit alone at the illustrated maximum: 3.0 × one month’s rent.
• Fully deposit-backed bank guarantee alone at the maximum: 3.0 × one month’s rent as collateral, plus its quoted fee. Cash and guarantee amounts must be combined when both are required.
• Security cheque without monetary expense: not automatically covered by this amount cap. The separate monthly rent cheques remain payment, and neither fact permits an arbitrary security draw.
• Personal guarantee without monetary expense: no automatic three-month cap under this provision; the written obligation and other applicable law determine exposure. Twelve months of rent is not a universal statutory limit.

For a six-month in-scope lease at constant rent, one-third of the term’s rent equals two months’ rent, below the three-month alternative. For a nine-month or longer term with constant rent, the three-month alternative is the lower one. Varying rent, options and excluded leases need the actual contractual calculation.

2. Total upfront guarantee cost on the same rent

Worked input: R = NIS 8,671, 12 months at constant rent, covered lease, maximum expense-bearing security = 3 × 8,671 = NIS 26,013:

• Cash-deposit route: first month NIS 8,671 + cash security NIS 26,013 = NIS 34,684 required at move-in. The first month is spent on rent; unused security and its proceeds are returnable under the deadline.
• Fully deposit-backed bank-guarantee route: using a fixed NIS 260 fee input from Leumi’s tariff checked on 27 October 2026, first month NIS 8,671 + collateral NIS 26,013 + fee NIS 260 = NIS 34,944. This assumes one billed year or part-year and excludes additional charges and the cost of unavailable cash. A different bank, backing arrangement, term or renewal may change the quote.
• Cheque route: first month NIS 8,671 plus any cheque-service charge. Twelve monthly rent cheques total NIS 104,052 over the year; count the first month once. Any separate security cheque is a different obligation, not an additional year of rent due immediately.
• Guarantor route: assuming no issuance charge, first month’s rent is still NIS 8,671 and the upfront guarantee fee is NIS 0. The guarantor takes on the agreed obligation; this does not make the contract risk-free.

A second fixed illustration uses NIS 4,878 monthly rent: 3 × 4,878 = NIS 14,634 maximum expense-bearing security, and 12 × 4,878 = NIS 58,536 in scheduled rent. For dated market data use the average-rent guide. The Bank of Israel’s January 2026 report describes the fixed-shekel fee reform effective in February 2025 and the lower-priced category for deposit-backed residential guarantees up to NIS 50,000. Leumi’s tariff, updated 1 October 2026 and checked 27 October, supplies the named-bank fee used above; it permits additional expenses where applicable.

3. A six-month cash-security demand in the stated example

Take a covered 12-month lease at a constant NIS 6,000 per month. One-third of the term’s rent is (6,000 × 12) / 3 = NIS 24,000; three months is 6,000 × 3 = NIS 18,000. The lower figure, NIS 18,000, is the aggregate ceiling for securities involving monetary expense.

On those assumptions, six months’ rent as cash security would be 6 × 6,000 = NIS 36,000: NIS 18,000 above the ceiling and twice the permitted amount. Raise the excess before signing or paying. If it has already been supplied, obtain advice on the appropriate demand or remedy; the arithmetic does not guarantee immediate recovery or make a bank instrument disappear.

What a landlord may lawfully keep

For a lease within section 25י, the statute lists both the grounds for realising security and the amount allowed for each. It does not authorise a general confiscation for any breach or for the landlord’s dissatisfaction. The permitted grounds are:

• Unpaid rent, up to the amount you actually owe, plus index-linkage and interest if the contract sets them.
• Tenant-responsible defects not repaired: up to the repair cost for defects covered by section 25ח(a), including those caused by unreasonable use. Ordinary wear is not automatically tenant damage.
• Unpaid qualifying recurring charges: the unpaid amounts owed under section 25ט(a)(2)–(5), such as the relevant arnona and ordinary vaad bayit charges and utilities; first confirm the tenant actually owes the charge.
• Failure to vacate at the end of the term: an amount according to the contract, subject to the applicable law and facts. This is not automatically measured only by when a key changes hands.

Before realising security on any permitted ground, the landlord must give reasonable advance notice of the intention and a reasonable opportunity to remedy what needs remedying. Match each sum to the relevant statutory ground; request an itemised explanation and supporting records. The unused balance and its fruits, meaning proceeds such as interest or investment gains, must be returned. Agree a written deduction statement and a clear delivery timetable in the lease so both sides can reconcile the account.

Getting your deposit back the normal way

Once the lease has ended, section 25י(e) requires return of the unused security and its proceeds by the later of 60 days after the apartment is returned to the landlord’s possession and the date qualifying section 25י(c) debts are settled. It is not measured simply from the scheduled lease-expiry date, and later debt settlement does not start another 60-day period. A more favourable valid contractual return term may matter too.

Dated move-in and move-out photographs or video, a shared condition report, receipts and handover records help establish condition, payment and possession dates. They strengthen the evidence but do not guarantee an outcome. Follow the move-out and handover checklist to assemble a consistent record.

If the applicable deadline has passed or a deduction is disputed, keep the lease, payment evidence, notices and the landlord’s explanation. The Judiciary’s small-claims service lists a ceiling of ILS 39,900 from 1 January 2026 and a filing fee of 1%, with a minimum of ILS 50; recheck before filing. It supports self-representation by eligible individuals, and companies cannot file as claimants through that route. Forum, eligibility and representation rules still need checking. See what to do when a deposit is not returned and the Fair Rent Law protections for the next steps.

