If you are expecting N5,000,000 loan or more, you may have to upgrade your account to corporate (current or business account) or even start the application afresh.
It is advised you take action before the disbursement of the AGSMEIS loan you applied for begins.
The great news is that you can get as much as N10,000,000 loan if you are successful in one of the Anchors Borrowers Programme of the Central Bank of Nigeria.
You might want to ask: Why do I need to open a corporate bank account for my business? Do I need a corporate account to receive a government loan?
In this guide, we’ll also tell you the requirements to set up a current account for your business in case you emerge as one of the beneficiaries of the bigger loan
Shall we get started?
So, let’s start off from the second question:
Do I need a corporate bank account for a government loan?
You do not need a business account to receive government loan or any of the COVID-19 loans of the CBN.
But on two conditions….
- If the loan isn’t above N5,000,000
- If your savings account can take more than the amount you are expecting.
The above questions bring us to the maximum deposit of savings account in Nigeria.
The deposit amount varies from bank to bank. While bank like GTB says your savings can take as much as N5million or more, any deposit more than N2million on your Polaris Savings will bounce back.
Maximum Deposit in Nigerian Savings Accounts
|Savings Accounts In Nigerian Banks||Maximum Deposit (N)|
|Fidelity Bank Plc||4,000,000|
|GT Bank||5,000,000 (GTB says one can have as much as one wants in his savings account)|
|Unity Bank Plc||2,000,000|
|Titan Trust Bank||2,000,000|
|SunTrust Bank Nigeria LTD||2,000,000|
|Globus Bank Limited||2,000,000|
|Heritage Banking Company||2,000,000|
|First bank of Nigeria||5,000,000|
|Standard Chartered Bank Nigeria||500,000 (Upgrade to account to get higher deposit)|
|United Bank for Africa (UBA)||5,000,000|
From the above table, you can decide if the savings account would cater for your business or loan needs
So, it’s very important to know the core differences between corporate and savings accounts.
Corporate or Current Bank Account
In Nigeria, a corporate account is also known as a business account. It is designed to take large sums. It can also be called current account.
This is the account that businesses use to hold a large sum of money. Mostly, they are used for investing, saving or everyday banking.
If you are managing a promising venture, then you need to open a corporate account. Apart from the fact that it can take large sums of money, it also means your money will be working for you.
You will be transacting business in the name of your company. But there are “buts” of operating a corporate account.
Savings bank Account
A savings account is a non-business account though it can be used for business transactions with limitations.
It is a basic type of bank account that allows individuals to deposit money, keep it safe, and withdraw funds. Some savings accounts in Nigeria allow you to earn 4% interest or more per annum while some of them give 1% or lesser interest (check how to calculate interest rate HERE).
So, how does Current Account differ from a Savings Account? How would you know the best account for your business?
Difference between Corporate Account Account and Saving Account
Let’s quickly use the following factors to differentiate between these two accounts:
- Minimum balance
A savings account allows limited transactions, but the Current Account is not.
A savings account is most suitable for people who operate an account for personal use rather than large scale business, whereas corporate accounts work best for entrepreneurs who need to access their accounts frequently for business transactions.
Most times, a Current Account is a no interest-bearing deposit account, depending on your bank, you can make your money work for you in some current account (terms and conditions apply).
As pointed out earlier, you can earn as much as interest at the rate of 4% in some savings account in Nigeria (terms and conditions also apply).
The minimum balance required to maintain a savings account is usually low or zero. Most of the Nigerian banks you need N0 as a maintenance fee, but for a Current Account, you need N5,000 or more, from there monthly charges are deducted from your account.
You need to ask yourself: How much am I making as profit per month to be paying N1,000 or more charges on current account?
On current or business bank account, you can enjoy overdraft. That’s you can withdraw more money from the account than is actually there (you must apply for this benefit from your bank).
But savings account doesn’t have this benefit. No overdraft facilities in savings.
Requirements for a Current Account
To set up a corporate account in Nigeria, here are the required documents
- Certificate of Incorporation (CAC)
- Valid IDs of Directors (photocopies)
- Passport photo of each signatory
- Tax Identification Number (TIN) (See how to get TIN in this article)
Some banks require a certain amount to verify your CAC documents
With the above documents, work straight into your bank, go to customer support unit and request for current account opening form.
- A current account isn’t suitable for everyone, you need to know why you need it
- An N2million loan or lesser doesn’t need a corporate account.
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