Each country has a banking system of it’s own and regulations that determine which types of bank accounts can be opened in any of the banks operating in that country. Types of Bank Accounts in Nigeria, explained in this article show how much Nigerians have the liberty to, not only choose from numerous banks, but also from seven types of bank accounts.
The world is going digital and in most cases doing away with hard currency, such that having a bank account is now more of a necessity than a choice. Consequentially authorities and banks are forced to avail a variety of bank accounts to suit conditions of every economical class level.
Top 7 Types of Bank Accounts in Nigeria In 2021
This writer wishes to bring readers to the understanding that, before going to any bank to open an account for what ever reason, they need to know which type of bank accounts best suits the purpose of its opening. In the case of Nigeria, the seven choices are:
1. Savings Account
This is arguably the most common type of account worldwide by virtue of it being the choice of the salaried population demographic. The savings account is also popular because of affordability given the money needed to open one is always low and sometimes it is free. It is a type of account where the money you deposit accumulates interest though the rates are always low. There are also limited number of transactions permissible with this type of account.
2. Current Account
This one is the traders and entrepreneurs who need to; access their money from time to time, withdraw large sums of money and do multiple transactions. When you open a current account, in most cases a cheque book is issued. Money in a current account does not accumulate inerest and the cost of opening and maintaining a current account is relatively higher than a savings account.
3. Fixed Deposit Account
With this type of account, money is deposited for a period of time known as a term. The account holder can not have access to that money until the term ends. In Nigeria, terms are from a minimum of 30 days to a maximum of 180 days. Money in a fixed deposit account accumulates significant interest and is ideal for people saving up for big projects or investments.
4. Joint Account
As the name implies, a joint account is one that is opened in the name of two or more; all signatories to the account. In this type of account, no individual can make decisions concerning the account without the consent of other signatories. Joint accounts are common among business partners and married couples and in Nigeria there are two subtypes of joint accounts. The first one is the “joint-tenancy” which is the one used by couples mostly then the tenants-in-common being the choice for business partners for accountability purposes.
5. Domiciliary Account
A domiciliary account is a special type meant for foreign transactions and can accept foreign currency and send money into other countries. This account is common with big corporates that import and export goods.
6. Corporate Account
This is an account opened by big entities, usually multinational corporations. Corporate accounts are way more superior to personal or investment accounts and it is opened for business purposes.
7. Non-resident Nigerian Account
This is the account for patriotic Nigerians living in the diaspora and want to have an account at home. Non-resident Nigerian accounts make it easy for families in different countries to reach out to each other financially through Types of Bank Accounts in Nigeria.
Due diligence is needed when one is opening a bank account to avoid unnecessary inconveniences when trying to access financial services.