How / Ways Nigerians can save in dollars: Saving long-term goal funds in a very unstable currency like the once served in third-world countries like Nigeria has to be one of the most dangerous financial practices.
The negative effect of saving in an unstable currency like the Nigerian Naira boils down to losing your money’s worth.
According to exchangerates.co.uk, as of the 28th of January 2015, the exchange rate was about ₦191 Naira to $1, but as of the time this article was written which was on the 29th of July 2021, the exchanged rate dipped to ₦411 Naira to a $1. The latter data was provided by Google Finance.
Lexicop blog which you are currently reading is hosted by a foreign host provider that charges in dollars, which means we will be needing more naira to pay for the dollar charged fee, each time the naira dips against the dollar. This scenario holds for a lot of industries.
If the exchange rate as of January 28th, 2015 was ₦191 to $1 and we were are being charged $200 per year, it means we would have to pay 200 x ₦191 which equals 38,200 Naira. Fast forward to the current rate, we would be paying $200 x ₦411 which equals ₦82,200.
However, if we at Lexicop blog kept the habit of saving in dollars, we won’t actually feel the dip in Naira. Which is the whole essence of this article.
Escaping The Effect Of Naira Devaluation With Platforms That Allow Nigerians Save in Dollar
Thanks to innovation born out of thoughtful thinking, Nigerians do not have to stick to Naira, as there are legally supported platforms. The foremost of them all is the domiciliary account offered by different banks.
So basically all it takes for you to save money in dollars will be to patronize any of the platforms. The best practice is for you to only withdraw these funds to Naira, when you need raw cash for a purchase.
Some of the platforms Nigerians can use to save their funds in dollars includes:
- Domiciliary accounts
Some of The Ways Nigerians Can Save In Dollars Include:
The fun thing about a large majority of the platforms that will be listed below is that they are far from being complex to use. Below are the platforms that allow Nigerians to save in Dollars:
1. Saving in Dollars Using Docimilary accounts offered by commercial banks:
Basically, every commercial bank offers a domiciliary account that allows its customers to store foreign currencies while still in Nigeria.
With this domiciliary provision in place, you can have your savings in dollars, have your foreign employer pay you directly in dollars. What’s more, you are also at liberty to withdraw your dollars in cash.
From the best of my knowledge, most if not all commercial banks, the requirements needed to open a domiciliary account in a commercial bank in Nigeria include:
- A valid ID (Drivers Licence, International passport e.t.c)
- Two guarantors that are current account holders from any bank
- and more
Please contact your bank for more information.
2. Leave uninvested cash in investment platforms like Bamboo
Sometime back, I sent a DM to Bamboo’s official account inquiring if I could protect my funds against devaluation, by leaving uninvested cash in my Bamboo wallet and the answer was affirmative. I was also told the uninvested cash will attract 0.05% interest per annum.
In order to save your money in dollars via the Platform, you are required to fund your bamboo wallet with Naira, leave it uninvested. Funds kept in dollars will retain a near value in the event that Naira dips.
Please contact Bamboo customer care for more information.
3. Saving in Dollars Using Via Piggyvest
It so happens that Piggyvest which is one of the foremost saving platforms in Nigeria, allows Nigerians have stored their money in not just naira but also dollars.
The process is pretty seamless. All you need do is:
- Register on the platform
- Fund your stash
- Transfer funds from your stash to the dollar platform
Please contact Piggyvest customer care for more information.
4. Utilizing The Dollar Mutual Funds Investment Offered on Cowrywise
The dollar mutual funds offered on Cowrywise which is also another savings platform are different from just mere holding your cash in dollars, as it’s actually investing in an entity.
The value of the units of the mutual funds you purchased can increase or decrease, like the value of stocks or crypto, so it isn’t exactly risk-free, but it does shield your funds against Naira devaluation.
What’s more, mutual fund investors will also get some sort of dividend quarterly and will also enjoy profits when the value of the unit goes up.
Please contact Cowrywise customer care for more information.
Now that you have learned how / ways Nigerians can save in Dollars to escape Naira devaluation. You are advised to make that move now. Begin with the little long-term cash you have and consciously build your worth in dollars.
What’s more, if you do have questions, do well to contact the customer care at the various institutions discussed.