Before you open a domiciliary account in Nigeria, there are few things you should know. As a business person, an internet guru, or online marketer, it always gets to a point where we feel it is time to get such an account, but not many are aware of the certain limitations and the major benefits one could derive from obtaining a domiciliary account from any Nigerian Bank.
People keep hearing about the domiciliary account, they dash to open one without being properly informed on what it is all about. A domiciliary account is fondly called a dollar account, it could have been a pound account or euro account but I guess most people prefer calling it a dollar account because the dollar has always been the most preferred when it comes to foreign exchange.
Therefore, if you are asking about what is a dollar account, it means the same as a domiciliary account but be cleared with your bank when opening the account as there are other domiciliary accounts denominated in euro, pounds, and yen. China happens to use Yen.
WHAT YOU SHOULD KNOW ABOUT DOMICILIARY ACCOUNT
A domiciliary account is best described as an account that allows individuals, investors, or businesses to make payments, transfer money, and also withdraw funds in foreign currency. If you are dealing with a foreign client or investor, it makes it easier to carry out your bank transaction across borders.
You can be working in Nigeria and still get paid in dollars, euros or pounds. There are quite a number of experts like graphic designers, software/app developers, content developers, and seo experts who get paid via wire transfer on a regular basis. Also, if you are an importer or dealer, you will be able to transfer funds in foreign currencies from your domiciliary account to another account in Nigeria or to a merchant abroad.
If you have been banking in Nigeria for a while, you will notice that a savings account has been the most popular bank account in Nigeria with the current account being the second. For a domiciliary account, one cannot disagree that only a few percentages of Nigerians know what it is used for.
All banks in Nigeria allow old and new customers to open a domiciliary account. Each bank has its distinctive requirements but if you are looking for a bank with zero opening balance, then you should check out zenith bank and GTB. Most of the Nigerian banks come with an opening balance, which can be withdrawn after a successful application.
Banks In Nigeria Where You Can Open A Domiciliary Account Are:
- United Bank for Africa (UBA)
- Fidelity Bank
- Zenith Bank
- Union Bank of Nigeria
- Heritage Bank
- Access Bank (Diamond Bank)
- Keystone Bank
- Unity Bank
- Sterling Bank
- Stanbic IBTC Bank
- Guaranty Trust Bank (GTB)
- Wema Bank
- Ecobank Nigeria
- Jaiz Bank
- Standard Chartered Bank
- First City Monument Bank (FCMB)
- Polaris Bank
After opening a domiciliary account at any Nigerian bank of your choice, you will be able to send and receive funds in foreign currencies. Upon successful application, the account number will be sent to you.
To receive money in dollars, euros, yens, or pounds, you will need to send account information to the sender. Bloggers also use it to receive Google AdSense payment, therefore you will need to correctly set up your account on your Google Adsense.
Do note that money sent to your domiciliary account may take up to 72 working hours before hitting your account, at most 5 days. Therefore, you will need to exercise some patience even when there was a claim that the money has been forwarded into your domiciliary account.
After the days elapsed and you still do not receive it, you can then contact your bank. Your bank may ask you to provide your Account Number and the details of the inflow (if possible, please provide the telex copy of the transfer) so they can assist you swiftly. With the information provided, they will be able to track your payments.
The major reason why most people prefer using a domiciliary account is to avoid being shortchanged by banks. The commercial banks are out to make money on most of their products, using an account other than a domiciliary account means you have no negotiating power as banks will only give you at their own rate.
Money sent to your domiciliary account is exactly what you will see in your foreign currency account, therefore you will be able to withdraw the foreign currencies at your bank and then proceed to Bureau De Change. At any Bureau De Change, You can negotiate an exchange with the Bureau De Change (BDC) depending on the market. Meanwhile, always use trusted ones as not everyone gets their happy endings. If you are in doubt ask the bureau de change operator to send to your bank account and then confirm using your bank app.
Some even ask the operator to follow them to the bank and then deposit the money into their account. This way, you will be playing very safe and also avoid being paid with fake currency.
Banks also buy and sell foreign currencies. However, banks’ prices may not be as generous as Bureau De Change but it is safer. Another option is to use a Bureau De Change that has an established space if you are looking to milk as much as you can.
