Different Types of Bank Account
The world’s unprecedented scientific and technological advances are increasingly influencing our daily lives. They are also trying to facilitate all the activities on which a person is bound to spend his most precious resource - time. When solving both household and practical tasks, there are often situations when it is necessary to make various money transfers, from paying for parking to receiving government support measures. Quick and efficient solution of such problems can be organized, first of all, due to the availability of various bank accounts, through which the respective bank will be obliged to execute the orders of the account holder to manage the funds on the open bank account. It should be emphasized that the bank may not establish and control the direction of the account holder's use of funds or impose other restrictions not provided for by law or the bank account agreement. In addition, if the bank does credit funds received on the client's account in time or unreasonably withdraws them from the account, as well as fails to fulfill or improperly fulfills the client's instructions to transfer or disburse funds, it shall be obliged to pay interest on this amount in the manner and amount specified by Armenian regulations.
According to the Armenian regulations, the following types of bank accounts are available:
1. Current or bank account: intended for residents and non-residents for various current transactions. In the case of current accounts, the bank generally does not impose a non-disposable balance requirement, and in addition, the account is opened for an indefinite period of time.
2. Savings Account: Savings accounts can only be opened by individuals for effective savings. The peculiarity of this account is that Armenian banks offer the possibility of income up to 5% or more per year, which is calculated based on the daily positive balance in the account. It should be noted that depending on the approach, banks may offer separate types of savings accounts, allowing only certain operations on this account. However, all banks offer the possibility to reduce or increase the account balance at any time.
3. Escrow account: An escrow account is designed to increase the security of transactions for the buyer and seller, regardless of their status as individuals or legal entities. In other words, an amount intended for the purchase of goods, services, movable or immovable property, or a certain part thereof, is deposited into the escrow account as a guarantee of the transaction. The bank shall pay the amount to the party specified in the contract upon submission of documentary evidence of fulfillment of its obligations. If one of the parties fails to fulfill its obligations on time or fulfills them improperly, the funds in the escrow account are returned to the party that made the payment.
4. Impersonalized metal account or non-cash gold metal account: designed for individuals and legal entities. Clients can increase the amount in their account by purchasing non-cash gold from the bank and transferring it to the metal account, or by making a non-cash transfer of gold from their metal account with this or another bank. Withdrawals from the account work by the same logic. It is also worth noting that you can open a metal account only with 999.9 gold samples.
5. Transactions on the account of a minor may be carried out:
by a parent or guardian in accordance with the signing instruction,
a third person opening the account,
a 14- to 18-year-old minor in whose name the account is opened.
6. The account for receiving social benefit payments (social package account) is intended for managing the funds allocated for the persons entitled to social benefit payments defined by the RA Government Decree N1691-N of December 27, 2012.
vacation in RA,
repayment of monthly mortgage loan payment, if the conditions of the mortgage loan correspond to the general conditions of mortgage loans refinanced by "Housing for the Young" CJSC (refinancing credit organization), "National Mortgage Company" CJSC (refinancing credit organization) or Artsakh Investment Fund,
payment of tuition fees,
purchase of the minimum set of additional medical insurance services for the beneficiary,
repayment of the loan granted within the framework of the social package, if the respective product is available in the given bank,
other transactions defined by law.
7. The special social insurance account or pension account is intended for the payment of pensions, child care benefits for children up to 2 years old and other amounts stipulated by the legislation. Unlike other accounts, this account is opened without the presence of the client, based on the data provided by the social security service of the Ministry of Labor and Social Affairs of the Republic of Armenia on a particular individual. Nevertheless, the individual acquires the rights of the account holder and can dispose of the funds transferred to the social insurance account after identification by the bank and signing the agreement on opening a social insurance account with the bank.
8. The special account of the developer is intended for receiving advance payments made by buyers to the developer under the contract for the right to purchase real estate from the building under construction. A separate special account shall be opened for each building under construction. The Bank imposes a ban on all funds received in the special account: they are not available to the developer, except in cases specified in the purchase contract and by law.
9. The POS terminal trust account is used exclusively for maintenance of terminals installed at points of trade and service cooperating with the Bank.
10. Depo account: a special account in which the bank as the client’s depositary organizes registration, recording and storage of securities, as well as the client's rights thereto in special securities deposit accounts opened with the bank.
11. The notary’s deposit account is intended exclusively for operations with funds that are required by law to be deposited with the notary.
Key takeaways
In Armenia, both residents and non-residents can open various bank accounts, with which the respective bank will be obliged to fulfill the orders made by the account holder regarding the management of funds in the opened bank account.
Most Used Currencies in Armenia
In Armenia it is possible to open bank accounts not only in the national currency - AMD, but also in several foreign currencies. The list of possible currencies for account opening depends on the type of bank account. For example:
Current account - AMD, US dollars (USD), Euro, Russian rouble (RUB), British pound (GBP), Japanese yen (JPY), Swiss franc (CHF), Georgian lari (GEL), UAE dirhams (AED), Chinese Yuan (CNY), Belarusian rouble (BYN).
Savings account - AMD, US dollars (USD), Euro, etc.
Escrow account - AMD and other foreign currency acceptable to the bank.
Account for receiving social payments (social package account) - AMD.
Key takeaways
Depending on the type of account, it can be opened in different currencies, including AMD, US dollar, Euro, Russian ruble, British pound, Japanese yen.
Bank Account Opening Procedure
First of all, note that before opening a bank account, each bank presents the current fees, terms and conditions and other details. After agreeing to the terms and conditions for account opening and maintenance, the bank requires the necessary documents to start the account opening process. After verifying the authenticity and reliability of the submitted documents, the bank concludes a “Bank Account Agreement” with the account holder.
