He lost every penny as part of a loan to take control of the club, HSBC executive Alan Hills said.
Redknapp's barrister John Kelsey-Fry QC used the example to deny prosecution claims that the Tottenham manager was a "hard-headed businessman".
He asked Hills at Southwark Crown Court, in London: "Do you remember an occasion when he was persuaded to loan, at very short notice, £250,000 to buy Oxford United and that money just disappeared into the mist?"
Hills replied: "I have never seen it, yes."
Hills said Redknapp had shown acumen in the property market, but he agreed with Kelsey-Fry's claim that "with the benefit of hindsight, some investments were disastrous".
He added: "With regard to the shares (in Oxford United)...it is fair to say they were very unsuccessful."
Hills, an associate director with HSBC in London between 2000 and 2009, said he held meetings with Redknapp alongside the football boss' solicitor and accountant.
The jury was told Hills was not initially informed of Redknapp's Monaco dealings in addition to the domestic accounts he held with HSBC.
Hills said: "I would have expected to have known or be told of it."
When Redknapp mentioned the account, he told Hills the account name was "in relation to his dog".
"When asked for a name for the account, that was the first thing that came to his mind," Hills told jurors.