If you are a foreign renter with no Israeli bank yet

Check the issuing bank’s actual requirements and lead time before promising a guarantee or cheques. A fully deposit-backed bank guarantee depends on an accepted banking and collateral arrangement; a cheque payment method requires the relevant cheque facility. Confirm the bank’s actual timetable and plan any alternative before signing.

Possible arrangements to discuss with the landlord, bank and adviser include:

• A cash deposit within the applicable aggregate cap. If rent is prepaid, identify the months it pays and the refund terms separately; calling security “prepaid rent” does not resolve its legal classification.
• A guarantee from a provider meeting the relevant statutory licence definition, with the issuer, fees, collateral, draw terms and release conditions checked. A marketing label such as “rental insurance” is not proof of eligibility.
• Show proof of stable income or savings and negotiate directly.

The protection follows the lease’s scope and the kind of security, not the tenant’s nationality. Count all securities involving monetary expense together and read the separate cheque or personal-guarantee obligations. For the practical arrangements see guarantees for foreign renters, and for signing before arrival see renting remotely from abroad.

Hebrew security terms, one line each

• Pikadon mezuman: money held as security. Agree custody, proceeds, lawful deductions and release; an escrow arrangement is a contractual choice to examine.
• Arvut bankait: a bank guarantee governed by its demand and backing terms. A fully deposit-backed example freezes collateral. See the bank guarantee page.
• Shek bitachon: a cheque supplied as security, separate from monthly rent payments. Agree amount and use limits; see post-dated checks.
• Arevim: personal guarantors whose obligations depend on the actual guarantee and applicable law; see guarantors (arevim).
• Protokol mesira: a signed condition report recording the apartment’s state at handover.

Before you sign, check the deposit cap

• Does the lease meet the scope conditions, and is the combined amount of securities involving monetary expense within the lower-of cap? Do not give each instrument a separate three-month allowance.
• Is the cash deposit held in a joint or escrow account, not handed loose to the landlord?
• Does the lease spell out the four lawful deduction grounds and nothing wider?
• Does the return clause preserve the later-of rule: 60 days after possession returns or qualifying debt settlement if later, including unused security and proceeds?
• If there is a security check, is the maximum amount and the trigger written down, so it cannot be filled in freely?
• Did you photograph and sign a condition report at move-in?

Before providing security, verify the property rights and the collector’s authority using verify the landlord, and organise the agreement with rental documents you need and the lease contract checklist. A representative may need separate authority documents.

Deposit and guarantee questions renters ask

Can a landlord ask for six months’ rent as a deposit?

For an in-scope lease with the mandatory protection, expense-bearing securities together cannot exceed the lower of 3 months’ rent or the rent payable for one-third of the lease term. With constant rent for at least nine months, six months of cash security exceeds that ceiling. Check the scope and family-contract qualifications and seek a remedy for an existing excess demand; repayment is not automatic.

Does the security check count inside the three-month cap?

A security cheque involving no monetary expense is not automatically covered by the amount cap in section 25י(b). That does not authorise an unlimited or arbitrary draw. The cheque’s terms and the applicable realisation protections still matter, as do the separate terms of a personal guarantee.

Can the landlord keep my deposit for normal wear and tear?

Ordinary wear does not by itself establish tenant liability for a repair. For a covered lease, security can be realised only on the listed statutory grounds and within their amount limits, with reasonable prior notice and a chance to cure. Photos and a condition report help distinguish existing wear from a tenant-responsible defect.

When do I get the deposit back?

Once a covered lease has ended, by the later of 60 days after return of possession and settlement of the qualifying tenant debts, including unused security and its proceeds. There is no extra 60-day period after a later settlement. If disputed or late, document the facts and check the appropriate recovery route.

I do not have an Israeli bank or a guarantor. What can I offer?

Discuss an appropriately held cash deposit within the applicable aggregate cap, a qualifying licensed provider’s guarantee, or an arrangement supported by your income and savings evidence. Check the issuer and written terms. The amount cap applies to securities involving monetary expense in an in-scope lease; it does not automatically cap every instrument.

Which instrument is best for me?

Compare cash access, custody, fees, draw conditions, the person liable and release mechanics. A cash deposit in an agreed escrow arrangement and a fully deposit-backed guarantee have different risks. A cheque or personal guarantee may require less cash upfront but must have clear limits. Review the actual documents and choose an arrangement you can fund and understand.

Sources

• Kol Zchut, cash deposit as security and security-amount limitation pages (Rental and Loan Law sec. 25yod)
• Nefesh B’Nefesh, Renting in Israel guide (deposit cap, 60-day return, security instruments)
• Official 2017 residential-rental amendment, §§25ח–25טו and commencement/transition.
• 2026 Economic Plan Law, Gazette 3510, §24 (guarantee providers) and §37 (commencement).
• Bank of Israel January 2026 fee report, pp. 3–4 and 26–27.
• Leumi tariff, credit section 3(a), item 5.4; updated 1 October 2026, checked 27 October 2026.
• Judiciary small-claims filing service, updated 8 October 2026.
• Nefesh B’Nefesh, opening a bank account and ordering a checkbook in Israel
• Calcalist, Bank of Israel reform of bank-guarantee fees (deposit-backed fixed fee, up to NIS 50,000)
• gov.il small-claims service and Kol Zchut filing-a-small-claim guide (NIS 39,900 ceiling, 1 percent fee)
• Israel Central Bureau of Statistics rent data, via market reporting (rent anchors)

Choose the guarantee you can defend later

Choose an instrument whose cash requirements, fees, draw conditions and release terms you understand. Combine all expense-bearing securities for the applicable lower-of ceiling and check the scope qualifications. Keep the evidence needed to reconcile any lawful deductions. Continue with the how to rent in Israel guide or the renting in Israel hub for the surrounding steps.