Bank accounts are needed for most financial transactions. There are different types of bank accounts in Nigeria to choose from, depending on individual needs. This article will explain in simple terms the major types of bank accounts in Nigeria.
Types of Bank Accounts in Nigeria
The following are the different types of bank accounts in Nigeria;
- Savings Accounts
- Current Accounts
- Joint Accounts
- Salary Accounts
- Domiciliary Accounts
- Diaspora Accounts
- Fixed Deposits Accounts
- Corporate Accounts
This is the commonest type of account most people operate in Nigeria. It is suitable for personal savings and is basically for deposits and withdrawals in person.
Third-party withdrawals and some transactions are restricted in savings accounts. The account accrues monthly interest and does not allow funds withdrawal to zero Naria thus there is a minimum balance that must be in the account.
A current account is a Demand Deposit Account (DDA), in which funds deposited are payable on demand to zero Naria via different personal or third-party payment channels. It is best for businesses as financial transactions are limitless.
The current account does not accrue any monthly interest on deposits/savings rather there is a service charge for any deposits and withdrawals on the account.
Savings/current accounts can be either a single or joint account. When the account is owned by an individual it is a single account. A joint account is opened with the names of more than one person who are signatory to the account.
Transactions on the account have to be authorised by all the signatories. Joint accounts can be owned by married couples (Joint tenancy) or business partners (Tenants-in-common).
Joint accounts are suitable for joint savings, execution of projects and business.
This is a type of special savings or current account designed for salary earners in the private and public sectors.
Usually requires zero opening balance and can be converted to normal savings or a current account on retirement or termination of employment.
These special types of bank accounts in Nigeria and other African countries are designed for the deposit and withdrawal of foreign currency.
It is useful for international travel and the transfer/receiving of funds from other countries.
Diaspora Accounts/Non-resident Nigerian Accounts
This is somewhat similar to Domiciliary Accounts, however, while domiciliary accounts are opened and operated primarily in Nigeria, Diaspora accounts are for Nigerians living abroad who wish to open and operate foreign currency bank accounts in indigenous Nigerian banks like UBA(United Bank for Africa) from anywhere in the globe.
Diaspora accounts allow Nigerians living abroad the opportunity to access Nigerian banking services from their international locations.
Fixed Deposits Accounts
This is designed for individuals and corporate organisations who wish to invest their funds with the bank for a specific period of time(minimum duration is 30 days).
Fixed Deposits Accounts aim to maximise earnings and return of the invested funds after the specified period.
It is suitable for individuals/ organisations which have extra funds, such funds can then be deposited into a fixed deposit account.
To earn the complete interest and return on the invested funds, the invested funds will not be tampered with until the expiration of the specified period.
Withdrawal of part or all the invested funds will result in a loss of the accrued interest and sometimes a percentage of the invested funds depending on the terms and conditions given.
Corporate Accounts/Business Accounts
Corporate Accounts are also known as business bank accounts. They are bank accounts owned and operated by business owners or organizations for investments, earnings, day-to-day running and operation of the business.
It separates the personal account of the owner of the business from the business account and offers some legal protection to the personal funds of the business owner in case of business failure and litigation.
The common types of bank accounts in Nigeria have been explained in this article. There are other types of bank accounts in Nigeria which were not explained here, however, there are subtypes of the ones explained and further details can easily be gotten from your financial institution.
Explore How to open a bank account online.