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5 Things Every Small Business Owner Must Know About Current Account Maintenance

Businessmen that do a greater volume of regular transactions with the bank open current bank accounts. This transactions includes deposits, withdrawals, and counter transactions. This is also known as a demand deposit account.

Both cooperative banks and commercial banks allow current account opening. You can deposit or withdraw any  amount  from an existing account without prior notice. It is also appropriate for using checks to pay creditors. Customers’ reviews for collection may be placed in this account.

Meanwhile, there is a possibility of nobody taking you seriously if you are an entrepreneur in Nigeria without a current account. You can tell you’re ready to do business if you have an operational or active current or business account.

In Nigeria, a current or business version is almost a necessity for every firm or person who is involved in commerce. It would pay to have an existing account to demonstrate creditworthiness. This is so that all company transactions will be more easily completed with a recent version.

A current account makes it easier to conduct financial transactions and removes any unusual or existing restrictions between users of savings accounts. Customers can operate current accounts at Nigeria’s traditional banks, including a few online ones.

Why Must Entrepreneurs Have A Current Account?

A current account is crucial for any business to manage its daily transactions with simplicity. The daily transaction limit for the current version is unlimited, and it also offers free electronic transactions, internet banking, and other advantages.

1. Unlimited Number Of Transactions

MSMEs or SMEs deal with various transactions and money transfers daily. This is made simple by current accounts, which have no limits on the number of withdrawals and transactions to ensure that your company’s daily activities go without a hitch.

With all-in-one banking apps, internet banking, credit/debit cards, and chequebooks, you can use payment and money transfer methods, which are available to you 24/7, everywhere.

2. Overdraft Facility

The overdraft feature of current accounts allows you to spend more money than is in your account up to a predetermined limit. This makes it possible for companies to handle short-term cash flow inconsistencies in their operations successfully. Even if your payments are late, it enables you to pay for those monthly expenses like salaries, bills, accounts payables, etc.

3. Bulk Payment Transactions And Foreign Transactions

Many current accounts also offer the ability to make payments in bulk, such as paying salaries and sending money abroad to expand your export business. This is not only efficient and cost-effective, but it can also make it simpler for you to grow your business overseas without having to worry about currency exchange. If you want to know if your current account has these features, ask your banking partner.

Meanwhile, entrepreneurs who used current accounts for their MSMEs and SMEs in the 1990s until late 2015 were required to pay returns on those accounts, known as Commission on Turnover (CoT).

As of April 2013, the Central Bank of Nigeria’s (CBN Revised) Guide to Bank Charges was in effect, and it replaced CoT with Account Maintenance Charges (AMC) or Account Maintenance Fees.

However, the Central Bank of Nigeria, the Nigerian apex bank, released a new guide called Current Account Maintenance Fee (CAMF) to further improve banking conditions for company owners. CAMF will be reviewed “to reflect changes in the business climate.”

Many MSMEs and SMEs owners close current accounts before what some described as “unbearable charges.” However, some complaint about fees after opening such accounts for their enterprises.

In this light, you can find everything you need to know about account maintenance fees in Nigeria in this post.

Things Entrepreneurs Must Know About Current Account Maintenance

1. Negotiable Fees

As an MSMEs or SMEs owner, having a current account comes with account maintenance fees that are negotiable and vary with the bank. In this instance, it is your volition to decide how much you wish to pay the bank to keep your current account active.

However, if a bank declines your request, another bank might shift ground to offer you a reasonable account maintenance fee, which will be a win-win situation for both parties. You also have the choice of putting the monthly turnover of banks on your account on a scale of preference to weigh your best chance with the benefit your account will experience with two or more banks of choice. It would help if you considered your monthly profit to avoid letting any bank tie you to excessive fees.

2. Credit Transactions Are Not Affected

Your account won’t be charged if you keep increasing your balance by making deposits because the current Account maintenance fee is based on the total number of debit transactions or withdrawals made from your account over a specified period.

Also, your account won’t be impacted if there isn’t an electronic, instant, online, or physical withdrawal using checks. For instance, Stanbic IBTC offers free account maintenance if you maintain a minimum balance of N50,000 and limit your branch withdrawals to no more than four times per month.

3. VAT Is Paid On the Current Account Maintenance

Value Added Tax (VAT) is a type of tax or levy levied by the government of Nigeria on the acquisition and use of products and services in Nigeria. In Nigeria, the current VAT rate is 7.5% of the entire cost of the products or services purchased.

However,10% of the amount charged as CAMF and sent to the federation account was paid in VAT on the current account maintenance fee.

For instance, when an entrepreneur makes a cumulative withdrawal of 100,000 NGN in a month, the current account will also be debited with a 10,000 NGN VAT sent to the federal government account.

4. Maintenance Fee Is Not Applicable To Savings Account

In Nigeria, not all SMEs have current accounts, particularly those whose monthly business transactions are less than N500,000.

You must know that CAMF is only charged on current accounts; savings accounts are unaffected. It should, however, be noted that some banking institutions secretly put a charge on savings accounts under the disguise of a card maintenance fee or cunning description. This is done once a month.

5. Current Account Maintenance Is Exclusive On Customer-Induced Transactions

One of the characteristics of a corporate account is transactions that customers cause. They are activities taken by the account holder on their performance.

The following fall under this category: cash outs, data purchases, transfers, direct debit orders, airtime purchases, and bill payments. The current account maintenance charge does not apply to some transactions, such as loan repayment.


The current account is the way for any entrepreneur who wants to run MSMEs or SMEs because it stamps a financial authority for the business. However, it is important to understand the current account procedural pattern of maintenance of banks before being their customer.






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