Power checking accounts had another interesting feature in former
Yugoslavia: country had a huge inflation rate in 1989 (250-400% a
month!), so the interest rates were accordingly high. Let's say you
deposit 1 million dinars today and in a month you'd have 2.5
million dinars. BUT the 1 million dinars at the beginning of the
month was worth like a $ 1000 and 2.5 million dinars at the end of
the month was only $ 800. Logically if you earned any high sum of
dinars you were basically rushing to buy stable foreign currency
A.S.A.P. While you were looking for a willing seller who would not
charge you outrageous premium, you kept your money on power
checking accounts, because that way you were loosing less money
each day. You paid everything by checks. Checks wonderfully took
forever to clear. The 33 days might be surprising for the U.S., but
that was a standard in Yugoslavia. More marvelously: your checking
account was debited the day your bank got the check, NOT the day
you wrote the check. Which meant that you could go shopping today
and spend 2 million dinars in checks, and they'd clear in 15-45 (90
if you're really lucky, or if you bribed the store manager with
some Deutschmarks) days leaving all that time your already spent
money to earn interest. More advanced use of the system: you could
deposit 2 million dinars on your account, take checks and travel to
another city (in another republic preferably), find a branch of a
bank headquartered in a third republic and cash your checks there
(I usually cashed checks in a Bosnian bank in Slovenia, while
keeping my account in Croatia), take the cash and deposit it to
your account in your bank in your city. The record of your deposit
would precede the record of your withdrawal for about 15-30 days:
time needed for checks to travel from Slovenia to Bosnia and then
to Croatia. In a month of doing so you could amass enormous amounts
of 'virtual money' that would earn real interest on your account.
I had a friend who bought a car on interest earned on money she did
not have. I was more modest by just buying a TV set. The downside
of the power checking accounts were that you were charged a huge
negative interest if you happened to fall bellow zero on your
account (but that rarely happened to anyone careful).
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