Opening bank accounts is simplified, as a bank account can be opened online instead of visiting a bank. This possibility is available in almost all banks in Armenia.
It should also be noted that in a number of banks the account holder of a given bank (i.e. the client) can authorize third parties to partially or fully manage, receive and provide information about his account. The bank accepts only those powers of attorney that clearly and specifically describe the authorized transactions, e.g. withdrawal of money, transfer, receipt of statement, etc.
Of course, the list of documents for opening a bank account depends on the legal status of the person in the country where the account is opened. Bank accounts can generally be opened on behalf of the following persons:
Resident individuals,
Non-resident individuals,
Below we will present a list of documents that are usually required when opening a bank account for each of the above-mentioned entities, regardless of the specifics of the bank’s activity. The bank may request additional documents based on security considerations and requirements of the RA Law “On Combating Money Laundering and Financing of Terrorism”.
Key takeaways
Bank accounts can be opened by resident and non-resident individuals and legal entities, both online and by approaching the bank.
Necessary Documents
Most banks in Armenia require almost the same documents to open a bank account. Of course, as we have already mentioned, the bank has the right to request additional documents if there are relevant grounds. However, in any case, it should be taken into account that the list of documents depends not only on the requirements of the bank, but also on the legal peculiarities of individuals and legal entities, as well as the presence of the resident status in Armenia. Thus:
Residents shall submit the following documents for opening a bank account in Armenia:
1. application for opening an account according to the bank's sample,
2. identity document,
for RA citizens: passport, ID card, military book (for persons performing compulsory military service).
for asylum seekers: ID card of an asylum seeker.
for refugees: refugee identity card or valid refugee travel document issued before 01.07.2016,
3. social service number (social card), or for RA citizens, foreign citizens (who have presented the RA residence permit) and refugees: a certificate of non-receipt of social service number (social card),a power of attorney drawn up in accordance with the RA legislation and the bank’s requirements, if the client’s representative has applied to the bank.
Non-resident individuals shall submit the following documents for opening a bank account in Armenia:
1. application for opening an account according to the bank’s sample,
2. an identity document for foreign citizens: a passport of a foreign state or an internationally recognized identity document, or a special passport of the Republic of Armenia, or a residence certificate. For citizens of the Russian Federation only - an internal passport, if the RA state border was crossed using it.
3. social services number (social card) or a certificate of non-receipt of social service number (social card), for foreign citizens (who have presented the RA residence permit) and refugees,
4. a power of attorney drawn up in accordance with the RA legislation and the bank's requirements if the client's representative has applied to the bank.
It should be noted that the bank can also request a certificate of registration or residence address, which is provided by the RA Migration and Citizenship Service, assigning a social service number to the person. The cost of the service is 1000AMD and takes approximately 15 minutes.
Resident legal entities shall submit the following documents for opening a bank account in Armenia:
1. application for opening an account according to the bank's sample,
2. copy of the charter registered in the State Register (in case of submitting a copy of the Charter, all pages must be sealed and signed by an authorized person),
3. client's registration certificate (copy) in the State Register of Legal Entities of the Republic of Armenia and attachments on the information about the entities’ director and amendments,
4. copy of the license (if available and necessary),
5. information on shareholders and owners, copies of identity documents.
6. other documents and information if necessary.
Documents required to open a bank account in Armenia by a Non-resident legal entity:
1. application for opening an account according to the bank's sample,
2. notarized copy of the charter with apostille,
3. information on the ultimate beneficiaries of the entity,
4. information on connected persons of the entity,
5. notarized copy of the registration certificate with apostille,
6. document containing the tax number,
7. other documents and information if necessary.
If the client is a non-resident, the bank has the right to find out the center of vital or business interests and sources of income.
In addition to the above-mentioned persons, bank accounts may also be opened for minors, state non-commercial organizations, as well as foreign embassies and consulates in Armenia.
Key takeaways
Most of the banks operating in Armenia require almost the same documents to open a bank account, but the bank has the right to request additional documents if there are relevant grounds.
How Much Time Does It Takes?
After the client has submitted the list of required documents, the bank makes a decision to open an account within a maximum of one to three banking days. The bank employee informs the client of the decision within a maximum of one banking day. This term may be extended if necessary. In case of requesting additional documents, it may take up to 90 calendar days to review the documents and, accordingly, to open the account.
In case of a decision on refusal to open an account, the bank shall notify the reasons for the refusal in the manner in which the client applied to the bank within a maximum of one banking day after the decision has been made.
Key takeaways
Bank accounts are generally opened within three business days.
Frequently Asked Questions (FAQs)
Can I open a bank account in Armenia remotely?
Yes, it is possible to open a bank account in Armenia remotely, but only through a limited number of banks. While some banks may approve remote account opening, they may still require you to visit a branch in person to sign the necessary agreements and finalize the process.
How long does it take to open a bank account in Armenia?
The timeline for opening a bank account in Armenia can vary and is currently uncertain due to ongoing changes in bank policies influenced by the geopolitical situation. Banks frequently update their internal procedures, making it difficult to provide a precise timeframe. Additionally, the commission fees for opening accounts are also subject to change based on the bank’s policies.
How much does it cost to open a bank account in Armenia?
The cost of opening a bank account in Armenia can vary due to the ongoing geopolitical situation and changes in bank policies. Generally, fees range from 20,000 AMD to 100,000 AMD per account, but exact charges may differ depending on the bank.
For information about our legal service fees, please contact us directly. Once we understand your specific requirements and conditions, we can provide a customized quote for our legal assistance.