Are you planning to open a current account in any of the Nigerian Banks? Well, that’s quite easy as this article will help you understand the processes involved better. Let’s dig right in.
Opening any account be it Savings or Current (for the purpose of this article, I will be sticking with current account only) requires you getting the right amount of information as much as possible. Information such as
- Which Bank is the right fit for you
- What are the steps you need to go through
- What are the requirements
Banks in Nigeria may have slightly different procedures but most of their requirement pretty much remains the same. Before we move further, let us first understand what a current account is
What is a Current Account?
A current account is a type of account that allows deposits and withdrawals of money without notice. A current account is noticeably different from a savings account in that withdrawals can be made by cheque, which also means, third party withdrawal is possible. It is also different from a savings account in that a fee known as Commission on Turnover (COT) is charged per withdrawal under current account.
This account can be open by an individual doing large scale businesses, by an organization, a company etc. Current Account will typically require a certain amount of money as deposit to create initially. You can however withdraw your money till zero but this is usually also subject to the particular bank your funds are domiciled.
Why a Current Account for your Business
- After having registered your business, getting a business account is the next natural step. A current account helps you easily maintain your revenue and expenditure
- Tax filing: You are able to properly do your tax filling appropriately while avoiding mistakes. Your bank statement gives you a clear idea about this.
- It has a professional, formal look to your business
- Properly ordered Accounts keeping: You honestly don’t want to mix both business and personal transactions. A Business current account helps you guide against this.
- Allows you keep proper records of business expenses
- Manage employee pay packages
- Enables you Budget properly
- Allows you receive and pay out monies at all times
Opening a Business Current Account
To open a Business Current account, see the general requirements below (Please note that certain additional requirement can depend on your preferred bank)
- Board Resolution Document: A board resolution which shows that the company Board of Directors/shareholders met and authorized the opening of the account and approving the account signatories.
- A company seal: Signed documents must have the company seal
- Certified Memorandum and Articles of Association: Articles of Association document is required.
- Completely filled corporate account opening form signed by the company’s designated signatories: Current account opening form must be duly filled and relevant information must be provided when filling the form
- Certified true copies of incorporation documents (Form CO7)
- Residential address of proof of signatories and Directors
- Passport photographs of the signatories: Your photograph is your identity therefore, a person that wants to open a current account in Nigeria, you must have two recently taken passport photographs that will be scanned and uploaded in the bank‘s database.
- Bank Verification Numbers of Directors or Proprietor
- Legitimate means of identification document of the Directors or Proprietors: The valid means of identification in Nigeria are National Identity Card, International Passport and Driver‘s license. Voter‘s card has recently been made to suffice as a valid means of identification that a prospective current account holder can present in a bid to open
current account. Means of identification is needed because it is the only document that proves you are whom you claim to be, as such, it must be photocopied and attached to other document presented to the bank.
- Tax Identification Number (TIN) for the company
- Utility bill of business addresses: Recent utility bill receipts such as NEPA bill, water bill and DStv subscription receipts are needed to open a current account. It acts as a proof that your address exists. Utility bills such as the Power Holding Company of Nigeria (PHCN), water bill, Lagos Waste Management Authority (LAWMA), etc.
- Special Control Unit Against Money Laundering (SCUML) registration where applicable
- Special requirements such as business permit, residence permit, etc. for foreigner nationals
- 2 duly filled reference forms by corporate account holders: Anybody that wants to open a current account must provide two referees to ascertain that the person is who he/she purports to be Execution of Account Opening form. As you may already know, among other requirements for opening a current bank account, you will need to provide two referees (two current account holders that would sign a reference form to recommend your suitability for maintaining a current account). It’s just about the same rule for every bank in Nigeria. You may be or have been lucky to easily get through this phase of getting your current account activated (without your reference cleared, you can pay in cash or check to the account but you can’t withdraw you money), But in some cases, getting the reference cleared can create a burden for the account holder, especially in a matter of urgency.
- Signatures: Signatures of signatories to the account must be provided.
- Opening Balance: There is a minimum opening balance required. It varies from bank to bank
Banks to consider when opening a current Business Account
- Access Bank
- United Bank for Africa (UBA)
- Fidelity Bank
- Guaranty Trust Bank
- First Bank
- Union Bank
- Eco Bank
- First City Monument Bank (FCMB)
- Standard Chartered Bank
- Stanbic IBTC Bank
Let’s examine UBA’s process of opening a Business Current account for example. UBA prides itself as ‘offering various financing products which are suitable for the different needs of corporate businesses’. Their goal is easy; make banking easier by caring for your needs’.
They currently have three types of Business/Corporate Accounts
- Corporate Current Account: Provides businesses with an easy way to administer their cash flows daily where banking transactions can be transacted daily via cheques, cards or other digital banking channels at no extra cost.
- Corporate Domiciliary Account: UBA offers opportunity to operate to accounts denominated in the major international currencies of USD, Euros and the British Pound
- Corporate Fixed Deposit Account: This account offering provides the option of enjoying increased yields on cash for a specified period of time.
Let’s also check out another Bank, Union Bank. Union Bank prides itself on offering solutions that allows businesses benefit from their personalized Business Banking solutions. Their solutions are flexible and offer convenient services with attractive features. They can help you grow your business by providing competitive and innovative products and services that are specially tailored for you.
They currently have various SME accounts. See options below
1. Union Biz Account: An account that provides flexibility for small and medium sized businesses to meet their everyday banking needs by offering zero charge and pays you interest when you maintain an agreed amount in your account.
2. Union Hybrid Account: Offers attractive interest rates for all businesses.
3. Business Accounts: The perfect account tailored for Businesses.
4. Union Domiciliary Account: A foreign account that gives customers the option to bank in any of the three global currencies (US Dollars, British Pounds and the EUROS).
5. Target Savings Product: Short – medium term savings plan for SMEs.
6. Fixed and Tenure Deposit: Focused on helping you save today and reap the benefits tomorrow.
As a prospective customer, it is now up to you to choose one of the banks above, walk in calmly and requesting to open a current account knowing fully well, you now have all the required information at your disposal.