A domiciliary account is not a common or regular Naira account. You may have never heard of this type of account before or maybe you have but you don’t know how it operates. As you continue to read this article, you will learn more about domiciliary account meaning, how to send money to this type of account, and about its advantages and disadvantages.
What is domiciliary account?
A domiciliary account is a type of bank account in which transactions are carried out in foreign currencies. The account can be used to receive and send money in foreign currencies such as dollars, pounds, euros, etc. All Nigerians have the right to open and operate a domiciliary account.
If you deal in international transactions or you have reasons to send or receive money in foreign currencies, then it is advisable for you to open a domiciliary account. Note that this type of bank account is opened and held locally. Although you can open it in Nigeria and operate from outside the country with your MasterCard or internet banking. Domiciliary account is different from a usual foreign account. A foreign account is held by foreign banks outside of Nigeria.
There are two different types of domiciliary accounts you can open in Nigeria:
A current domiciliary account
This account is operated just like a current Naira account but is in a different currency and also the charges applied are different. You can save money in foreign currencies, collect money over the counter in foreign currencies, and also issue cheques to third parties. You can use this type of account if you are a businessperson who deals in foreign currencies. But if you just need a domiciliary account to receive and send foreign currencie, then it is advisable to create and use a savings domiciliary account.
A savings domiciliary account
This account is also like the usual Naira savings account. You can save and withdraw money in foreign currencies using a foreign currency withdrawal slip.
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How to operate a domiciliary account
To operate a domiciliary account you have to open one at a bank of your choice in Nigeria. Almost all the banks in Nigeria operate domiciliary accounts. But if you are not sure which one to use, you can try one of the following: First Bank Nigeria, GTBank Plc, UBA, Zenith Bank, Ecobank, Access, Wema, FCMB, Sterling Bank, Fidelity, Diamond Bank, Stanbic IBTC. After opening the account, you will be given your bank account number.
If you are receiving money, you will send the account number and other necessary details to the person sending money to you. The person has to send the money in the currency in which the account was opened. You cannot receive money sent in pounds into a dollar domiciliary account.
If the money is sent through a wire transfer, it takes two or three or even more working days for you to receive the money. You can go to the bank and collect money in the currency in which the account was opened with a foreign currency withdrawal slip. Please note that you can withdraw foreign currency at the ATM as well.
If you want to send money to a domiciliary account or save money in it, you have to buy dollars first and then pay it into the account using a deposit slip. You can buy the dollar at the bank or at the Bureau De Change depending on which one is favorable to you.
Advantages of operating a domiciliary account
- One advantage of a domiciliary account is that it gives you the opportunity to save money in global currencies that are reliable without losing its value. This gives you more control over unstable currencies.
- Also, you can receive foreign currencies directly with your domiciliary account.
- You can also pay for international transactions online via your MasterCard.
Disadvantages
- You can only operate one type of foreign currency in a domiciliary account.
- You need to get referees who are also using domiciliary accounts to be able to open a one ourself. And most times, it is difficult to get referees because most people operate Naira savings or current account.
- Also, the charges on the account and transactions are high. So, you need to have a good reason or be dealing in the large sums of money in foreign currency so that is really worth it to operate a domiciliary account.
You can inquire more about the domiciliary account, how it works, and how to open one at the customer care desk at the bank where you wish to open the account. But with the help of this article, you will have an idea of what domiciliary account is and how it works before going to the bank.
READ ALSO: How to send money to a domiciliary account?
Source: Naija.ng