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Is my money safe with Chit funds?

It depends on the features of the scheme, benefit of the long-term investment and farsighted vision from the part of the investor. If you are investing your hard-owned money with a trusted chit funds company, you can easily get full repayment. Many chit funds companies with a long working history have always performed well and always repaid investors in time.

Why should I join Chit Funds?

Chit funds are a great source to grow your income reliably. Some chit funds companies offer you a discount on the installments, if you pay the installments on time. There is also a scope to repay at any of their branches or collection from your doorstep. You can even use the virtual internet facility to pay the installments. Some chit funds are also involved in social welfare activities. So, by joining them, you are actually helping improve the society besides stabilizing your financial future

How chit funds offer better saving options than other schemes such as bank, mutual funds etc?

When you join a chit fund, you are forced to save small parts of your monthly income into the schemes to maintain the integrity and continuity of the schemes for better returns and natural dividends. Borrowing from chit fund is also much easier compared to a bank. The chit loss is normally lower than the market interest rate. An investor’s return is also higher than the interest from bank on recurring deposits.

What does a prized subscriber mean?

One who has withdrew and withdrawn his chit or to whom the chit amount is paid is named as prized subscriber

What does a non-prized subscriber mean?

One who has not withdrew and withdrawn his chit or to whom the chit amount has not been paid yet is named as non-prized subscriber.

How do chit funds work?

Chit funds are somewhat like the recurring deposits in a bank. The chit funds are developed out of periodic pooled investments by a group of persons. People who subscribe to the group need to contribute an installment based on the value of the chit. The investments are already pre-calculated.

What are the Income Tax benefits from saving or borrowing?

The dividends which you earn in a chit are non taxable. If a subscriber claims the bid as loss then these dividends has to be shown as revenue income in the assessment. Hence the entire dividend earned in a chit is not taxable if you don’t claim the bid amount as loss.

What is an auction?

Auction is process for identifying the non-prized subscriber who wants to take a chit amount at the highest permissible discount. All non-prized subscribers who have paid their installments upto-date are allowed to participate in the auction for bidding the highest auction discount, within a period of five minutes, which is allowed for each auction.

Can I withdraw from a chit group after becoming a member?

When a subscriber withdraws, the chit fund company need to find a replacement in his place. Until then, the company need to arrange the funds on behalf of the person who has withdrawn. So, withdrawal is permitted, but the actual money paid by the subscriber in the chit other than the company commission will be repaid to the defaulter, at the end of the chit period.

Which securities need to be submitted?

A member usually submits securities based on the future liability of the chit. The common types of securities include –

Personal surety: Any salaried person working in State/Central Govt./ Public Limited Companies/Banks and other Reputed Companies will be taken as surety.

Pledge: Deposits with the company in chits or otherwise, net paid amount of which, after deducting foreman’s commission should not be less than 1 1/3rd of the successful bidder’s liability to the company.

Bank Guarantee: Guarantee given by the Schedule Bank in a schedule format can be submitted as surety.

Income Tax Assessor: Any person having I T Assessment for the past three years having business, profession etc. will be taken as sureties.

Property Pledge: Deposit of title deeds of urban property can be submitted as surety. Third party property can also be given as surety.

Why Should I Invest In Shree Achyuta Chits Pvt Ltd.?

Being a Government recognized Chit fund company the main motive of Shree Achyuta Chits Pvt Ltd. has always been to avail simple saving and borrowing schemes for all economy groups. Some important features of Shree Achyuta Chits Pvt Ltd. are

1. Subscriber’s protected under the Chit Fund Act 1982

2. Lower borrowing cost

3. Liquidity is easy

4. Easy payment options

5. Flexible investment plans

6. Transparent operations

Are There Any Prerequisites For Subscribing To Shree Achyuta Chits Pvt Ltd.?

Any individual can avail membership of Shree Achyuta Chits Pvt Ltd. after satisfying the KYC norms. However, it is important that you choose the right investment scheme that enables you to easily pay your monthly installments and as well as be able to produce security when you become a successful bidder.

What Are The Different Chit Fund Schemes Shree Achyuta Chits Pvt Ltd.. Offers?

Shree Achyuta Chits Pvt Ltd. offers a wide range of Chit schemes to cater to all economic groups. The Chit value starts at Rs. 1,00,000/- and goes up to Rs. 100,00,000/- with a monthly installment of Rs. 4,000/- to Rs. 4,00,000/-. All Chit values have 25 months Chit duration.

How To Join Shree Achyuta Chits Pvt Ltd.?

