In this article, I’ve provided you with answers to How to start saving your Naira in dollars & Foreign currencies (convert your naira to dollars) which is exactly what I brought you here. This article will also show you some of the Advantages of saving Naira in dollars and likewise the disadvantages.
However, before going directly into “how to start saving your Naira in dollars & foreign currencies ) convert your naira to dollars) let’s see the advantages and disadvantages of soon that.
Benefits Of Saving Your Naira In Dollars
There are several benefits applied to saving Naira in dollars, some of the disadvantages have been shared with you below:
Protection Against Currency Devaluation
The Nigerian Naira is a volatile currency as you already know and its value can fluctuate rapidly.
Therefore, by saving your naira in dollars, you protect your savings against the risk of currency devaluation.
Access To International Markets
Access to international markets is yet another benefit you’d enjoy converting your naira to dollars because saving in dollars absolutely gives you access to international markets, where you can invest your funds in a wider range of assets and diversify your investment portfolio.
If you plan to travel abroad especially the USA, having a savings account in dollars will make it easier to access your funds in the local currency and avoid high exchange fees.
Ease of international transactions
If you conduct business with international partners, saving in dollars will make it easier to carry out transactions and avoid currency conversion fees.
Higher Interest Rates
This is the most important benefits people enjoy the most. Saving in dollars usually offers higher interest rates compared to savings in Naira. This can help to grow your savings faster.
Disadvantages of saving Naira in dollars
While there are several benefits to saving Naira in dollars, there are also some disadvantages to consider when saving your Naira in dollars. Some of them are:
Exchange rate risk
Exchange rates can be volatile, and the value of the Naira relative to the dollar can fluctuate rapidly.
This means that the value of your savings can also fluctuate, and you may lose money if the exchange rate moves against you.
When you convert Naira to dollars, you will be charged transaction fees by your bank or foreign exchange dealer.
These fees can add up over time and are likely to reduce the overall return on your savings.
While saving in dollars can provide access to international markets, it can also limit your access to your funds.
If you need to withdraw your funds in Naira, you may need to go through the process of converting your dollars back to Naira, which can be time-consuming and costly.
Limited Earning Potential
While saving in dollars tends to offer higher interest rates in some cases, the whole earning potential of dollars may be lower than that of other investment opportunities.
For example, investing in Nigerian stocks or bonds may offer higher returns than savings accounts in dollars.
How Savings Naira in Dollars works
You can’t proceed to read how to start saving your Naira in dollars & Foreign currencies (convert your naira to dollars) without knowing exactly how it works.
Saving Naira in dollars works by converting your Naira currency into US dollars and then depositing the dollars into a savings account.
This process is usually carried out through a bank or a foreign exchange dealer.
For you to save Naira in dollars, you will need to have a domiciliary account with a bank e.g Access Bank that offers foreign currency accounts.
Once you have a domiciliary account, you can then instruct your bank to convert your Naira to US dollars at the prevailing exchange rate.
You will then be able to deposit the US dollars into your domiciliary account.
Once your funds are in your domiciliary account, you can access them in US dollars.
You can make transactions in US dollars, such as buying goods or services overseas or transferring funds to other countries.
How To Start Saving Your Naira In Dollars & Foreign Currencies (Convert Your Naira To Dollars)
This is exactly where we’re going “how to start saving your Naira in dollars & Foreign currencies (convert your naira to dollars)”.
Take Note Of This Clearly: The steps below are not meant for only saving Naira in dollars, the process can be used for saving other currencies e.g Yuan, Cedis, etc, naira to dollars are used for a prior example.
There are a few steps you can take to start saving your Naira in dollars and other foreign currencies, the processes are the following:
1. Open A Domiciliary Account
For those who don’t know what a domiciliary account is, below is the meaning:
A domiciliary account is a type of bank account that allows you to save and transact in foreign currencies.
You can open a domiciliary account with your bank, and it will enable you to receive and transfer funds in dollars and other currencies.
2. Find A Reliable Foreign Exchange Dealer
The second step on how to start saving your Naira in dollars & Foreign currencies (convert your naira to dollars)” is to find a reliable foreign exchange dealer.
You need to look for a reputable foreign exchange dealer who can assist you in converting your Naira to dollars or other foreign currencies.
Also, you must be sure to research and compare rates before selecting a dealer.
3. Decide How Much You Want To Convert To Dollars
Determine the amount of Naira you want to convert to dollars or other foreign currencies.
Consider how much you can afford to save each month and how much you need to cover your daily expenses.
4. Monitor Exchange Rates
It is not just necessary but important to keep an eye on the exchange rates for the currency you want to convert to and from.
This will help you to get the best rate and avoid unfavorable fluctuations in the exchange rate.
5. Transfer funds
The next step to take once you’ve identified a reliable foreign exchange dealer and decided on the amount you want to convert is to transfer the funds from your Naira account to your domiciliary account.
You can then instruct the dealer to exchange the funds for dollars or any other foreign currency of your choice.
Please remember to keep track of your transactions and monitor exchange rates regularly to optimize your savings.
6. Recieve Dollar or Foreign Currency in your Domiciliary Account
Once you have transferred the naira to your foreign exchanger, he will send you dollars or foreign currency of your choice to your designated domiciliary bank account. You might as well opt for cash and keep it at home or deposit the cash yourself in the bank.
Best Apps to Save Your Money in Dollars
Here are some of the best apps to save your money in dollars:
Piggyvest is a popular Nigerian online investing and savings platform. It offers a variety of savings plans, including a dollar-saving plan that earns up to 7% interest annually.
Cowrywise is another popular Nigerian online savings platform. It offers a variety of savings plans, including a dollar-saving plan that earns up to 6% interest annually.
Bundle is a mobile money platform that offers a variety of features, including a dollar-saving plan that earns up to 5% interest annually.
Muna is a mobile money platform that offers a variety of features, including a dollar-saving plan that earns up to 4% interest annually.
Pillow Fund is a new dollar-saving app that offers up to 14% interest annually.
What To Consider When Choosing an App to Save your Money in Dollars
When choosing an app to save your money in dollars, it is important to consider the following factors:
- Interest rate: The interest rate is the most important factor to consider when choosing a savings app. You want to choose an app that offers a high-interest rate so that your money can grow faster.
- Features: Some savings apps offer more features than others. For example, some apps offer the ability to set savings goals, while others offer the ability to invest your money.
- Security: Security is also an important factor to consider when choosing a savings app. Make sure that the app you choose has strong security features to protect your money.
Frequently Asked Questions How To Start Saving Your Naira In Dollars & Foreign Currencies (Convert Your Naira To Dollars)
Below are the related questions to How to start saving your Naira in dollars & Foreign currencies (convert your naira to dollars) that I’ve provided answers to:
What is the best way to convert Naira to dollars?
The best way to convert Naira to dollars is through a reputable bank or foreign exchange dealer.
It is important to compare exchange rates and fees to ensure you are getting the best deal.
How much can I save in dollars?
The amount you can save in dollars depends on your personal financial situation and goals but it is important to create a budget and set savings goals to determine how much you can afford to save.
Can I access my dollars savings account from anywhere in the world?
Yes, that is why I mentioned earlier that it’s not limited to naira alone, it includes every currency.
You can access your dollars savings account from anywhere in the world, as long as you have internet access and the necessary login credentials for your account.
Is it legal to save Naira in dollars?
Yes, it is legal to save Naira in dollars as long as you comply with foreign exchange regulations and the terms of your bank account.