How to Open And Use a Domiciliary Account in Nigeria

How to Open And Use a Domiciliary Account in Nigeria

Dommiciliary Account in Nigeria

Opening a domiciliary account in Nigeria can be a smart financial decision, whether you’re looking to send money abroad, receive international currency, or protect your wealth against the devaluation of the Naira. However, with so many options available and the complexity of some processes, it’s essential to have a clear understanding of the key aspects involved.

In this article, we will not only guide you through the essential steps for setting up your domiciliary account but also provide you with valuable insights to make the process smoother and more accessible.

What is a Domiciliary Account?

A domiciliary account is a type of bank account that allows you to hold, send or receive foreign currencies like US dollars, euros, or pounds sterling, rather than the local Nigerian Naira.

How do Domiciliary Accounts work?

When you open a domiciliary account, you typically do it with a bank in the country where you live.

After the account is set up, the bank will provide you with an account number, and they might send this information to your email or mobile phone. This account number allows you to access and manage your domiciliary account, making it easier for you to use it for international transactions and currency holdings.

The moment you receive your domiciliary account number, you can share it with the person who’s sending you money from abroad, along with any additional details required. If it’s a dollar account, the money will be sent in US dollars, so the sender needs to send it in dollars.

Once you get an alert that the money has arrived, you can visit your bank and withdraw the dollars by filling out a foreign currency withdrawal slip. They will give you the dollars, and then you can take them to get exchanged.

Currencies Acceptable for Domiciliary Account

Your domiciliary account’s acceptable foreign currency depends on both your current location and the currency options provided by your local banks. Typically, banks offer the most widely used currencies, such as US dollars, British pounds, or euros, as they are widely accepted for international transactions.

To determine which currency is suitable for your domiciliary account, consider the specific purpose of the account. If it’s for receiving payments from a transaction, you should find out the currency in which you’ll be paid before opening the account. Always double-check this currency with your bank before proceeding with the account setup.

Can I send money from my Domiciliary Account?

Yes, you can transfer money from your domiciliary account to another domiciliary account abroad or within your country.

Depending on your bank, you could be charged a fee for this. All you need to do is fill out the transfer form and enter all the details of the account you want to transfer the money to; hand the cash to the bank staff and the money will be sent as appropriate.

Advantages of having a domiciliary account

The biggest advantage of having a domiciliary account is protection against Naira devaluation. However, other advantages include:

  1. You can make international travel more convenient by avoiding unfavourable currency exchange rates
  2. They simplify sending and receiving money from abroad
  3. It’s an ideal option if you’re engaged in international business
  4. Domiciliary accounts help in foreign asset investments, like stocks and bonds
  5. You have access to foreign currency for unexpected costs when local currency may not be enough

Disadvantages of having a domiciliary account

On the flip side, here are a few demerits of owning a domiciliary account:

  1. Domiciliary accounts often come with higher maintenance fees compared to regular accounts, which can reduce your savings
  2. Fluctuations in exchange rates can lead to losses when converting foreign currency back to Naira
  3. Many banks require a significant initial deposit to open a domiciliary account
  4. Banks may charge fees for various transactions, including wire transfers and currency conversions, which can add up in the long run
  5. Some domiciliary accounts have withdrawal restrictions, making it less accessible for day-to-day expenses
  6. Income earned in a domiciliary account may have tax implications, which require proper reporting and compliance with tax regulations

Domiciliary account document checklist

The following documents are usually required by Nigerian banks to open a domiciliary account. Check with your bank before going to make sure you have the right documentation.

  1. Completed account opening form (varies by bank)
  2. Completed specimen signature card
  3. Two (2) recent passport photographs
  4. Address verification documents, such as a utility bill
  5. Valid ID (International passport, driver’s license, or national ID card)
  6. Resident permit (if applicable)

Ensure you have these documents in order before visiting your bank to open a domiciliary account.

How to open a domiciliary account in Nigeria

After confirming with your bank and having all the right documents, you can request to open a domiciliary account. The forms you need are often available for download on the bank’s website, but some banks might need you to visit their branch in person to apply. Most of the time, there’s no fee to open a domiciliary account in many banks.

Remember: if you want to open a joint account with someone else, you might need a special form for joint accounts, and both people must visit the bank to apply together.

Best Banks to open a domiciliary account in Nigeria

1. Guaranty Trust Bank

Currency Options: US Dollars, Pounds, or Euros.

Cards: Guaranty Trust Bank offers a Dollar Debit Visa Card that provides access to funds from ATMs worldwide, payment for goods and services at various merchant locations, and uses Chip and PIN technology for security.

