Owning a domiciliary account in Nigeria is extremely important, especially if you’re a businessman, woman or entrepreneur that makes money online. It is even more important to conduct business outside the country, and your clients pay you in foreign currency. People that run blogs and freelancers find domiciliary accounts very useful. Stop wondering how to open a domiciliary account in Nigeria and get all the information you need.
Domiciliary accounts allow holders of the account to receive foreign currency like Dollars, Pounds, and Euros directly into their local bank account. Owning a Domiciliary account makes it easier to receive a foreign exchange. All Nigerian banks allow their customers to open a domiciliary account; however, the requirements for opening a domiciliary account differ depending on the bank’s policies.
Table of Contents
- Types of Domiciliary Account
- Importance of Having a Domiciliary Account
- Requirements For Opening A Domiciliary Account
- How To Open A Domiciliary Account In Nigeria (for Residents)
- How to Open a Domiciliary Account in Nigeria from Abroad (Non-Residents)
- How Much Does it Cost to Open a Domiciliary Account in Nigeria?
- How to Receive and Send Funds with Domiciliary Account
- Regulators and Domiciliary Accounts
- Fintech Banks and Other Domiciliary Account Alternatives
Types of Domiciliary Account
Like your traditional savings account, Domiciliary accounts have different types.
There is the Domiciliary savings account and the Domiciliary current account.
Domiciliary Current Account
A Domiciliary current account allows you to receive and save foreign currency. It also allows you to issue cheques in foreign currency. This type of domiciliary account is most suitable for businesses dealing with mainly foreign clients. The bank charges on this type of account are higher than others.
Domiciliary savings account
Domiciliary savings account simply allows you to receive, save, send and withdraw foreign exchange. This can be received over the counter, using a withdrawal slip, or you can have it transferred into your naira account.
Importance of Having a Domiciliary Account
Opening a domiciliary account is very important, especially if you run a business, you are an entrepreneur and freelancer with foreign clients. Some of the importance of opening a Domiciliary account in Nigeria include:
1. It enables ease of receiving funds in other countries from anywhere directly into your domiciliary account.
2. Apart from receiving foreign exchange alone, a domiciliary account allows you to transfer foreign exchange to other countries.
3. You can make online transactions using your domiciliary account. This is helpful if you buy products or items on online platforms from other countries online.
4. A domiciliary account enables you to be able to carry out both local and international transactions with ease.
5. If you’re a freelancer, you can link your domiciliary account to your platform and receive payment in foreign exchange from your clients. The money will be transferred directly into your domiciliary account.
6. With the dwindling state of the Naira against foreign currencies, it is advisable to save your money in dollars. You can conveniently save foreign exchange in your domiciliary account and receive good interest on your savings.
7. Some banks issue USD debit cards that allow users to carry out transactions online using their cards.
8. Domiciliary accounts help you save more reliable and secured currencies against inflation.
Requirements For Opening A Domiciliary Account
While some of the requirements for opening a domiciliary account in a Nigerian bank may be similar, most banks also ask for additional information. Some of the requirements for opening a domiciliary account are:
1. A Naira account in the bank you want to open the domiciliary account with.
2. You need 2 referees with an account in the same bank to sign the reference form.
3. A well-filled domiciliary account opening form you will be issued at the bank. The form must contain accurate information.
4. A valid means of identification. This includes a National ID card, Driver’s license, International passport, and Permanent Voter’s card.
5. Passport photographs
6. Utility bill.
How To Open A Domiciliary Account In Nigeria (for Residents)
Opening a Domiciliary account in Nigeria can be done either by going directly to the bank or by simply using the bank’s website. For the less tech-savvy individuals, opening a domiciliary account in Nigeria can be done in the following steps:
1. Choose the appropriate bank
2. Visit the bank’s customer service department and request an account opening form.
3. You will be required to supply some information and provide Government approved means of identification.
Once you meet all the requirements, your domiciliary account will be open.
While some people may want to avoid the hassle of physically going to a bank branch to open a domiciliary account, it is easier to open it online. Suppose you want to open a Dollar account in Nigeria online. In that case, all you have to do is visit the specific bank’s website.
Click the “Download account form ” on the website, and the file will be downloaded on your device. Fill out the downloaded forms and email them to your desired bank’s customer service mail account.
