12 Key Requirements To Open Current Account For Your Business In Nigeria

When starting off a business, one of the things you will need is a business account which is also known as a corporate account. Apart from the fact that it allows you to manage a large sum of money, it also shows the seriousness of your business to a customer.

Required Documents for Current Account In Nigeria

For those who applied for a government loan, you will need a business account or you upgrade the savings account.

For instance, if you are expecting a N5,000,000 loan or more, you may have to upgrade your account. It is advised you take action before the disbursement of the AGSMEIS loan you applied for begins.

You might want to ask: Why do I need to open a corporate bank account for my business?

Note that requirements and procedures for opening a corporate account vary from bank to bank:

• Affix Company Seal
• Valid means of Identification
• Memorandum and Articles of Association (MEMAT)
• Board Resolution from Board of Directors
• Certified True copy of form CO7 (Particulars of Directors)
• Proof of Residential Address of Signatories to the account and Directors of the company
• Passports Photograph of the signatories to the account
• Bank Verification Number of Directors or Proprietors
• Tax Identification Number (TIN)
• Utility Bill
• Corporate Account Opening Form which must be signed by the company’s designated signatories with all required documents attached on the form
• Residential permit (If the business is being established by foreign Nationals)

International Passport, Driver’s License, National Identity Card or Voters card) of Directors/Proprietors can be accepted as means of identity.

With the above documents, work straight into your bank, go to the customer support unit and request for current account opening form.

Do I need a current bank account for a government loan?

You do not need a business account to receive a 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

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.

Current or Savings 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 a 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.

So, how does a Current Account differ from a Savings Account? How would you know the best account for your business?

Difference between Current and Saving Accounts

Let’s quickly use the following factors to differentiate between these two accounts:

1. Capacity
2. Suitability
3. Interest
4. Overdraft
5. Minimum balance

Capacity:

A savings account allows limited transactions, but the Current Account is not.

Suitability

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.

Interest

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).

Minimum balance

The minimum balance required to maintain a savings account is usually low or zero. In 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?

Overdraft

On a 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.

That said.

Takeaways:

• 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.