Savings
The goal of all income is to create wealth and take on the responsibilities that come with it. All the income you earn at your day-to-day job is either used for pleasure or saved up for the rainy day. Saving money can help you prepare for the future because it provides a secure way to let your income grow into a valuable asset. Understanding all about saving can help you create the right plan. We save money for purchases and emergency expenses. Saving money usually means it’s available when you need it and has a low chance of depreciating. It’s important to keep track of your savings and appreciate your goals.
Why chit funds ? How does it work ?
A chit fund is a type of savings cum borrowing scheme in which a group of people (called members or subscribers), come together and put down a fixed amount of money each month for a certain period of time. The total amount of money contributed by subscribers is then auctioned and distributed to subscribers as prize money every month until the end of that chit's tenure. Years ago, a group of farmers in the south of India began a unique scheme. Each farmer would give a fixed amount of grain each month to a trustee chosen by the farmers. Nowadays, chit funds are being used all over the world as a rotation savings and credit associations (RSCA) and the scheme has gained universal recognition as an Indian concept.
Purpose of chit funds
The purpose of chit funds is to make it easier for people, especially the weaker members of society, to borrow and save money. This is due to the fact that many people are not familiar with financial institutions and are afraid to do so. Chit funds are helping to meet the increased credit requirements of the country's population, and also teaches people to save money on a regular basis. Cash in chit funds is very liquid, so it is a great way to save money in case of an emergency. To know more about chit funds visit https://kopuramchits.com/all-about-chits/.
Advantages of Chit funds:
- No formalities needed to join
- High returns compared to saving accounts
- Free from market fluctuations
- No credit history
- No rigid formalities .