Is domiciliary account very beneficial?

I have seen people ask if having a domiciliary account is very essential or important in this country, and what’s the purpose of having a domiciliary account.

You see them asking is domiciliary account very beneficial?

Well I’m here to explain all you need to know when it comes to a domiciliary account, and whether it is very important or probably not important.

Let’s proceed.

Is domiciliary account very beneficial?

Yes, a domiciliary account is very beneficial especially if you’re the type that receives money from abroad or make international payments online.

For someone that don’t receive funds or money from abroad, or make online payments, I don’t neccesarily see the need for such person to open a domiciliary account.

Because the account may become dormant and which bank might freeze the account.

But for someone that receives money from abroad, you need to have a domiciliary account due to the exchange rate.

For someone that makes an international payment, I recommend having a domiciliary account in order to get a dollar card.

Now, let me explain the benefits of a domiciliary account.

Benefits of a domiciliary account

Below are the benefits derived from having a domiciliary account;

1. Being able to save money in USD, GBP, and Euro.
2. For easy international payment using a dollar card, Euro card, or GBP card.
3. To receive funds from abroad, and exchange the funds using the black market rate.

You see these three things I mentioned, they are the major reason why people open a domiciliary account in Nigeria today.

I will go ahead and explain them one after the other especially it’s benefit of international payment.

1. Being able to save money in USD, GBP, and Euro

For some account holders, saving money in foreign currencies like USD, GBP and Euro is very important to them compared to having naira in bank account.

The likes of USD has a lot of value compared to the Nigerian naira though of recent days, the Nigeria naira is appreciating but still, USD, GBP and Euro is way higher in terms of the exchange rate.

Some business men and women are fond of this, but the truth is that I don’t really blame them because most goods we use in Nigeria are imported.

They pay in dollars to have the goods delivered to them in Nigeria.

2. For easy international payment using a dollar card, Euro card, or GBP card

I fall into this very category, for easy international payment using a dollar card, Euro card, or GBP card.

For those that frequently make international payments, having a domiciliary account is very important unless you want to depend on virtual cards from all these non bank financial institutions.

Some of them are good I must admit, but I prefer having a domiciliary account along with a dollar card account.

As you all know that few years back maybe around 2019 or so, CBN put a restriction on using the Nigeria naira or the naira debit card for international payment.

Somehow this was crazy then especially those that are fond of buying products from all these online stores like aliexpress, alibaba, and others.

It affected me as well because then, I don’t have a dollar card, so I had to go get one.

Now here’s the thing;

You cannot have a dollar card without first having a domiciliary account.

Yes you heard me.

You must have a domiciliary account, then you can request for a dollar card if you opened a dollar domiciliary account, or GBP card if you opened a pound domiciliary account, or euro card if you opened a euro domiciliary account.

But dollar card is the most popular here, and many international payments are usually in USD.

With a dollar card, paying for school fees, international flights, international hotels are easy as long as you have funds in your domiciliary account, or dollar card account.

Some banks do have a separate account for their dollar card.

Example, Gtbank do have a separate account for their dollar card and which they called it a dollar card account.

If you have an international payment to make, you then transfer money from your domiciliary account to your dollar card account.

But remember, you must open a domiciliary account before you can get a dollar card account.

That’s their rule.

I love how gtbank separated their domiciliary account from their dollar card account.

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3. To receive funds from abroad, and exchange the funds using the black market rate

And this is another important reason why people open a domiciliary account today, to receive funds from abroad, and exchange the funds using the black market rate.

You know you can’t compare the black market rate with the bank rate though in 2024, banks has increased their rates but still not so close to the black market rate.

Previously, if you receive $1000 from abroad into your naira account, the bank will use their rate to exchange the money, and which their rate is relatively low.

For example, $1 for N315, while the black market exchange rate is $1 for N700.

Even till now many banks or almost all banks in Nigeria has an Fx conversion or Fx sales, the black market rare is higher but the margin is no longer big.

For Example, Gtbank Fx sale is $1 for N1500, while the black market rate is $1 For N1575.

Same goes to UBA  Fx sales, their rate is not so different with the black market rate.

The one I’m not happy with is Access bank which their FX rate is very low compared to other banks FX rates. And the margin is big with the black market rate.

So these are the the reasons why people open a domiciliary account in Nigeria today.

If you need to read more on domiciliary account in Nigeria and how it works.

should you open a domiciliary account?

Yes I recommend you to open a domiciliary account today especially for international payments which the naira card cannot be used.

Like I said earlier, if you’re the type that frequently make international payments, or you will be making a lot of international payments, you need to have a domiciliary account and a dollar card.

The Nigeria naira debit card is not an option here so it is a must to have a dollar card or you go for a virtual dollar card. There are companies offering such cards including banks as well.

And this is where I come to the conclusion of today’s question of the day, Is domiciliary account very beneficial in Nigeria. I’m open to your questions and suggestions.