A bank account is a type of financial account held in a bank on your behalf for the safe custody of your money.
A bank account can be seen as an invisible wallet a bank keeps for you, this wallet is used by the bank to hold your money. Any money you withdraw from your bank account will be taken off your wallet and any money you pay into your bank account will be added to the wallet.
When you open a bank account, a bank account number will be given to you. You need this bank account number to pay in or withdraw money from your bank account.
Like all countries of the world, there are laws and regulations governing the process of opening bank accounts in Nigeria.
The Central Bank of Nigeria regulates all banking institutions in Nigeria. The apex bank is in charge of rolling out regulations governing bank accounts opening.
Steps to open a bank account
Decide the bank you will like to open a bank account with. Do you want to open an account with a regular bank, a merchant bank, a microfinance bank or a finance house?
Decide on the type of the bank account you want to open? Is it current, savings or fixed deposit account?
Visit the bank you choose with a proof of your Identity (international passport or driver’s license or voter’s card), proof of address (utility bill like electricity, water or waste bill), passport photographs, seal (in case of a corporate account), board resolution (corporate accounts) and incorporation documents (corporate account).
Fill the bank account opening form; please note the account opening form can be completed in a bank’s branch or online. Some banks now allow Nigerians to open bank accounts through the internet.
Enroll for a Bank Verification Number (BVN). The bank verification number allows the government to safeguard the bank accounts of people whilst also guarding against illegal activities.
After completion of the bank account opening form, your bank account will be opened. This can take between 1-24 hours
After the opening of the bank account, you may request for a debit or ATM card.
For foreigners, you may need your proof of residence in Nigeria before a bank account can be opened for you. Documents like expatriate quota, naturalization document or work permit should suffice.
Types of Bank Accounts in Nigeria
There are basically three types of bank accounts in Nigeria namely:
Personal Bank Accounts
This is a type of bank account opened for individuals. It is not intended for corporate or large business transactions. To open a personal bank account is fairly simple. Some types of personal bank accounts do not need any ID at all. You can also open it on some bank’s website.
Some personal bank accounts are for wealthy people; this is called private or premier accounts. You must have a healthy balance before any bank in Nigeria can open this type of personal bank account for you. With a private bank account, you are entitled to a lot of privileges like access to VIP lounges, non joining of queues in banking halls and free insurance plan etc.
There are two categories of personal bank accounts in Nigeria namely:
- Current Account: This is a type of bank account that allows an individual to use cheque facilities. This means that you can withdraw money from your bank account by using cheques and third party cheques can be deposited in the account. The bank charges a small fee for allowing you to operate a current account. The opening process of current account is also a little more stringent, you will need people to act as your referees in order to open a current account.
- Savings Account: Savings accounts do not allow cheque cashing option. You have to use a withdrawal slip to withdraw money from your account. Cheques can also not be deposited into a savings account. You have to pay in and withdraw from your savings account yourself. It is very easy to open a savings account. Balances in your savings account also accrue interest unlike current accounts.
- Fixed Deposit Account: This is a type of personal bank account where an individual lodges funds for an agreed period of time. For allowing your funds to be held for an agreed period of time, the bank compensates you with a higher interest rate than current and savings account. Fixed deposit accounts are usually opened for an agreed period like 3 months, 6 months and 12 months etc.
All banks in Nigeria provide personal bank accounts for individuals. Just step into any bank and ask for the process of opening a personal account.
Corporate Bank Accounts
Corporate bank account is a bank account opened for businesses especially limited liability companies. NGOs, sole traders and partnership businesses etc. This bank account is meant for the business of the holder.
To open a corporate bank account with any bank in Nigeria, you need to provide proof of address of the business, proof of identities of the owners or directors of the business, incorporation documents (incorporation certificate, articles of association and memorandum of association etc), passport photographs of owners or directors of the business, company seal and board resolutions.
Most corporate bank accounts are current accounts; however some banks provide corporate savings and deposits accounts.
Benefits of having a bank account
The advantages of having a bank account are:
You will be able to get your wages or salaries paid into a bank account
Bank accounts can help you to develop a savings culture instead of spending all your money as It comes in.
You can be able to safe keep your cash instead of putting it at home.
You will be able to do cashless internet transactions with the use of a debit card provided by your bank
You can earn small income in the form of interest on the funds in your bank account.
Ability to transfer funds in your bank account locally and internationally
Bank accounts can boost your business operations.
Open a bank account today and enjoy the benefits it provides.