2. Zenith Bank

Account Types:

i. Ordinary Domiciliary Account

Currency Options: USD, GBP & EUR

ii. Cash Domiciliary Account

Currency Option: USD

Cards: Both account types provide access to Debit Cards (USD)

3. FirstBank

Account Types:

i. Domiciliary Account

  • Currency Options: US Dollars, Pounds Sterling, Euro, and CFA.
  • Initial Deposit and Minimum Balance: $100, €100, £50, CFA10,000.00

ii. FirstDom Account

  • Currency Options: US Dollars, Pounds Sterling, Euro, and CFA.
  • Minimum Opening Balance: $5,000, €5,000, or £3,000.
  • Minimum Operating Balance: $5,000, €5,000, or £3,000.
  • Transaction Fees: Transfer charges on the account as low as 0.25% flat.

4. Access Bank

Account Types:

i. Domiciliary Current Account

ii. Domiciliary Savings Account

Domiciliary Current Account Features:

  • Opening balance of $100, £100 & €100
  • No minimum balance required
  • No Account maintenance fee
  • Cash handling charge (COT equivalent) of 0.5% on withdrawals
  • Interest rate 0.01% p.a. (above 100,000 $, £, €)
  • No restriction on the number of withdrawals
  • Different variants of Debit Cards based on the customer’s preference
  • Access to alternate channels e.g. Internet and Mobile banking
  • Availability of a chequebook
  • Allows direct debit instructions
  • Third-party transactions are allowed
  • All other transactions are charged at the bank’s approved rate

Domiciliary Savings Account Features:

  • Opening balance and daily balance of [$, £,€] 500 for Classic
  • Opening balance and daily balance of [$, £,€] 10,000 for Dom Plus
  • Interest rate of 0.1% and 0.2% p.a., but paid monthly (Classic and Plus respectively)
  • Different variants of Debit Cards based on the customer’s preference
  • Access to alternate channels e.g. Internet and Mobile banking
  • Non-chequing account
  • All other transactions are charged in line with the Banker’s tariff
  • $10 issuance of debit card
  • Free debit card for Dom Plus

Currency Options: Pounds, Euros, Dollars, and Yen

Transaction Fees:

  • Cash handling charge: 0.05% on withdrawals
  • Closure of account: Free
  • Cost of chequebook, ATM cards, and all other transactions: Charged in line with the Banker’s tariff
  • Interest rate is based on 30% of CBN Monetary Policy Rate

Cards: Debit cards with different variants are available.

UBA (United Bank for Africa)

Dommicialry Account Types:

1. Domiciliary Account

2. Freedom Dom Account

3. Dom Advantage Account

4. UBA Kiddies Domiciliary Account

Domiciliary Account Features:

  • Opening balance of $100, £100 & €100
  • No minimum balance required
  • Cash handling charge (COT equivalent) of 0.5% on withdrawals
  • Interest rate 0.01% p.a. (above $100, £100, €100)
  • No restriction on the number of withdrawals
  • Different variants of Debit Cards based on the customer’s preference
  • Access to alternate channels e.g. Internet and Mobile banking
  • Availability of a chequebook
  • Allows direct debit instructions
  • Third-party transactions allowed
  • No withdrawal charges

Freedom Dom Account Features:

  • Opening balance of zero (0) USD
  • No monthly maintenance charge
  • Easy documentation requirements
  • Free access to check account balances via the Mobile App and Internet banking platform
  • Receive foreign currency and Telex inflows directly into your account
  • No withdrawal charges

Dom Advantage Account Features:

  • Minimum opening balance of $100, €80, or ₤70
  • Operated in major currencies – US Dollar, GBP, Euro, etc.
  • Foreign Cheques/Instruments can be credited to the account
  • Can be used as a channel for investments in securities and real estate in Nigeria and abroad

UBA Kiddies Domiciliary Account Features:

  • Denominated in USD, GBP, & EURO
  • Intended for parents saving for children’s secondary/tertiary education abroad
  • Various requirements for Parent/Guardian and Child
  • Fees/Charges for withdrawals, telex transfers, and draft requests

Currency Options: Pounds, Euros, Dollars, Yen, USD, GBP, Euro, etc.

Bottom line

Opening a domiciliary account in Nigeria is a wise financial move if you have international transactions in mind. It may take a couple of days to activate your account, but the benefits of easy access to foreign currencies, such as the US dollar, are well worth the initial wait.

However, if you prefer a hassle-free option for sending or receiving money in foreign currencies, fintech solutions might be the way to go. Ultimately, the choice is yours, and it’s essential to explore the options that best suit your financial needs and preferences.

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