If deposits are dodgy, is it a bad idea to convert €s to foreign currency bank draft?

J

jackmcguire

Guest
Hi.

If euro deposits in Irish banks are vulnerable it might be a good idea to put money into euros in a foreign bank.

Rabo seems to be only one allowing relatively cheap access, but you need to have an Irish bank account to do this.

Then again there is the idea that Ireland could withdraw from the euro and devalue money held in banks in Ireland - including Rabo.

Would it be a bad idea to get a sterling or US dollar bank draft made payable to yourself and keep this under the mattress? Are there any reasons why this would be a bad idea? Would the bank draft be independent of the bank that issued it? Or if the bank goes belly up, does the bank draft become worthless too?
 
We had these things in the bank back in the 1970's. You purchased a form of bank draft or money order that accrued interest. I think we called them "deposit receipts". They looked like a bank draft. When you returned them I remember having to manually calculate the interest using a big old book. No computers in those days. Effectively they were a deposit account without the passbook except if I remember correctly they were legally more secure than a deposit account.

If you walk in to let's say the Bank of Ireland and purchase a Sterling draft. The draft might be drawn on Lloyd's Bank in the U.K. I am not sure if the Bank of Ireland immediately remits funds to Lloyds Bank to cover the issue of the draft or if the Bank of Ireland holds on to the funds until the draft is negotiated and then remits the funds.

It is a very interesting question though. To purchase a selection of foreign currency drafts and hold on to them. They would not accrue interest but you could effectively be holding on to a selection of foreign currencies in cheque form.
 
bank draft

sounds like a good idea. Does anyone know how much a bank draft costs? is it a percentage of the amount it is made out for?
 
Is there not an "expiry" date on drafts whereby they have to be cashed or lodged within a certain timeframe?
 
They are cheap to buy, cost about two euro fifty for a draft, not sure how long they are valid for.
 
Gulliver said:
Most banks will be reluctant to issue drafts in this way - money-laundering issues!
Click to expand...
Not true if you are taking funds out of your own account in the bank. Certainly true if you are exchanging cash for a draft.
You should be able to take out funds in the form of a bank draft from an institution that does not deal in foreign bank drafts and lodge these into your own bank as "cleared" under money laundering regulations.
 
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