When I started working as a new hire, one of the things shoved down my long throat was my salary account, which was a current account. I didn’t know my left from my right as the account was free to use so all the complaints of charges that customers were screaming about were like cold water pouring off the back of a randy drake.
I wasn’t alone; as having a current account is a right of passage for anyone starting work at structured (more formal) organizations. You go through finding references, and they dashed you a chequebook, with which you can always make withdrawals of the pittance you are paid.
But as banking evolved in Nigeria and everyone got on the electronic channels, things changed dramatically to a point where it is now gross foolishness to keep your current account.
Going back to what bank account products were meant to be, current accounts, called checking account in the US, are designed to be used for everyday transactions, allow you to give cheques to friends, billers, and loan sharks, to draw money from your accounts, etc. Because of this, the stringent requirements needed to have a current account include getting two other current account holders to provide references for you; a letter from your employer to show that you earn something, no matter how little. For these services, Nigerian banks charge a commission on turnover (N5 per N1,000), which recently transformed itself into an account maintenance charge (N1 per N1,000). Outside Nigeria, banks charge a flat monthly fee to run your current account which could be waived if you maintain a minimum amount.
Savings accounts, on the other hand, were designed for savings. You need minimal documentation for this (identification), and you earn interests on whatever amount you leave hanging around each month. However, if you withdraw from it too often, you don’t get to receive any interest.
Nigerian banks being alaseju, are very good at collecting their charges. In fairness to banks, these charges are fair, but because banks do a poor job of communicating with customers, the charges look spurious and annoying.
Throw in the trouble of getting two random uncles to be your reference, inability to put together all the documents the banks want, and the annoyance of seeing your money disappear month after month, Nigerians made a nice detour from current accounts. The numbers speak loudly: of the 111M accounts, 24M are current while 83M are savings account.
The savings account has been so bastardized but is now serendipitously solving the problems of everyday Nigeria. You don’t need to wonder while wandering to know that current accounts’ usefulness has gone with the winds. A regular savings account come with a card for ATM, POS, and web transactions. Savings accounts are also strapped with mobile, internet, and USSD banking, you can do interbank transfers, pay your bills, and buy airtime.
So, what do you lose? You can’t give cheques, but nobody gives two flying horse legs about cheques anymore. In fact, the CBN itself has waged war against cheques up to a level that its use is restricted to those with antediluvian attitude and my friends who borrow money from consumer credit companies (you know yourselves!). You also can’t walk into LG and Samsung to take on new TVs hoping to pay small small. For that inconvenience, you are free from many charges including but not limited to a 0.1% account maintenance fee, search fee, stamp duty fee of N50 for every deposit over N1,000.
So for all these pain of current accounts, only a masochist would enjoy having one. And the three reasons? Read from the top again :-).