An alternative way to invest in the dinar is to open an overseas bank account. There are many banks in Iraq and outside of Iraq that will allow you to open up a money market or savings account that you can convert into dinar at the exchange rate making this the CHEAPEST way to buy dinars! Most people don't know how to accomplish this so here is a chance for you to find out exactly how.
If you have done some research on the dinar already, you probably know that except for some forum discussions this information has never been provided for FREE before. Dealers and other dinar related companies often charge you a fee in order to provide you with details on how to open up iraqi dinar bank accounts. Therefore I hope that by reading this you'll discover useful information which will help you through your decision process and save you time once you decide to make your investment.
As I mentioned earlier, buying dinars through ebay and/or through dinar dealers means paying at least 20-30% premiums to make your investment. However, paying these extra charges also means that you are able to have the actual currency in your hands, giving you the freedom to do as you like with it. On the other hand, if you wish to avoid those extra charges, and want to feel certain that no countrfeit dinars fall into your hands, opening a bank account in dinars is an excellent alternative.
how can you open a bank account in new iraqi dinars?
Typically, you contact the bank where you'll be asked to open up 2 accounts; one for dollar deposits and another for dinar deposits. What this means is that once you wire your dollars into your dollar account, you can then convert as much as you wish into dinars and vice versa. The charges associated with this are very small, just like the ones you would normally pay when you open any other bank accounts.
The documentation you require to open up the bank account is simply:
- a scanned copy of your photo, passport and/or driver's license which identify your address
- a letter of authorisation (LOA) you email to the bank with your scanned signature, which will authorise the bank to tranfer currency from one account to the other.
If you are worried about identity theft, you can ask the bank to let you fax copies of this information.
The bank normally assigns a manager who will be dealing with you personally for any questions/queries you might have regarding your transactions, balance, e.t.c. Lately some of the banks that deal with dinar accounts have created on-line services which will allow you to log-on to your account, check your balance, make on-line transactions, see latest updates/offers on services, and so on. Comparing to a year ago this process is becoming easier and easier, just like with any regular bank account. It's SIMPLE!
How do you pick the right bank?
This brings me to discuss possible risks associated with opening an account in dinars. These are not too different to the risks you take when you open any normal bank account. You just need to think a little harder when you do this overseas. Especially with banks in the Middle East and Iraq.
The safest way to look for the right bank would be to select one that has been authorised to conduct financial business in Iraq by the Coalition Provisional Authority (CPA). Other banks might be involved in money laundering and all assets could be frozen and sized by the US government.
Here you can see a list of banks that have been approved to conduct business in Iraq by the CPA in alphabetical order:
Al-Warkaa Investment Bank (very popular amongst foreign investors who wish to buy dinars and highly recommended)
Bank of Baghdad
Commercial Bank of of Iraq
Credit Bank of Iraq
Dar Es Salaam Investment Bank
Gulf Commercial Bank
Investment Bank of Iraq
Iraqi Middle East Investment Bank
National Bank of Iraq
A complete list is provided by the Central Bank of Iraq. Please see the link below.
List of Banks by Central Bank of Iraq
International Banks that sell Iraqi Dinars
There are a few international banks that are licenced to operate in Iraq and/or sell dinars outside of Iraq. Even though the Central Bank of Iraq currently restricts the trading of dinars outside Iraq, for a number of reasons it has allowed the banks mentioned below to sell dinars in a number of countries. These are major banks and many investors have purchased dinars from them even though this is not something they advertise openly on-line. To find out how to buy dinars from them you need to contact each one of them as their policies and charges differ from one another.
Below is a list I managed to put together for you and right now it is possibly the only one readily available on-line for free:
HSBC Bank (UK)
National Bank of Kuwait (Kuwait)
Barclay's Halifax (UK)
Bahraini Arab Banking Institute
Iranian National Bank (Iran)
Chase Bank (US)
Wells Fargo (US)
Bank of Nova Scotia (Canada)
Lasalle Bank (US)
Associated Bank (US)
Bank of America (US) - does not directly sells to customers. It sells dinars to other US Banks (for example Chase Bank). It also sells wholesale to some banks outside the US.
Most of the above international banks sell dinars for a profit, meaning that they sell dinars for more than the exchange rate set by the Central Bank of Iraq. However the rate they charge is often lower than the rate charged by dealers from the internet or Ebay. Also, many of the above banks can buy dinars back from their customers (they simply ask for the receipt aquired at the time dinars were purchased) but they charge more than the rate they sell. This list is constantly being updated as more information about the international banks arrives.
Click below to find out how to open a dinar account with a bank in Iraq. Warka Bank is being used as an example due to its popularity with foreign investors.