5 POINTERS TO HELP YOU CHOOSE YOUR CHIT FUNDS WISELY

November 25, 2023November 25, 2023 Anuradha C Chit funds

You’ve evaluated several financial investment options and have zeroed-in on chit funds as an attractive choice? That’s a good decision and you’ve already taken the first step in the right direction. Now, we’ll help you make an informed choice about the right chit fund scheme to choose, for your particular needs. We’ve answered below, some of the most frequently asked questions from investors before they make a chit fund investment.

What differentiates chit funds from other financial instruments?

There are numerous financial instruments out there, vying for your attention – marketing their schemes, attractive rates of interest, repayment plans, investment returns and what not. An average citizen approaches the money markets for 2 main purposes – (1) To invest and grow his surplus money (2) To borrow money for his expenses. But for a depositor or borrower with limited knowledge of the financial world, the various options of financial instruments available to him can be confusing, misleading. Due to a lack of informed decision making, people land up making losses, getting into deep debt or losing money to frauds.

However, Chit Funds are a unique form of managing your money. Since they serve as both a saving and borrowing instrument, they come with the twin advantages of good returns and easy liquidity. Chit funds are steadily gaining acceptance, especially among the new age investors and self-run businesses, apart from the traditional investor base of homemakers and rural folk.

All Registered Chit funds are known to earn about 8 – 9% returns year on year, as per industry statistics. Chits also score high on hassle-free joining formalities and ease of operation. They are your neighbourhood financiers with whom you will have a personal connection, especially in remote, rural areas where banking penetration is poor.

How to verify whether the chit fund is safe?

A major black mark against chit funds is the frauds and scams that get regularly reported, denting their reliability. When gullible investors opt for fund companies that are not government registered, they are taking on a mighty risk. The simple way to overcome this risk is to choose only government registered chit funds. With registered chit fund companies, your money is as secure as in a bank.

With the newly enacted Chit Fund Amendment Act by the Government of India, a major positive image make-over is expected in the chit fund industry. The fraudulent, Ponzi companies would be weeded out. The established reliable ones will get much-deserved credibility and government recognition. This will go a long way in reassuring customers. It is predicted that chit funds are likely to hold about 15-20% of the savings in India in the next 10 years.

How to choose the right chit fund company?

The first criteria is to check whether they are registered with the respective State Government. It is recommended to pick a fund company operating in your own state, for ease of operation. Then look for the reputation of the fund company, how long have they been in operation, how big is their subscriber base, how many repeat customers do they have. These are all pointers towards the reliability of the chit company. Consult some existing subscribers and take their feedback before enrolling yourself.

In order to safeguard the interests of all stakeholders, chit fund companies thoroughly verify the credentials of an investor before taking them on board. That’s because only when every subscriber makes prompt monthly payments without defaulting, the chit fund company can ensure smooth rotation of the prize money throughout its tenure of 2-3 years.

So pick a chit fund company that works with a personalized approach, maintains 1-1 relationships with each of its subscribers. This factor also helps in times of emergencies.

For instance, Shanthala Chits has long been a pioneer in the chit fund business. We are a Government approved chit fund company with a 24 year successful track record and thousands of satisfied customers. Shanthala Chits is registered under the Chit Fund Act of 1982, Government of Karnataka. We are one of the most popular chit fund companies based out of Bengaluru, known for our prompt customer support and secure investments.

We also pride ourselves in our customer centric business approach. When the going is good, and you want to invest your surplus funds. Or when emergency strikes and you want to withdraw your funds urgently, we are there to support your needs quickly and smoothly.

How to pick the right scheme for my needs?

Chit schemes are always close ended schemes with a limited tenure of 2-3 years. So they are extremely suitable for goal based investment planning. A business expansion planned in the short term, international travel plans with your family, foreign university education for your kids, a vehicle purchase – whatever be the goal, keep the required amount in mind and then pick the chit scheme that offers the appropriate prize money. If you are looking for long term investment, simply stay invested and repeat the chit scheme after the completion of tenure.

Shanthala Chits has a wide variety of schemes with face value varying from Rs 1,50,000 to Rs 25,00,000. This translates to monthly instalments of Rs 6,000 to Rs 1,00,000.

OK, where do I start?

That’s easy. For investing with Shanthala Chits, just call us @ 9845787997. Or write to us at https://shanthalachits.com/contactus.php. and we’ll be glad to get in touch with you and help out with your exact needs.

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Anuradha C

Anuradha is a freelance writer cum corporate trainer in the IT/telecom domain with over 18 years experience. She served in senior technical and management positions in Huawei and TCS for 10+ years. Then gave up the traditional corporate ladder to go solo - in order to escape horrendous city traffic and to be at her own boss!