You can easily become a Subscriber of Shree Achyuta Chits Pvt Ltd., by visiting any of our offices or you could get in touch with our authorized Agents who will help you for the same. You will have to provide two recent passport size photos, identity proof, and latest permanent or correspondence address proof. Each subscriber will get a unique subscriber number and the Chit scheme they join also will have a different number. In times of queries or clarifications, subscribers need to give their Chit scheme number and their unique subscriber number.

How Many Chits Can One Enroll In A Chit Group?

You can enroll a maximum of 10% of the total tickets constituting the Chit group. However, Foreman has complete authority to accept or reject any applications.

What Are The Modes Of Making Payment?

You can pay at any of our branches by Cash, Cheque or Demand Draft as well as via A/C transfer. It is a must for subscribers to receive receipts for all the cash payments before leaving the cash counter. If you are making the payments online using Debit or Credit cards you will receive an e-receipt delivered to your mail.

What If The Payment Is Delayed Beyond The Date?

If subscribers delay the payment beyond the last date, interest will be levied for the delayed days as per the company policy.

How Do I Participate In The Chit Auction?

All subscribers who have successfully paid their installments are allowed to take part in the auction. If you have made the payment by cheque, the cheque must be cleared and credited to Shree Achyuta Chits Pvt Ltd. bank account before the auction date. The date and time of the auction will be informed at the start of the Chit scheme and continue to be the same until the duration ends. If there is a holiday on the auction date, the auction will be held on the next working day with no changes in timing.

If you are not able to take part in the auction, you can authorize a foreman to bid on behalf of you by giving him/her a proxy letter that clearly communicates your amount for bidding. The proxy letter details about the bidding will be kept confidential. You can also authorize a third person (not agents) to take part in the auction on behalf of you. To authorize a third person you will have to submit an authorization letter with the authorized person’s signature.

How Auctions Are Conducted?

The auctions will take place in your respective branches and start with open bidding or casting lots. You can bid for a minimum of 5% of the Chit value to a maximum of 40% of the Chit value each month. You are required to bid in multiples of Rs. 100/- starting from the opening bid amount. The subscriber who bids the highest will be declared a successful bidder and will receive the prize money i.e., the total Chit value minus the bid amount. The bid amount minus the 5% of the Chit value (Foreman’s commission) will be divided among all the subscribers in the group called as the dividend. The next month you will have to pay your installment minus the dividend.

In a case where more than one subscriber comes under the maximum bidding percentage allowed for the Chit value (40%) then the prize winner will be decided through lucky draw or lots. Any subscriber present in the group can pick a token to choose the winner.

What If I Want To Cancel My Subscription?

If you haven’t subscribed to the prize money yet, you can give a written request to cancel your subscription to the respective Foreman. After your request is received by the foreman, he/she will wait for any other subscriber who is willing to take your place in the group. Note that your paid-up amount will be returned only at the end of the Chit duration or when the prize is won by the subscriber who has replaced you after making necessary deductions as mentioned in the agreement signed with you. There will be a cancellation charge of 7-14 percent on the Chit value.

How Does Investing In A Chit Scheme Benefit Me?

  • Investing in a Chit scheme keeps you prepared for any unexpected plans or situations that may arise in your family or workplace.
  • You can participate in the auction whenever there is a need for you to claim the prize amount.
  • The returns from any Chit scheme majorly depend on the active participation of all the subscribers in bidding.
  • The most important point of all this is that the cost of borrowing is cheaper than that of banks.

What Is The Procedure To Disburse The Prize Money To The Successful Bidder?

The Prize money for the winning subscriber will be transferred within a week after 30days from the bidding date. This time is taken to receive all the security documents for future installments as per the company policies. Here are the security details you will need to submit:

  • FD Pledge
  • LIC Policies
  • Bank Guarantee
  • Postal Life Insurance
  • Immovable Property
  • NSC Pledge
  • KVP

I Heard That The Security Norms Of Shree Achyuta Chits Pvt Ltd. Are Rigid. Is It So?

It is not so. Shree Achyuta Chits Pvt Ltd., offers various security options for the subscribers. Our security options are offered, keeping in mind the best interests of all our subscribers and company norms at large!

Do You Deduct Any TDS While Disbursing Prize Money?

No. we at Shree Achyuta Chits Pvt Ltd., do not deduct TDS before disbursal. However, 5% of the Chit value will be deducted as Foreman’s commission or service tax from the prize money.

Why is there a need for sureties or guarantors?

The prized subscriber takes a loan advance from the chit fund company, with an understanding to repay the future instalment on time, so that the foreman is able to pay the prized money to other non-prized subscribers each month. In order to safe guard the interest of all non-prized subscribers each month the chit fund company insists upon the prized subscriber to provide guarantee for repayment of future instalments.