How to Open a Domiciliary Account in Nigeria from Abroad (Non-Residents)
Opening a domiciliary account in a Nigerian bank is not limited to people located in Nigeria. You can open a domiciliary account in Nigeria while living in another country.
To open a domiciliary account in Nigeria from another country, you should note that the requirements vary across banks. However, you will need to do the following.
1. Visit the bank’s customer service department and fill out a Non-resident form.
2. You will be required to provide a means of identification that the Government recognizes. Such identification includes an International passport, Driver’s license, or voter’s card.
3. Two referees form from current Nigerian account holders in the bank.
4. You will be required to provide proof of address with a stamp that shows your current address in the foreign country.
How Much Does it Cost to Open a Domiciliary Account in Nigeria?
One of the frequently asked questions about opening a domiciliary account in Nigeria is how much it costs to open a domiciliary account in Nigeria. The cost of opening a domiciliary account in Nigeria varies from bank to bank.
Some banks may require a minimum deposit of 50 to 100 Dollars or Pounds depending on the currency you want to open.
How to Receive and Send Funds with Domiciliary Account
To fund your domiciliary account, you need to purchase the foreign currency first and then deposit it into the account using a deposit slip.
You can either purchase the foreign currency at the bank using the official bank rate or purchase at a Bureau de change at black market prices.
Receiving foreign exchange into your domiciliary account is easy; you can receive money from abroad via wire transfer. The transfer takes 2-3 working days to be processed. Once the money appears in your account, you can decide to either withdraw the hard currency or withdraw the Naira equivalent of the money. The exchange will be done at the current approved bank rate.
You may also transfer money from your domiciliary account to another account abroad. This can be done by directly transferring the foreign exchange from your domiciliary account or depositing the money at the cashier’s desk.
The cashier would then issue the transfer to the foreign account on your behalf.
Regulators and Domiciliary Accounts
The Central Bank of Nigeria regulates Nigerian Banks, so apart from Bank requirements when opening a domiciliary account in Nigeria, you must fulfil certain central bank rules. Going against any Central bank rules may lead to a ban of the account or flag.
Domiciliary accounts are also always on constant watch by the Economic Financial Crime Committee. This makes it difficult for account holders to receive any amount of foreign currency they want.
The EFCC sets a particular limit on how much money a domiciliary account can receive in a single transaction. It ranges from 10 thousand dollars to fifteen ten thousand dollars. These restrictions are put in place to prevent fraudulent activities, tax evasion, and money laundering.
Fintech Banks and Other Domiciliary Account Alternatives
Nigerian local banks are not the only banks that allow you to open a domiciliary account. The improvement in the Nigerian Technological industry has inspired the tremendous growth of the financial technology sector.
Several Fintech companies have emerged in the past few years that make banking easier and smoother.
Fintech banks like Kuda provide easy ways to receive foreign exchange directly into their bank. Their partnership with the international payment platform -Payoneer- makes this possible. To receive foreign exchange directly into your Kuda bank app, you need to do the following
1. Download the Kuda bank app and register.
2. Verify your Kuda bank account
3. Link your Kuda account to your Payoneer account
Once you’ve followed all these steps, you can start receiving foreign exchange into your Kuda account. The app also makes it easy to convert foreign currency to naira.
Other platforms like Flutterwave also allow you to set up a marketplace on the platform and carry out transactions with international clients.
Flutterwave allows you to advertise your products, sell them and also receive payments. Flutterwave’s Barter platform operates like a domiciliary account; it allows users to send and receive foreign exchange to and from any country in the world.
Unlike the traditional banking system, these online banks make transactions easier and have fewer restrictions. You can send and receive money into these online domiciliary accounts at no extra cost or charges.
The advantage of the Fintech banks app is that you can receive any currency you want into your bank app when it comes to domiciliary accounts. With traditional banks, you can only receive one type of foreign currency per account.
Another notable disadvantage of using traditional banks to open your domiciliary account is the need to look for referees.
Most people do not like to act as referees because they don’t want to be held liable or implicated if something goes wrong. There is also an issue of high bank charges levied against domiciliary accounts. The charges are quite higher than that of Naira savings and current accounts.