Choosing a bank to partner with can be quite confusing at first, and so is choosing an account type. In this article, we’ll share the key differences between current and savings accounts in Nigeria, so you’ll know the one that’s perfect for you.
Nigeria is the fifth most populous country in the world, with an estimated 190 million people. As a result, there are millions of people who use the bank every day.
Owing to this basic fact, the various banks in Nigeria provide a wide range of account types to meet the needs of their numerous customers.
In general, banks in Nigeria group their numerous account types into two: savings and current account.
We’ll first of all talk about each of them before explaining their key differences.
A savings account allows you to deposit money, keep it safe, withdraw funds whenever you want, and at the same time earn some interest depending on your bank rate.
The general features of savings accounts include:
- Access to Internet banking.
- MasterCard or Visacard for Online, POS and ATM transactions anywhere in the world.
- Annual interest rates at 4% or more (vary from bank to bank).
What you need to open a savings account:
- Visit your desired bank to request and fill the account opening form.
- You’ll need to provide an identification document (Driver’s License, International passport, National I.D Card, or any other acceptable by your bank).
- You also need to provide at least one passport photograph.
- Some banks request a receipt for your utility bill issued within the last 3 months.
A current account is a type of account that caters to frequent deposits and withdrawals by cheque. In other words, it is the most suitable for SMEs and Companies with high cashflow.
What you need to open a current account
- Means of identification (International passport, Driver’s Licence, National I.D Card, and any other means of identification deemed fit by your bank)
- At least one passport photograph.
- Two completed reference forms from acceptable referees.
- Utility bill issued within the last 3 months
Difference between current and savings accounts
- One huge difference is that savings accounts yield annual interests but current accounts do not.
- Another notable difference between current and savings accounts is that the steps involved in opening a current account is more complicated than that of savings. For example, most banks in Nigeria request for at least two duly completed reference forms and this can turn out to be a complicated task.
- Generally, current accounts have no limit to the number of daily, monthly or yearly transactions, but savings do.
- Some savings account types have a minimum and maximum balance; however, current accounts have no such limitations.