Having a bank account is a norm today. There are different types of bank accounts for different purposes. In this article, we will be telling you about the different types of bank accounts.

It is important to note the type of account that fits your business or goal before opening one. The aim of this article is to enlighten you on the different types so that you don’t go into the banking hall uninformed.

Although there are seven types of bank accounts, there are four major types of bank accounts.

four major types of bank accounts

The four major types of bank accounts are:

1. Savings account

This is like the most basic type of account. Moreover, it is arguably the most popular bank account most bank users operate.

A savings account is an account that is suitable for saving. It is just for deposits and withdrawals. There is a limit to the type of transaction one can carry out with a savings account.

Also, a savings account is one that yields interest according to the amount of money in the account and the banks’ interest rate. It is preferable for those that want to save their money.

Different banks have different specifications with regard to interest rate, opening balance; minimum operating balance, among others.

To open this type of account, you will require a valid means of identification (National ID, International passport, driver’s license), a utility bill (Electricity bill, Water Rate bill, Tenement rate, Rent receipt) and passport photographs.

2. Current account

The current account would be better for businesses that require lots of transaction. This is because unlike the savings account, transactions on this account are unlimited.

Current accounts are usually charged with maintenance fees. Also, one has to be 18 years or older to be able to open a current account.

Furthermore, you will need a legitimate means of identification and a utility bill as proof of address and complete signature specimen card(s).

3. Fixed deposit account

The fixed deposit account is for a stipulated period of time. The time could be a minimum period of 30 days and a maximum period of 180 days.

During this time, a fixed deposit account user cannot withdraw the money they have deposited until the duration elapses.

Persons or corporate clients aiming to earn high interest on the money they want to deposit can open this account instead of the other types of account.

4. Domiciliary account

This type of account is mainly for the purpose of carrying out foreign transactions –such as transferring money to another country or receiving foreign currency from other countries.

With domiciliary accounts, deposits can be made in foreign currency of choice and there is usually no limit to the number of withdrawals.

However, a flat charge is usually made on each transaction. In addition, for transfers made from foreign banks, holders of this account will pay a service charge in the foreign currency of choice.

To open a domiciliary account, you must have a utility bill, passport photographs, valid means of identification and a minimum opening balance which differs per bank and per preferred foreign currency.

Other types of bank account

5. Joint account

This type of account is opened with the name of two or more people who are all signatories to the account.

No individual can reach a decision on a joint account without informing the other signatory or signatories.

There are two types of joint accounts

i. Tenants-in-common: This is mostly operated by business partners

ii. Joint-tenancy: Married couples usually co-own this type of account.

6. Corporate account

This type of account is an account opened by multinational companies and big corporations business purposes.

Moreover, it is completely different from the person or investment banking accounts, it is majorly for business purpose.

7. Non-resident Nigerian account

A Non-resident Nigerian account is a bank account designed for Nigerians living in the diaspora and want to operate a Nigerian bank account.

So if you are a Nigerian living outside Nigeria, this is the type of account suitable for you.

conclusion

It is important to weigh your options carefully before opening an account.

Also, you can walk into any banking hall of your choice to make further inquiries about the type of bank account you want to open; bearing in mind the purpose for opening it.

We hope that this article was helpful. Also check on our other post, the difference between a current and a savings account.