Financial transactions are more easily done through a Domiciliary Account. Having a Domiciliary Account in Nigeria is becoming increasingly advantageous, because not only does it make international financial transactions effortless, but it can also give you control over an unstable local currency as you can store value in foreign currency. Whether you’re an Individual earning foreign currency or a business person looking to make International payments, here are some important things to know before you open a personal or business Domiciliary Account.
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What is a Domiciliary Account?
A Domiciliary Account often referred to as a ‘Dom Account’ is a type of bank account that enables you to receive and make payments in foreign currencies such as Dollars, Pounds, Euros, etc. A Domiciliary Account can either be a current or savings account and can be operated while abroad or within the country with debit cards or internet banking.
Advantages of having a Domiciliary Account
There are many benefits to owning a Domiciliary Account. With it, you can;
- Make payments on any online platform
- Receive payments in foreign currency
- Transfer funds abroad, get attractive banking rates,
- Issue cheques to third parties
- Save in foreign currency, and hedge against local currency devaluation. If you do business internationally, a Domiciliary Account can be your one-step tool for carrying out both local and international transactions.
Disadvantages of having a Domiciliary Account
A drawback to owning a Domiciliary Account is the fact that you are restricted to a single foreign currency per Account. This means that if you have a Dollars Dom Account, you can only input and withdraw dollars. This can make your international transactions somewhat limited. However, a solution to this is the fact that it is possible to have different Domiciliary Accounts for different currencies. This indicates that you can have a Domiciliary Account for Dollars, another for Euros, another for Pound Sterling, etc. Domiciliary Accounts have transaction limits pegged on either a daily, weekly, or monthly basis and a minimum operating balance – both of which are determined by bank requirements.
What types of foreign currency can be used in your Domiciliary Account
From US dollars, Euros, and Pounds to Cedis, Renminbis and Yen, basically all kinds of foreign currencies can be used for transactions through a Domiciliary Account. However, as mentioned earlier, a single currency operates per Domiciliary Account.
How to receive money through a Domiciliary Account
It is relatively easy to receive money through a Domiciliary Account. The sender has to transfer funds in the currency in which the account was opened (i.e. you cannot receive Euros in a Dollars Account.) If the money is sent through a wire transfer, it usually takes about three days for you to receive it. You can then proceed to the bank to collect the money (in the currency the account was opened in) through a foreign currency withdrawal slip or Automated Teller Machine.
Steps to Opening a Domiciliary Account with ALAT
You can easily open a Domiciliary Account on your phone with ALAT online – Nigeria’s first, fully digital bank. All the steps you have to take are listed below;
- Download the ALAT app from Google Play Store or App Store and log in to it
- Click on Create Account and select Domiciliary Account
- Follow the prompts. Be ready to input and upload necessary information such as BVN (learn about bvn here), photograph, Signature, Valid ID card, etc.
- Once your Application is successful, your account information will be sent to you.
- For more help, click here or contact firstname.lastname@example.org
To cap it off, it is advisable to fund your Domiciliary Account in dollar denomination. A dollar account is especially functional in Nigeria as the dollar is the most used and traded foreign currency in the Nigerian foreign exchange market.
What other questions do you have concerning opening a Domiciliary Account? Let us know in the comments!