As a rule, always know the prevailing market at the time of transaction before visiting a Bureau De Change, this ensures you are not totally in the dark. With this knowledge, you will be able to find a favourable ground.
REQUIREMENTS NEEDED TO OPEN A DOMICILIARY ACCOUNT IN NIGERIA
- Filled and signed account opening form and one passport photograph.
- A copy of the identification document e.g National I.D Card, Driver’s License, and International passport.
- Two (2) completed reference forms and address verification e.g. Utility bill within the last 3 months, bank statement or local authority tax, etc.
- If you already own an account with the bank, you will not need to produce the I.D card and Utility Bill.
BENEFITS OF OWNING A DOMICILIARY ACCOUNT
- Customers can receive payments via a domiciliary account from another country using wire transfer.
- It gives you more control as you will be able to hold your funds in foreign currency until it is favourable.
- Make payments for goods or services to any international merchant from any part of the world or in Nigeria.
- Make withdrawals in foreign currency from your bank.
- Customers can comfortably carry out their transactions from anywhere.
- Access to debit cards for easy transactions.
- Enjoy unlimited withdrawals and also enjoy 24/7 Banking services on various e-channels.
- Most importantly, you must be at least 18 years old to operate or own a domiciliary account in Nigeria.
DISADVANTAGES OF A DOMICILIARY ACCOUNT
- As a domiciliary account holder, you are limited to one foreign currency type.
- Keeping your money into a domiciliary account could be risky because of volatility in the market.
- As a rule, you will need to produce at least 2 referees who have a current account which is very difficult to find since most people use the saving account
HOW TO OPEN A DOMICILIARY ACCOUNT IN BANK IN NIGERIA
- To own a domiciliary account in any Nigerian bank, simply go to any of their branches.
- Ensure you have already procured the complete documents needed to get the account.
- Obtain your account opening and reference form from the Customer Service Unit.
- Complete the account opening form and the two completed reference forms must have been attested by two different referees.
- Go back to the bank and submit all required documents to the Customer Care.
- In 3 to 4 days, you will be sent your domiciliary account number. If there is an issue, you will receive an update on your registered email address.
HOW TO TRANSFER MONEY TO A DOMICILIARY ACCOUNT
As it has already been established, this is unlike what you are used to, that is totally different from a savings or current account. You do not use a mobile money agent to send money to a domiciliary account, this time you will need to take a different approach to fund an account via wire or swift transfer.
To transfer money or funds, you can use your local bank, bank app or internet banking. When sending money to another domiciliary account you will need to provide the following information:
- Bank Name:
- Bank Address
- Account Name
- Account Number
- Swift Code
A Domiciliary account holder who wants to receive money from Abroad via wire transfer will need to send the required details to the sender. If you are having issues with getting your IBAN, Swift Code, or other information that may be required, contact your bank fo guidelines.
CAN ONE RECEIVE FOREIGN CURRENCIES INTO A NAIRA SAVINGS ACCOUNT?
Gone are the days when this is not possible as an ordinary account can either be a current or savings account, although points more on a savings account.
Nowadays, you can now receive foreign currencies in your Naira Account, although the rate will be decided by your bank. This, of course, may not give you as much control as much as you want. The major benefit of using a domiciliary account for all your foreign currency transaction is that you will be able to get better rates.
After withdrawing your foreign currency which could be in Euro, Pounds, Dollars, or Yen, you can then proceed to Bureau De Change which of course will give you a better deal.
You may actually think that the difference is not much probably because you only deal with a few dollars or pounds. You will understand better when you start dealing in large quantities to the extent that even a N30 difference per unit can be huge when put together.
HOW TO TRANSFER MONEY ONLINE USING DOMICILIARY ACCOUNT?
As a domiciliary account holder, you will be able to transfer money online to another domiciliary account. This is possible using an electronic banking platform, otherwise called internet banking.
A Domiciliary account customer can also set up a fixed amount of money which is to be transferred to the beneficiaries on a weekly, monthly, quarterly, or yearly basis. When using internet banking or bank app, the banks make it compulsory that you should use a secure Token device for security purposes.
After login into your internet banking, you may come across FX Transaction depending on your bank. The FX Transaction also means Foreign Exchange Transaction, you can select applicable sub-menu for your bank transfer.
To access internet banking, visit your bank’s official website.