Somebody told me about a strange sort of bank account that I have personally never come across in Europe.

The idea is to deposite a sum of money in a bank account that is sort of locked. It is your money, but you can't draw any.

This bank account is then used as security for a loan, your own, or somebody elses.

Is this true, is there such an account ? Does it have an English name ?

(No, I don't want one. It is more a question of recognizing one if it comes my way. I don't want to sign up for something like this by mistake.)

Common In Thailand is a secured credit card.

escrow

This bank account is then used as security for a loan, your own, or somebody elses.

Fixed Term Deposit Account.

Sometimes called a Term Bond by the bank.

OK, I get it. My question was about a special sort of fixed term / time deposit account that they use in Thailand.

Any saving or fixed term account can be used as security (collateral) for a loan. It's not about the account type as such, it's the order placed over the account that constrains withdrawals.

Some parents give this kind of collateral over loans that their kids take. It gets the kids a better interest rate, but is not quite as easy as a 'gift' from Daddy.

I am beginning to understand.

In the documents issued by the bank, the account will look very much like an ordinary account, but there will be conditions attached.

You need to analyse the exact wording of the conditions in every single case to be able to understand what you agree to; quite a challenge as it will be written in Thai.

You need to watch out - as usual.