A domiciliary account is a current account that allows you to fund it with foreign currencies and enables you to carry out foreign transactions on the account.
A domiciliary account in Nigeria is a type of bank account that allows the holder to deposit and withdraw funds in foreign currencies and these are currencies other than the naira.
Every Nigerian has a right to operate a domiciliary account even while he is in Nigeria and it is recommended for people who do international business or need it for one reason or the other.
A domiciliary account is held locally and is different from a foreign bank account, which is normally held by foreign banks outside the shores of Nigeria.
There are two types of domiciliary account, which a person can operate in Nigeria; they are – Savings domiciliary account and a Current domiciliary account.
A savings domiciliary bank account is a foreign currency account that allows the person to save money in foreign currencies and be able to withdraw it using a bank teller.
A current domiciliary bank account on the other hand is like a current account, and businesses or businesspersons normally use it.
It is a type of account that can do about the same things like a savings account and with the ability to issue cheques to third parties, according to nabanker.com.
A current domiciliary account might attract more fees for usage than a savings domiciliary account.
How do you run your domiciliary account
After getting the domiciliary account number, you can then give it out to the person that will send money for you abroad with some additional details.
If it is a dollar account, the money will be sent in dollars; this means that the person sending you the money must send it in dollars.
Once you receive your alert, you can go to your bank and withdraw the dollars by filling your foreign currencies withdrawal slip.
The same thing applies if the domiciliary account is opened in pounds sterling or euro.
The dollars will be given to you and then you can proceed to change it to your local currency (which is naira in Nigeria) at the Bureau De Change.
The BDC operator is just an office that buys dollars from you and gives you naira in exchange, or they can sell dollars to you and you give them naira in exchange.
What they do is to change whatever currency you need, whether from local currency to foreign or from foreign currency to local.
According to www.jotscroll.com, when you want to send dollars to someone in a different country, all you need to do is to collect the person’s details and then you proceed to the bank with your dollars (or any currency that you are using in your domiciliary account, this could be euros, pound sterling, etc).
At the bank, you will request for a deposit slip; you will fill and then the bank will process it. You can learn how to send or receive money using a domiciliary account in Nigeria.
One of the best ways to save money in a bank without having to let it lose value over the long term is by saving it in a global currency that is reliable.
A domiciliary account offers one the opportunity to do this. With a savings domiciliary bank account for instance, you can save your funds in the United States dollar or pounds without having to bother about the continuing depreciation of the naira, according to nabanker.com.
One of the reasons people lose money in Nigeria is by holding on to the naira. It really makes sense to save money in USD, at least until you need to use the money.
One benefit of having a domiciliary account is that a customer can withdraw from it when he or she is in need to solve some urgent problems. This can be done by converting the foreign currency to naira anytime. Therefore, funds in a domiciliary account are safe from depreciation while also offering a higher value in the long term.
Challenges of running a domiciliary account
As good as a domiciliary account is, there are a few disadvantages. After all, every good thing has its own disadvantages. With domiciliary account, you are restricted to one type of currency per account. One down side of domiciliary account is that if you open a dollar account, it has to remain as that.
When you want to transact in Euros, you have to get another Euro domiciliary account and so on. This makes it challenging and does not allow for easy transaction.
Again, according to jotscroll.com, it is difficult to get referees when opening a domiciliary account. A few current account holders use it for salaries of which the banks do not accept salary accounts.
Almost all the commercial banks in Nigeria offer domiciliary account. These are Guaranty Trust Bank Plc, First Bank of Nigeria Limited, Diamond Bank Plc, United Bank for Africa, Union Bank Plc, Zenith Bank Plc, Fidelity Bank Plc, Skye Bank Plc, Ecobank Nigera and Sterling Banks, among others.
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