Are you wondering how domiciliary accounts work in Nigeria? Do you wish to own one and don’t know how to go about it? Here we’ll tell you everything you need to know about domiciliary accounts in Nigeria. Furthermore, we’ll tell you of the advantages (or disadvantages, if any) of owning a domiciliary account in Nigeria.
NIgeria is a country of over 200 million people, many of which carry out transactions with foreigners. If you’re one of such people, then you might need to register for a domiciliary account at any bank of your choice.
What is a domiciliary account?
A domiciliary account is a type of bank account used for receiving or sending funds in a particular foreign currency.
How domiciliary accounts work in Nigeria
Similar to other bank accounts, the sole purpose of owning it is to make transfer or reception of funds easy, albeit in foreign currency.
Once you register for it at any bank, you’ll receive your account number. After which, you can send that account number to anyone interested in sending you money using that account. On the other hand, you can transfer funds from that account to other bank accounts operated in the same currency.
If you have a domiciliary account in USD, then you can’t use it to receive funds in British Pounds, Euros or any other currency. In other words, your domiciliary account can only operate with one foreign currency at a time.
If you need to perform transactions for several foreign currencies, then you might need to open domiciliary accounts for each of them.
For instance, I could own a domiciliary account for USD transactions and a separate domiciliary account for British pounds transactions. There’s no limit to the number of domiciliary accounts you can own, as long as you can meet up with the cost implications and all other criterias.
How to own a domiciliary account in Nigeria
Nigeria has exactly 27 CBN-approved banks. They are:
- Access Bank Plc
- Diamond Bank Plc
- Fidelity Bank Plc
- First City Monument Bank Plc
- First Bank of Nigeria Limited
- Guaranty Trust Bank Plc
- Union Bank of Nigeria Plc
- United Bank for Africa Plc
- Zenith Bank Plc
- Citi Bank Nigeria Limited
- Ecobank Nigeria Plc
- Heritage Banking Company Limited
- Keystone Bank Limited
- Polaris Bank Limited (Formerly Skye Bank Plc)
- Stanbic IBTC Bank Plc
- Standard Chartered
- Sterling Bank Plc
- Unity Bank Plc
- Wema Bank Plc
- SunTrust Bank Nigeria Limited
- Providus Bank Limited
- Jaiz Bank Plc
- Coronation Merchant Bank
- FBNQuest Merchant Bank
- FSDH Merchant Bank
- Rand Merchant Bank
- Nova Merchant Bank
Each of the banks listed above allow their customers to create domiciliary accounts operated on any of their supported foreign currencies. Generally, the banks in Nigeria always support domiciliary accounts operated in either US dollars ($), Euros (€), or Pounds Sterling (£).
If you’re interested in owning a domiciliary account with any of the banks listed above, all you have to do is visit a branch closest to you. Afterwards, approach the customer care representative of that bank and make clear your intentions.
You will be required to provide the following information / documents:
- Filled and signed Domiciliary Account opening form.
- A copy of identification document (Driver’s License, International passport, National I.D Card, or any other acceptable by the bank).
- One passport photograph.
- Two (2) completed reference forms.
- Utility bill issued within the last 3 months.
In addition, for most banks in Nigeria you’ll have to make an initial deposit of exactly $100, £100 or €100 to open a domiciliary account in US dollars, pounds sterling or euros respectively. As the case may be, several banks in Nigeria make it possible to withdraw back that deposit after your account is created.
However, the account opening fee is much higher at some banks in Nigeria. For instance, FirstBank Nigeria charges $5,000, €5,000 or £3,000 for opening a FirstDom account and $500, €500 or £300 for opening the regular domiciliary account.
In addition, at FirstBank the minimum operating balance is capped at $5,000, €5,000 or £3,000 and $500, €500 or £300 respectively. In other words, you must always have up to that amount in your account balance.
Advantages of owning a domiciliary account in Nigeria
- You can maximise profit and minimise expenses incurred as a result of receiving foreign deposits into the regular naira savings/current bank accounts.
- With your dollar, pounds or euros Mastercard, you can minimise the cost of conversions while purchasing online from websites that use your currency type.
- Depending on your agreement with your bank, you can receive very large sums of money without hassle.
- Access to cash withdrawals in foreign currency from any bank branch with which you have an account.
There are really no much disadvantages associated with owning a domiciliary account. Generally, the biggest problem customers face is the rigorous processes involved in creating your account. If you’re able to overcome those hurdles, you will begin to enjoy all the perks associated with owning a domiciliary account in Nigeria