What is a Chit ?
A Chit Fund is all in one financial instrument. ... In short chit funds are saving cum borrowing schemes, where member or subscriber agrees to contribute fixed amount every month for the fixed period. The total amount contributed by subscribers shall be auctioned and given as prize money to needy subscriber every month
Why Chit Fund ?
Chit funds are often microfinance organizations. Chit Funds are also known as the Chitty, Kuree, chit. It is worth to mention that there are over 10,000 registered chit funds in India. ... Chit fund helps in collecting the small savings of the individuals which turns into a big amount.
How it works?
A chit fund is both a savings and credit product. It bears a pre-determined value and is of a fixed duration, mostly two to three years. Each scheme admits a specific number of members whose monthly contributions adds up to the total value of the chit fund at the end of the term.
Is Chit Fund a good investment?
A chit fund is a good savings instrument for small investors and brings discipline in investments. It can be a reliable source of funds in an emergency.
How do chit funds make money?
Under the chit fund agreement; a certain amount is deposited on regular basis by the different persons; and after the gap of a specified period of time the amount is returned to the subscribers with interest. Chit fund helps in collecting the small savings of the individuals which turns into a big amount.
