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Local vs. International Banks: Weighing the Pros and Cons for Nigerian Migrant Workers in Canada

Local vs. International Banks: Weighing the Pros and Cons for Nigerian Migrant Workers in Canada

19 Oct 2023


A report by Canada Visa revealed that some 70,000 Nigerians are living in Canada to earn a living. They send money to Nigeria to their families for financial support. The robust Canadian economy easily accommodates job-seeking migrants from Nigeria or any other country, for that matter. It is one of the reasons that in 2022, over 20,000 Nigerians gained permanent Canadian residency.

The Nigerian diaspora population is difficult to estimate, but rough estimates suggest that it is one of the largest African immigrant populations. They make significant financial contributions to the Nigerian economy through inward remittances that amounted to $20.13 billion in 2022, a World Bank report said.

In developed countries, the concept of dealing in cash is on the decline. Therefore, almost all financial transactions take place online and virtually, necessitating the opening and holding of bank accounts.

But do you know what type of bank account you need? And why would you need a bank account in the first place?

In Focus

As a Nigerian migrant, you travel to Canada to earn a living and support your family back home financially. You have to, therefore, have a bank account. If you already have a bank account in your native country in a bank that operates internationally with branches in the country you have gone to, in this case, Canada, then fine.

It will only take a few alterations to move money across borders. It will also make it easy for you to send money online to Nigeria from Canada.

But in this blog, the focus is on the right bank account type for you, given the several bank account types and whether an international bank account is suitable or a local one. Also, if sending money back home through a bank account is a good idea in the first place, alternatives should be found.

What is the Need?

Working in Canada or any other developed country requires you to have a bank account to process money and manage financials easily. If you look closely, you will realize that having a bank account in your native country will help you serve the following few purposes easily.

  • Financial management
  • Safekeeping
  • Money transfers
  • Online shopping
  • Allowing quick access to money without having cash in hands

But the question is, which bank account type is suitable for you? And whether an account in a local bank or an international bank will serve you best?

Let’s see what different bank account types you can have and which one is suitable for you.

Types of Bank Accounts – The Basics

When you go to any bank to open an account, you will have a huge variety to choose from. But once you know the basic account types, it becomes easy for you to decide which one to open.

But before knowing about different bank account types, remember that a bank may not be the best option to send money to Nigeria from Canada. And the reasons rendering banks unfit for this purpose are many. We will glance over those reasons briefly.

But first, look at the following few basic bank account types you should know about.

Checking Account

A checking account keeps your money safe and allows easy access to cash for your daily transactions and financial needs. This account typically comes with a debit card and a cheque book.

Savings Account

This account type allows you to save money and earn an interest amount on top of the principal amount you have deposited. Interest rates can compound weekly, monthly, or annually.

Certificate of Deposit (CD)

In this account type, you deposit your funds for a fixed time at a pre-determined interest rate. The time can range from a few months to a few years.

Money Market Account

These accounts are similar to savings accounts, but the one condition to avoid paying monthly service charges is to keep and maintain a higher balance in them.

Before proceeding, take a look here to see whether you still need bank accounts as an expatriate worker or not.

Let’s now see some of the international bank account types.

International Bank Account Types – The Basics

Following are a few types of international bank accounts.

Demand Deposit Accounts

This international bank account functions almost the same as a local savings account, but the only difference is that in this account, you will not have to pay a high fee for sudden cash withdrawals.

Term Deposit Accounts

An international term deposit account also runs the same way as a local one. But the difference is that you will get a higher interest rate in an international bank.

International Lines of Credit

International banks offer these to you also, and you can use this credit line as an individual at will and up to a certain limit. Paying the loan back depends on your and the bank’s mutual understanding.

International Investment Accounts

These international accounts help you invest money in opportunities appearing all over the world. You cannot make overseas investments through a domestic investment account.

These are some of the international bank accounts that you can open to fulfill your needs.

Are Banks Suitable for Me as a Nigerian Migrant in Canada?

Yes. They are. But only for managing your financial needs and managing money. If you think banks can offer you the best way to send money to Nigeria, then you are gravely mistaken because:

 

  • Banks charge a high fee on your online money transfers
  • They charge you extra on every currency conversion each time you transfer funds
  • Banks take between 3 to 5 business days to deliver funds
  • Banks offer static and uncompetitive currency exchange rates
  • They require immense paperwork, commuting hazards, and costs
  • The services of banks are not available 24/7

The Way Out

The best alternative is to find a reputable remittance transfer service provider company, plenty of which, including ACE Money Transfer, you can find easily. These service providers specialize in remittance transfers and, therefore, offer you the best deals on your money transfers.

Because ultimately, you work abroad to earn a living and support those dependent on you financially. Right? You, therefore, naturally wish to save and send more to them – a purpose best served by specialized service providers.

Wrapping Up the Discussion

Even though many people transfer funds through banks, this institution is not fit for this on account of the above-mentioned reasons. On the other hand, if you choose ACE Money Transfer to send money online to Nigeria, you will get live and market-competitive currency exchange rates, speed, safety, 24/7 service access and availability in over 100 countries worldwide, and much more from just one window in exchange for a low fee.

FAQs:

Is it essential to open a bank account abroad?

Yes. It is essential to open a bank account in a foreign land because, in most developed countries, financial matters take place virtually instead of through hard cash.

What basic purposes does a bank account serve?

Some of the basic purposes a bank serves include safekeeping, better management of your finances, paying bills, online shopping, and quick access to your funds and cross-border money transfers.

What are the types of local bank accounts?

Local bank account types include Checking Accounts, Savings Accounts, Certificates of Deposit (CD), Money Market Accounts, and Individual Retirement Accounts (IRA).

What are the types of international bank accounts?

International bank account types include Basic Savings Accounts, Checking Accounts, Demand Deposit Accounts, Term Deposit Accounts, International Lines of Credit, Real Estate Accounts, International Investment Accounts, and International Trust Fund Accounts.

Are banks fit for international money transfers?

No. Banks are not fit for international money transfers because a) they charge a high fee, b) they charge extra on currency conversions, c) they offer static and uncompetitive exchange rates, d) they take days to deliver funds, e) they require immense paperwork and commuting hazards and f) their services are not available 24/7 like remittance transfer service provider companies.

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