Disadvantages of Domiciliary Account + 3 Better Alternatives

🤲 Share me to your gees na 🥺


This deserves a share, right?


The disadvantages of domiciliary accounts make it difficult for many freelancers and businesses in Nigeria to rely on them. Domiciliary accounts promise the ability to store money in stable foreign currencies. However, the barriers to actually using that money can be significant.

Strict controls and limits on transfers and withdrawals prevent easy access from Nigeria. High fees and commissions charged by banks also cut into account balances, especially when there is low account activity.

Let’s not even talk about the unfavorable exchange rates banks offer when converting back to Naira.

Thankfully, there are better options available that provide greater accessibility, lower costs, and protection from low exchange rate fluctuations.

In this article, we will cover the top disadvantages of domiciliary accounts for Nigerian users and discuss some better alternatives for securely managing funds abroad.

What Is a Domiciliary Account?

A domiciliary account or dom account is a type of bank account where you can send, receive, and transfer money in foreign currencies. The dom account allows you to transact in currencies such as dollars, pounds, euros, and more. 

All you need to know about dom accounts.

You can open a domiciliary account in any Nigerian bank and operate your account anywhere in the world with your MasterCard or Internet banking. With a domiciliary account, you can send money abroad and receive money from other countries.

Types of Domiciliary Accounts

There are two major types of domiciliary accounts, namely:

  1. Current domiciliary account
  2. Savings domiciliary account

Depending on the bank where you opened the account and the prevalent market rates, both accounts are eligible for interest.

Current Domiciliary Account

This type of domiciliary account is similar to the normal current account. The current dom account is suitable for business people who do various transactions with clients abroad. With this account, you can issue cheques to third parties. 

However, this account attracts more transaction charges than the other type.

Savings Domiciliary Account

The savings domiciliary account allows you to save money in foreign currencies such as dollars, pounds, and more. You can withdraw at any time at the bank with a bank teller. The bank pays you in foreign currencies, after which you can change to local currency at the Bureau de Change office.

People are reading: 10 + 1 Best Domiciliary Accounts in Nigeria (With Alternatives)

Disadvantages of Domiciliary Accounts

As advantageous as the dom account is, it has various drawbacks that you need to check out before opening an account.

The disadvantages of the domiciliary account are:

The dom account operates as one currency per account. This means that you can only open one account for one currency at a time. For instance, if you open a dollar domiciliary account, you cannot fund, receive, or send pounds with the same account.

If you deal with different currencies, your bank may advise you to open different dom accounts for each currency you transact with. This may not be convenient.

Domiciliary accounts have high transaction charges. Transaction charges vary from bank to bank. Nonetheless, it is still high. There are charges for every withdrawal, card maintenance fees, and other bank charges.

Nigerian banks do not sell dollars; hence you will need to buy foreign currencies from the parallel market to fund your domiciliary account. The exchange rate for buying foreign currencies from the Bureau de Change office is high. 

To open a domiciliary account in Nigerian banks today, you will need two referees who run current accounts. This may be difficult to find because more people run savings accounts compared to those who run current accounts.

It is required that you are physically present at a bank office to open a domiciliary account. You will also need to fill out their forms and activate the account with some funds. For many banks, you will have to deposit 100 USD, 100 GBP, or 100 EUR, depending on the account you open.

This can be very stressful and time-consuming.

Advantages of Domiciliary Accounts

Opening a domiciliary account holds numerous benefits, as highlighted below:

For business people who deal with international clients, the domiciliary account allows them to make various transactions both locally and internationally.

With domiciliary accounts, you have access to online banking, debit cards, transaction alerts, email notifications, and more.

Domiciliary accounts allow you to receive and send foreign currencies such as dollars, pounds, and euros into your bank account. All you need to do is send your account details to the person abroad, and your account will be credited here in Nigeria and vice versa.

With the current fluctuations in the naira over the dollar, the domiciliary account provides a shield for your funds. Your money saved in dom accounts is free from the instability of the naira because it is in foreign currency.

As with other bank accounts, banks give attractive interest rates on dom accounts.

Further Reading: How to Open a Dollar Account in Nigeria for Freelancers

Better Alternatives to Domiciliary Accounts

Considering all the disadvantages of domiciliary accounts outlined above, wouldn’t you prefer alternatives that are less stressful and more rewarding? I believe your answer is “yes.” Then, let me show you better alternatives where you can fund, send, and receive foreign currencies. 

These alternatives are:

  1. Geegpay
  2. Grey.co
  3. Payday 


geegpay review cover

Geegpay is an online payment platform that allows Nigerians to send and receive money in dollars, pounds, euros, and more from outside the country. To start using Geegpay, you must first download the app, which is available on the Android Play Store and iOS App Store. You can then open a virtual USD, GBP, or EUR account with them without visiting a physical office.

With your Geegpay account, you can fund your foreign account with naira, which will be converted to foreign currency on Geegpay. You can equally withdraw from your foreign account directly to naira with low charges. Geegpay provides a virtual card you can use for online purchases on Amazon and others.


Grey.co runs an online banking system that allows you to convert money from our local currency to foreign currencies. This means that you can convert naira to dollar, pound to dollar, and so on.

The Grey.co app is available on the App Store and Google Play store for download. You can open an international account for free and manage it wherever you are from your phone. Also, the exchange rates on the Grey.co accounts are relatively cheap.


Payday is another great alternative to dom accounts because, with Payday, you can make financial transactions in local and foreign currencies. The Payday app is downloadable on all devices, and opening an account is free.

With the Payday app, you can save, receive, and send money in dollars, pounds, euros, and more with low charges. Payday provides virtual cards for online purchases, which is similar to an ATM card.  


The domiciliary account is similar to a normal naira account, only that it is operated in foreign currencies. Some of the best banks where you can open a dom account are GTB, UBA, FirstBank, FCMB, and Zenith Bank.

Due to the disadvantages associated with domiciliary accounts, I have also shown you better alternatives to save, receive, and send money internationally. Geegpay, Grey.co, and Payday are all virtual international banks that enable you to bank from the comfort of your phone.


How Much Do I Need to Open a Domiciliary Account?

To open a domiciliary account at most banks is free of charge. You will be required to activate your account with some amount, depending on the bank. Most banks receive 100 USD, 100 GBP, or 100 EUR for activation.

What Currency Can I Withdraw From My Domiciliary Account in Nigeria Banks?

This depends on the kind of dom account you opened. You can only withdraw the currency associated with your domiciliary account. If it is a dollar dom account, you can only withdraw dollars, and so on.

What Are Other Alternatives to the Domiciliary Account?

Better alternatives to the domiciliary accounts are the Payday app, Grey.co, and Geegpay. You can download the apps on your phone, register a virtual international account for free, and manage your transactions from your home.

Join Our Tribe of Successful Freelancers and Entrepreneurs Today

Get the latest opportunities and guides to boost your business and freelancing journey.

FREE: Discover the Skills That Will Make You Money in 2024